The concept of the product that passes through various changes In Its total life known as: Answer: a. Product life cycle 5. It refers to unique set of brand associations that brand strategist aspires to create or maintain: Answer: c: Brand Identity 6. It involves a pricing strategy that charges customers different prices for the same product or service. Answer: b: Price discrimination 7. It refers to an arrangement where another company through its own marketing channel sells the products of one producers. Answer: d: Strategic Channel alliance 8.
It involves facility consisting of the means & equipment necessary for the event of passengers of goods. Answer: c: Transportation 9. The advertising which is used to inform consumers about a new product or feature & to build primary demands is known as: Answer: b: Informative Advertising 10. An art that predicts the likelihood of economic activity on the basis of certain assumptions: Answer: b: Sales forecasting Part two: Define Marketing Mix. The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product In the market.
Definition: The marketing mix refers to the set of actions, or tactics, that a company sees to promote its brand or product in the market. The ups make up a typical I OFF marketing mix increasingly includes several other As like Packaging, Positioning, People and even Politics as vital mix elements. Description:price: refers to the value that is put for a product. It depends on costs of production, segment targeted, ability of the market to pay, supply – demand and a host of other direct and indirect factors. There can be several types of pricing strategies, each tied in with an overall business plan.
Pricing can also be used a demarcation, to differentiate and enhance the image of a product. Product: refers to the item actually being sold. The product must deliver a minimum level of performance; otherwise even the best work on the other elements of the marketing mix won’t do any good. Place: refers to the point of sale. In every industry, catching the eye of the consumer and making it easy for her to buy it is the main aim of a good distribution or ‘place’ strategy. Retailers pay a premium for the right location. In fact, the mantra of a successful retail business is ‘location, location, location’.
Promotion: this refers to all the activities undertaken to make the product or service known to the user and trade. This can include advertising, word of mouth, press reports, incentives, commissions and awards to the trade. It can also include consumer schemes, direct marketing, contests and prizes 2. The Concept of Benchmarking The firm examines its costs and performance in each value creating activity and finds out ways of improving it. The firm should estimate the leading competitor’s cost and performances and install them as benchmarks against which to compare its own cost and performances.
It should also study the ‘best of class’ practices of the world’s best companies, in order to learn from them and improve their own performance. The rim’s success depends not only on how well each department performs its work but how well it manages the core business processes. The core business processes include: 1. The market sensing process: activities related to market intelligence 2. The new offering realization process: activities related to developing and launching new high-quality offerings 3.
Customer acquisition process: activities related to segmenting, targeting and prospecting of new customers 4. The customer relationship management process: activities related to building deeper understandings and close relationships with individual customers 5. The fulfillment management process: activities related to ordering, shipping and payment collection. To be successful, firms need to look beyond their own operations and create a superior value-delivery network (also called a supply chain) by partnering with specific suppliers and distributors. 3.
Short note on target marketing Target Marketing involves breaking a market into segments and then concentrating business’s success. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost- effective. It provides a focus to all of your marketing activities. So if, for instance, I open a catering business offering catering services in the client’s home, instead of advertising with a newspaper insert that goes out to everyone, I could target my market with a direct mail campaign that went only to particular residents.
While market segmentation can be done in many ways, depending on how you want to slice up the pie, three of the most common types are: Geographic – based on location such as home addresses; Demographic – based on measurable statistics, such as age or income; Cryptographic – based on lifestyle preferences, such as being urban dwellers or pet lovers. . Pricing strategy: Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization.
The remaining up’s are the variable cost for the organization. It costs to produce and design a product, it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization. Pricing Factors Pricing should take into account the following factors into account: 1. Fixed and variable costs. 2. Competition 3. Company objectives 4. Proposed positioning strategies. 5.
Target group and willingness to pay An organization can adopt a number of pricing strategies, the pricing strategy will usually be based on corporate objectives. Section 2 Ceaseless Answer 1 The Product Life Cycle A product’s life cycle (PL) can be divided into several stages characterized by the revenue generated by the product. If a curve is drawn showing product revenue over time, it may take one of many different shapes, an example of which is shown below: Product Life Cycle Curve ay be as short as a few months for a fad item or a century or more for product categories such as the gasoline-powered automobile.
