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Products and services fall Into two broad classes based on the types of consumers that use them. They are called consumer products and industrial products. Consumer products are bought by final consumers, and are classified according to consumer shopping habits. Industrial products are purchased for further processing or to be used in conducting a business. There are also differences in quantity. Consumer goods are usually much smaller In quantity. The type of materials used by each class also differs. 2. The four key characteristics of services are intangibility, inseparability, variability, ND permissibility.
Service Intangibility lacks tangible assets which can be seen, touched, smelt, heard, or tasted prior to purchase. Examples of such would be education or a sporting event. Service Inseparability involves the simultaneous production and consumption which characterizes most services. Inseparable services are produced, sold, and then consumed simultaneously, therefore making them inseparable. The provider and the buyer are linked, both having to be present in order for the service to be rendered. Service Variability is determined by the circumstances surrounding the service.
The value of the service comes from the quality of the experience, who provided it, when they provided it, where they provided it, and how they provided it. Service Permissibility is also one of the four key characteristics of services. Perishable services must be rendered on the spot and cannot be stored for later sale or use. 3. Price, Quality, and Service 4. Ad expenditures are high for products in the introductory stage of the product life cycle In order to rapidly Increase customer awareness of the product and to target the early adopters. 5.
Markets can move products in the maturity or decline stages back into the growth tag by repositioning their products, and changing how customers mentally categorize them. Marketers can rejuvenate products by finding new uses for them, or by adding new features. 6. Pet Rocks and Razor Scooters. 7. Brand personality is the way a brand speaks and behaves. It means assigning traits to a brand so that it can achieve differentiation. These traits signify brand behavior through individuals representing the brands, as well as the brands advertising, packaging, etc. Brand personality Is Just personification of brand.
Brand regard. Almost every product category has high-status and low-status brands. A rand value or a brands equity is the dollar amount the brand is worth based on all of the brands intangible qualities. It is the value of having a well-known brand name. 8. Oligopolies competition and pure monopoly conditions have similarities but also have major differences. Oligopoly is a market condition in which control over the supply of commodities is held by a very few number of producers and sellers who are able to influence prices, which can have measurable impacts on competitors.
Examples of oligopoly are the automobile industry, the petroleum industry, the telecommunications markets, and the bank system. A pure monopoly is a market that only one firm has total control over due to some sort of barrier of entry for other firms such as a patent. The market is protected from use by another company, at least for now. Examples of pure monopoly are most cable and utility companies in North America. Rail roads would also be an example. 9. Market skimming pricing is a marketing strategy that deals with the pricing of a product. Normally used on new high end products, the producer will set high prices for them.
The main reason or market skimming to make as much revenue as possible before a substitute product hits the market. After a competitor arrives in the market, the price of the product will be lowered by the producer in order to compete. Usually, the company will make few sales, but will be more profitable. Market penetration pricing is a marketing strategy used by companies that want to enter their product into the market at a low price in order to attract larger amounts of buyers and market shares. Very reputable companies have used market skimming pricing such as Apple and Sony.
Companies should only use market skimming pricing when it would be hard for competitors to enter into the market and under-price them. The company’s reduce quality must also match its price. Customers also have to be willing to pay that price. Examples of companies that have used market penetration pricing would Kellogg, Cataracts, and ‘kea. Companies should only use market penetration pricing when the market is highly price sensitive so that low priced products produce more market growth. 10. Product line pricing is the process of separating products into cost categories in order to create different quality levels in the minds of consumers.
Companies usually put large price gaps between categories to inform potential customers of quality differentials. Product line pricing is used to maximize profits across the entire line. 11. The pricing mix strategy that should be used in relation to sellable scrap materials would be by-product pricing. By-product pricing functions by setting prices for by-products created during the production of a main product. Companies find ways to market by-products to help pay for the costs of getting rid of them, and it also helps make the main products price more competitive. = $24 v=$16 FCC = $400,000 = 16) = 400,000 / 8 = 50,000 units PART 2 – CASE SECTION CASE 1 1 . Herb’s market offering includes both tangible goods and services. His market offering consists of the manufacturing and distribution of custom engraved writing utensils, personalized stationary, and business cards, as well guaranteed informative customer service. 2. Herb’s core product is writing utensils. Herb built up a reputable company by expanding his vast array of writing utensil lines and offering his customers remarkable customer service. . Herb’s augmented product in this scenario include Marks customized engraving, as well as Marks top-notch customer service and personal Representative visits. Marks augmented product offering hopes to give consumers the perception of the value the add-ones bring. . The type of consumer products Marks manufactures are Specialty products. Herb built his company predominantly on the customization of writing utensils for loyal customers. Specialty shops purchased his products Just to display them in their showcases.
Herb later expanded his writing utensil lines to include even more personalized products such as stationary and business cards. Consumers buy Marks products because of their unique characteristics and brand identifications, and stay loyal because of quality products and excellent services. 5. It is critical that the products that Marks manufactures have the Marks name attached because seeing the brand name on the product reassures customers that it has the attributes they want and expect. Customers see the Marks name as more than Just a brand name, and actually attach meanings to the brand, as to what the brand actually means to them.
