Chapter 15: Managing the Marketing Mix: Product, Price, Place, and Promotion

Total Product Offer (Value Package)
Everything that customers evaluate when deciding whether to buy something
Value
Good quality at a fair price
Product Line
Group of products that are physically similar or are intended for a similar market
Product Mix
Combination of product lines offered by an organization
Product Differentiation
Creation of real or perceived product differences
Packaging Functions
The evaluation of packaging as a marketing function indicates that:
B. packaging carries more of the promotional burden of the product.
Trademark
1) Anheuser-Busch Companies, Inc. has been given the exclusive right to the name Budweiser and is legally protected from others using this name by the __________ they hold.
2) Pillsbury Doughboy
Branding
Name, symbol, or design that identifies the goods or services of one seller or group of sellers, and distinguishes them from the goods and services of competitors
Brand Equity
Value of the brand name and associated symbols
Brand Loyalty
Degree to which customers are satisfied, enjoy the brand, and are committed to further purchase
Brand/Product Manager
Has direct responsibility for one brand or one product line
Product Life Cycle
Example: Which of the following is a characteristic of the decline stage of the product life cycle?
A. falling sales
Theoretical model of what happens to sales and profits for a product class over time, consists of four stages:
1) Introduction
2) Growth
3) Maturity
4) Decline
Cost-based Pricing
Jian has entered into a contract with the federal government to design a computer simulation for training helicopter pilots. The contract calls for the final price to be set at a fixed percentage profit over and above her cost of production.
Target Costing
• Designing a product so that it satisfies customers and meets the profit margins desired by the firm
• Determining what the market is willing to pay, then subtracting a desired profit margin to determine a desired cost of production
Competition-based Pricing
Price can be set at, above, or below competitors’ prices
Price Leadership
One or more dominant firms set the pricing practices that all competitors in an industry then follow
Break-even Point
What does a break-even point of 100 units mean?
D. If the firm sells 100 units, its total revenues will equal its total costs.
Fixed Costs
All expenses that remain the same no matter how many products are made or sold
Variable Costs
Costs that change according to the level of production
Examples: labour, materials
Skimming Price Strategy
New product is priced high to make optimum profit while there is little competition
Penetration Price Strategy
Product is priced low to attract many customers and discourage competitors
Example: Barker Brothers Pens utilizes a strategy of low prices to attract customers and discourage competition.
Everyday Low Pricing (EDLP)
Setting prices lower than competitors and then not having any special sales
High-low Pricing Strategy
Set higher prices than EDLP stores; have many special sales where the prices are lower than competitors
Psychological Pricing
Pricing goods and services at price points that make the product appear less expensive than it is
Non-Price Competition
Marketers often compete on product attributes other than price
Marketing Intermediaries
Assist in moving goods and services from producers to business and consumer users
The types of utility commonly provided by marketing intermediaries include:
B. time, place, possession, information, and service.
Channel of Distribution
Set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers that join together to transport and store goods in their path (or channel) from producers to consumers
Example: Patrick Bolger is convinced that his product idea has tremendous potential. He will be involved with production, but plans to use other firms who specialize in storing and transporting the product to help him move the product along its path to the final consumer.
Agents/Brokers
Marketing intermediaries that bring buyers and sellers together and assist in negotiating an exchange but do not take title to the goods
Wholesaler
Marketing intermediary that sells to other organizations
Retailer
An organization that sells to ultimate consumers
Intensive Distribution
Distribution that puts products into as many retail outlets as possible
Example: Candy bars
Selective Distribution
Distribution that sends products to only a preferred group of retailers in an area
Exclusive Distribution
Distribution that sends products to only one retail outlet in a given geographic area
Electronic Retailing
Selling goods and services to ultimate customers over the Internet
Social Commerce
Form of electronic commerce that involves using social media and user contributions to assist in the online buying and selling of products and services
Telemarketing
Sale of goods and services by telephone
Direct Selling
Selling to customers in their homes or where they work
Promotion
Effort by marketers to inform and remind people in the target market about products and to persuade them to participate in an exchange
Promotion Mix
Combination of promotional tools an organization uses
Integrated Marketing Communication (IMC)
Combines all of the promotional tools into one comprehensive and unified promotional strategy
Advertising
Paid, non-personal communication through various media by organizations and individuals who are in some way identified in the advertising message
Global Advertising
Involves developing a product and promotional strategy implemented worldwide
Personal Selling
Face-to-face presentation and promotion of goods and services
B2C Sales Process
Approach – Ask questions – Make presentation – Close sale – Follow up
Public Relations (PR)
• Evaluates public attitudes
• Changes policies and procedures in response to the public’s requests
• Executes a program of action and information to earn public understanding and acceptance
Example: Lenora just finished writing a news release regarding a new product developed by her firm. She intends to email the message to local radio stations and newspapers in hopes that they will find the information newsworthy and run a story about the product.
Publicity
Any information about an individual, product, or organization that is distributed to the public through the media and that is not paid for or controlled by the seller
Sales Promotion
Stimulates consumer purchasing and dealer interest by means of short-term activities
Example: At a recent sporting event, a local beer distributor gave free beverage mugs to all adults with a paid admission
Direct Marketing
Any activity that directly links manufacturers or intermediaries with the ultimate customer
Word-of-mouth Promotion
Involves people telling other people about products they have purchased
Example: Professor A shared with his students the wonderful experience he had at a local Asian restaurant. He described the location in relation to campus and encouraged his students to give it a try.
Viral Marketing
Encourages people to pass on a marketing message to others, creating exponential growth in the message’s influence as the message reaches thousands to millions of potential customers
Podcasting
Means of distributing multimedia digital files on the Internet for downloading to a portable media player
Push Strategy
Producer uses advertising, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise
Pull Strategy
Heavy advertising and sales promotion efforts are directed toward consumers so that they will request the products from retailers
Which of the following tasks would be included in the marketing mix?
A. evaluating various distribution alternatives to determine the best way to get the product to the consumer