Product development is the incubation stage of the product life cycle. There are no sales and the firm prepares to introduce the product. As the product progresses through its life cycle, changes in the marketing mix usually are required in order to adjust to the evolving challenges and opportunities. Introduction Stage When the product is introduced, sales will be low until customers become aware of the product and its benefits. Some firms may announce their product before it is introduced, but such announcements also alert competitors and remove the element of surprise.
Advertising costs typically are high during this stage in order to rapidly increase customer awareness of the product and to target the early adopters. During the introductory stage the firm is likely to incur additional costs associated with the initial distribution of the product. These higher costs coupled with a low sales volume usually make the introduction stage a period of negative profits Product Life Cycle During the introduction stage, the primary goal is to establish a market and build remarry demand for the product class.
The following are some of the marketing mix implications of the introduction stage: Product – one or few products, relatively undifferentiated Price – Generally high, assuming a skim pricing strategy for a high profit margin as the early adopters buy the product and the firm seeks to recoup development costs quickly. In some cases a penetration pricing strategy is used and introductory prices are set low to gain market share rapidly. Distribution – Distribution is selective and scattered as the firm commences implementation of the distribution plan.
Promotion – Promotion is aimed at building brand awareness. Samples or trial incentives may be directed toward early adopters. The introductory promotion also is intended to convince potential resellers to carry the product. Growth Stage The growth stage is a period of rapid revenue growth. Sales increase as more customers become aware of the product and its benefits and additional market segments are targeted. Once the product has been proven a success and customers carrying it. The marketing team may expand the distribution at this point.
When competitors enter the market, often during the later part of the growth stage, there ay be price competition and/or increased promotional costs in order to convince consumers that the firm’s product is better than that of the competition. During the growth stage, the goal is to gain consumer preference and increase sales. The marketing mix may be modified as follows: Product – New product features and packaging options; improvement of product quality. Price – Maintained at a high level if demand is high, or reduced to capture additional customers.
Distribution – Distribution becomes more intensive. Trade discounts are minimal if resellers show a strong interest in the product. Promotion – Increased advertising to build brand preference. Maturity Stage The maturity stage is the most profitable. While sales continue to increase into this stage, they do so at a slower pace. Because brand awareness is strong, advertising expenditures will be reduced. Competition may result in decreased market share and/or prices. The competing products may be very similar at this point, increasing the difficulty of differentiating the product.
The firm places effort into encouraging competitors’ customers to switch, increasing usage per customer, and converting non-users into customers. Sales promotions may be offered to encourage retailers to give the product more shelf space over competing products. During the maturity stage, the primary goal is to maintain market share and extend the product life cycle. Marketing mix decisions may include: Product – Modifications are made and features are added in order to differentiate the product from competing products that may have been introduced. Price – Possible price reductions in response to competition while avoiding a price war.
Distribution – New distribution channels and incentives to resellers in order to avoid losing shelf space. Promotion – Emphasis on differentiation and building of brand loyalty. Incentives to get competitors’ customers to switch. Decline Stage Eventually sales begin to decline as the market becomes saturated, the product becomes technologically obsolete, or customer tastes change. If the product has developed brand loyalty, the profitability may be maintained longer. Unit costs may increase with the declining production volumes and eventually no more profit can be made.
During the decline phase, the firm generally has three options: Maintain the product in hopes that competitors will exit. Reduce costs and find new uses for the reduce. Harvest it, reducing marketing support and coasting along until no more profit can be made. Discontinue the product when no more profit can be made or there is a successor The marketing mix may be modified as follows: surviving products to make them look new again. Price – Prices may be lowered to liquidate inventory of discontinued products. Prices may be maintained for continued products serving a niche market.
Distribution – Distribution becomes more selective. Channels that no longer are profitable are phased out. Promotion – Expenditures are lower and aimed at reinforcing the brand image for continued products. Limitations of the Product Life Cycle Concept The term “life cycle” implies a well-defined life cycle as observed in living organisms, but products do not have such a predictable life and the specific life cycle curves followed by different products vary substantially. Consequently, the life cycle concept is not well-suited for the forecasting of product sales.