Without seeing the actually Marks brand name on Marks products, customers see them as no more than ordinary writing utensils and stationary supplies. Actually has a very deep product mix, making and marketing Just about every kind of writing utensil one would ever need. Pens, pencils, quills, felt tips, and even multi- cartridge pens in different colors. Most of Marks products can also be personalized. Marks product mix is very consistent, and their products perform similar functions for their customers.
Marks product mix also helps define their company’s product strategy. CASE 2 1 . Two cultural factors that may impede Selma and Asks’ global business efforts are language barriers and customs. When doing business in another country, Selma and Asks must consider the cultural differences that may be presented. If Selma and Asks had some sales people who had more knowledge of their customers cultural background, their words, actions, and body language could all be adapted to deter suit those of the customers. Language barriers could also hurt Selma and Asks.
Some countries speak loud and tend to be more aggressive or assertive when sharing ideas or giving directions, while others are more passive and soft spoken. When interacting with different cultures, Selma and Asks should speak in neutral tones and make conscious efforts to be considerate of others inputs even if it’s given in a manner which they are not accustomed to. Overcoming cultural customs and language barriers can help Selma and Asks foster effective business communication. 2. I can think of a few risks that might be associated with Selma and Asks continued use of their existing branding strategy.
Selma and Asks main risk is their brand name. The problem with the brand name Selma and Asks is that it doesn’t suggest anything about the type of products that they brand. The name Selma and Asks is not very easy to pronounce either, nor is it easy to recognize or remember. Unless changes are made, the brand name Selma and Asks may continue to cause even more problems, especially in foreign market places. 3. The elements of Selma and Asks’ branding strategy that are likely to remain denaturized are their pricing, identity, user experience, as well as designs. 4.
Selma and Asks can use brand positioning to position their brand clearly in target customers minds. If Selma and Asks could position their brand correctly they could engage customers on a deep emotional level and be seen as more than Just razors, trimmers, and hosiery in their eyes. In order to position their brand, Selma and Asks need to focus on their brands mission as well as their vision of what the brand will be and do. Selma and Asks can use brand positioning to become strong and go beyond attribute and benefits positioning. CASE 3 ND the product demand is highly price elastic.
Also, there would of had to of been substantial economies of scale available in the marketplace at that time. Demand amongst consumers would also had to of been low enough not to make price skimming work. Quills low pricing would have also helped keep competitors out of the market place. 2. Charles Powell might have avoided using market skimming pricing because his products quality and image never supported its higher pricing. Charles might have also avoided using market skimming pricing because there was not enough buyers wanting to purchase his products at those prices at the time.
Charles also never wanted to produce small volumes of his products, he wanted to manufacture and sell them in large enough quantities so that his prices could remain low. 3. In order for Quills to initiate product line pricing, their management would have categorize their current products into different product lines, and then decide on price steps to set between their various product lines based on cost differences between them, as well as customer evaluations, and competitor pricing. Quills first task would be to establish value differences for their products that also support their price differences. 4.
Quills can find additional ways to profit by using optional product pricing, setting a low price for their most basic product while offering needed add-on accessories that are costly. Quills can use optional product pricing by offering their mechanical pencils to consumers at low costs while at the same time, sell their pencil led refills that are needed to use their mechanical pencils at a much higher price. The same method could be used for Quills pens, sell the pens at low prices while offering the ink refills for much more. 5. Quills can use product bundle pricing to promote the sales of their products customers might not usually buy.
Quills can use product bundle pricing to bundle their products and offer them to customers at lower prices, but customers must find the combined price low enough for them to want to buy the bundle. Quills could bundle together some pens, pencils, as well as some stationary, drop the price low, and reap the benefits of sales promotion. 6. Quantity discounts could defiantly be possible for Quills to offer. Quills could and should offer these discounts to customers that are willing to buy large volumes of Quills products. Customers who are willing to purchase larger volumes of Quills reduces will be rewarded with reduced prices.
Quills can make quantity discounts work by targeting consumers who would be most likely to make large volume purchases, such as larger companies, learning centers, and hospitals. 7. Product form pricing may be a pricing option at Quills by charging different prices on the basis of different product forms. Just an example of product form pricing, Basic Ballpoints for $6. 99, and turn around and sell another customer the same 5 pack of pens with the exception off ASK gold plated cap that covers the pen point, call them Quills Gold Label Ballpoints, and sell them for $69. 9.
In turn, the Gold Label Ballpoint pens cost Quills a little more to manufacture then the Basic Ballpoints, but not as much as the price difference suggests. 8. If Quills decides to introduce their products internationally, factors that may cause a change in price economic conditions, competitive situations, laws and regulations, and development of the wholesaling and retailing system. Consumer perceptions and preferences may also vary around the world and may call for different prices. Price escalation may also result from differences in selling strategies or market conditions.