Furthermore, critics have argued that the product life cycle may become self-fulfilling. For example, if sales peak and then decline, managers may conclude that the product is in the decline phase and therefore cut the advertising budget, thus precipitating a further decline. Nonetheless, the product life cycle concept helps marketing managers to plan alternate marketing strategies to address the challenges that their products are likely to face. It also is useful for monitoring sales results over time and comparing them to those of products having a similar life cycle.
Answer 2 When a product or service is produced, it needs to get to the buyers and/or consumers. This process of procuring, packaging, shipping, and presenting a product to potential buyers is called marketing. Marketing is important to a company for the following reasons: 1 . It links the producer to potential buyers. In essence, it serves as a pipeline or channel through which the product flows until it’s in the hands of the intended consumers. 2. It allows a company to advertise a product’s components, usefulness, availability, and price. 3.
It allows a company to tailor a product for suitability to a specific region, locale, or populace. 4. It helps a company cut their costs and maximize profits. 5. A company can reach a broader market through the use of distributors, wholesalers, brokers, agents, and retailers. The marketing department of a company is one of its most important assets, and wise marketing decisions often make or break company. ::: The Role of Marketing Channels Channel Functions and Flows marketing channel performs the work of moving goods from producers to consumers.
Some functions constitute a forward flow of activity from the company to the customer;other functions constitute a backward flow from customer to the company. Manufacturer selling a physical product and services might require three channels: a challenges, and a service channel. Channel levels a zero level channel consist of a manufacturer selling directly to the final customer. MaJor examples are door to door sale, mail order. A one-level channel intermediaries. These intermediates could be retailers, distributors. As the no. F levels increase the level of difficulty of information sharing indoctrination also increase. Channels normally describe a forward movement of productions source to user. Service Sector Channels marketing channels are not limited to the distribution of physical goods. Producer of service and ideas also face problem of making their output available and accessible target population. Role of Marketing Channels A distribution channel moves goods from producers to consumers. It overcomes the ajar time, place, and possession gaps that separate goods and services from those who would use them from those who make them.
Marketing channel members perform many roles: buying, carrying inventory, selling, transporting, financing, promoting, negotiating, conducting marketing research and servicing. These functions are summarized in the following table and a smooth conduct of these functions will enable products to flow from producers to consumers in a timely and efficient manner. Roles Description Buying Purchasing -a broad assortment of goods from the producer or other channel members. Carrying Inventory Assuming the risks associated with purchasing and holding an inventory.
Selling Performing activities required for selling goods to consumers or other channel members. Transporting Arranging for the shipment of goods to the desired destination. Financing Providing funds required to cover the cost of channel activities. Promoting Contributing to national and local advertising and engaging in personal selling efforts. Negotiating Attempting to determine the final price of goods and the terms of payment and delivery. Marketing Research (Information) Providing information regarding the needs of customers. Servicing Providing a variety of services, such as credit, delivery and returns.
Types of marketing channels: Marketing channels are the ways that goods and services are made available for use by the consumers. All goods go through channels of distribution, and your marketing will depend on the way your goods are distributed. The route that the product takes on its way from production to the consumer is important because a marketer must decide which route or channel is best for his particular product. Manufacturer to Customer Manufacturer makes the goods and sells them to the consumer directly with no intermediary, such as a wholesaler, agent or retailer.
Goods come from the manufacturer to the user without an intermediary. For example, a farmer may sell directly to customers. Manufacturer to Retailer to Consumer Purchases are made by the retailer from the manufacturer and then the retailer sells the merchandise to the consumer. This channel is used by manufacturers that specialize in producing shopping goods. For example, clothes, shoes, furniture and fine china. This merchandise may not be needed immediately and the consumer may take her time and try on the items before making a buying decision.
Manufacturers that specialize in producing shopping goods prefer this method of distribution. Manufacturer to Wholesaler to Customer Consumer’s can buy directly from the wholesaler. The wholesaler breaks down bulk packages for resale to the consumer. The wholesaler reduces some of the cost to the consumer such as service cost or sales force cost, which makes the purchase price cheaper for the consumer. For example, shopping at some of the warehouse clubs, the customer may have to buy a membership in order to buy directly from the wholesaler. Manufacturer to Agent to Wholesaler to Retailer to Customer