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Political, Economic, Social and Technological. This analysis is used to assess these four external factors in relation to your business situation.
Helps you determine how these factors will affect the performance and activities of your business in the long-term.
Volume (Demand): look at it with price, when your demand is wrong your cost change
% Change in quantity demanded/ % change in price
Change price a little: elastic
Change price a lot and demand doesn’t move it's inelastic and customers aren't worried about price
E > 1 elastic, E < 1 inelastic, E= 1 perfectly inelastic
Economic term used to describe the situation in which the supply and demand for a good or service are unaffected when the price of that good or service changes
Inelastic products: things you need that cannot be replaced (water, electricity)
When you decrease price elasticity you want your product demand to become more inelastic.
a cost that has already been incurred and cannot be recovered.
are those costs that vary depending on a company's production volume; they rise as production increases and fall as production decreases
A price is set in relation to the variable cost of production (ignoring Fixed Costs and overheads)
A way for firms to impact the demand for products
Examples:Airlines, Movie Theaters
is the change in the total cost that arises when the quantity produced is incremented by one unit. That is, it is the cost of producing one more unit of a good is.
that is used to describe costs that are specific to management's decisions
Based on the fact we need to cover all our cost
Mark up price:
Selling Price= total unit cost/ (1-Desired markup)
Useful for everyday pricing decisions
Used by grocery stores and other retail stores
Price Skimming: relatively high price for a product or service at first, then lowers the price over time.
Intent: capture “cream”- less price-sensitive buyers
Focus: high profit margin, sacrifice volume
Intent: sell product at a comparable low price, sell whole market at one price- no “elite” markets
Focus: High Volume, sacrifice profit margin
pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping
Setting the price of a product or service based on what the competition is charging. Competitive pricing is used more often by businesses selling similar products, since services can vary from business to business while the attributes of a product remain similar.
sometimes gives off the feel of under-valued products
setting the price of a product or service at its perceived value to the customer. This approach tends to result in very high prices and correspondingly high profits for those companies that can persuade their customers to agree to it.
A pricing method in which the selling price is established by adding a markup to total variable costs. The expectation is that the markup will contribute to meeting all or a part of fixed costs, and generate some level of profit.
the practice of pricing items at a level determined by a particular customer's perceived ability to pay, ability to change pricing on the fly
create a private label for walmart to sell, Walmart wanted a lower price point mower
has been called the biggest innovation in the writing instrument industry. The PenAgain’s “Y” formation allows your hand to relax and guide it, rather than forcefully grip it, which reduces hand fatigue, making the PenAgain ideal for those suffering from carpel tunnel syndrome, repetitive stress injuries, Arthritis, Parkinson’s, etc…
Find out your target audience (families with kids)
The reasons why they are going (entertainment)
Other revenue profits (Concessions make up a large revenue, apparel)
If they would pay more for grandstand seating
Competition (movies, college sporting events)
Competition- other entertainment activities
Other revenue profits (concessions, apparel)
Won't have to use math for the test, used surveys, asked who was willing to pay which price: ticket bundles and single tickets
What pricing strategy should Nor’easters implement?
Supply Chains is a set of three or more entities (organizations or individuals) directly involved in the upstream and downstream flow of products, services, finance, and/or information from a source to a customer
Supplier → Supplier → supplier → firm → DC → customer
← Upstream Downstream →
The action of postponing the customization of the product until the very end, Coca-Cola (machines that have 100 different flavors, so Coke can make whichever flavor you want at the last minute for you)
A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer.
Maximize Value/ Profitability
what the product is worth to the customer - the costs the supply chain incurs in filing the customer's request
Efficient Supply Chain: Walmart
Reduce inventory assuming inventory will be available when needed
Responsiveness can be defined as the ability of the supply chain to respond purposefully and within an appropriate timeframe to customer requests or changes in the marketplace
What are the different channel configurations? When and why would firms choose to sell their products through intermediaries?
Transportation costs, too small of a player, direct and indirect - Store → Customer = DIRECT
Distributor → KMart (store) → Customer = INDIRECT
A direct distribution channel is organized and managed by the firm itself.
An indirect distribution channel relies on intermediaries to perform most or all distribution functions, otherwise known as wholesale distribution.
Marketing Channels for Business goods and services
When might direct channels be preferred to indirect?
What is your take on prison labor to be hired by corporations?
is the process of making a product or service available for use or consumption by a consumer or business user, using direct means, or using indirect means with intermediaries
the activity or profession of producing advertisements for commercial products or services.
is also defined as one of five pieces in the promotional mix or promotional plan. These are personal selling, advertising, sales promotion, direct marketing, and publicity. A promotional mix specifies how much attention to pay to each of the five factors, and how much money to budget.
a particular group at which a film, book, advertising campaign, etc., is aimed.
The number of locations through which a company sells its products in a given market area
In intensive distribution, producer's products are stocked in majority of outlets.
DoubleMint gum, Coca-Cola
the producer relies on a few intermediaries to carry their product.
the producer selects only very few intermediaries.
Nature foods is more organic with limited channels while supermarkets have more channels but can also get organic products now
Sum paid by a vendor or manufacturer to a retail chain or establishment for (1) making room for a product on its store shelves, (2) making room for the product in its warehouse, (3) entering the product data in its inventory system, and (4) programming its computers to recognize the product's bar code. In the US, slotting fees often run up to $50,000 or more per product per store, on an annual basis. Also called slotting allowance.
Engage with retailers to manage the selection and display of entire product categories
had to look at 3 different choices such as a 32 oz, kid multi pack, or individual. They had to look at the different pricing what would they price these items as, who is the competition? Lots more competition and risk with multi or individual because they have a lot more brands and flavors. They has to look what which kind of flavors they would make. The individual could offer more flavors than the 32 oz.
Why did not Natureview succeed at expanding into the supermarket channel using 8-oz. product line but had to resort to a 32-oz product offering?
Offer special flavors for natural food channels
Natural Food channel sell at a higher retail price and can get a higher percent margin
Offer more promotions for natural foods
How is the digital disruption impacting the news industry (as well as other industries)? What are the difficulties that arise from unbundling of products/services?
The nature of a newspaper changes when it loses its physical form and shifts to the Internet. gets read in a different way, and it makes money in a different way. A print newspaper provides an array of content—all bundled together into a single product.
They didn’t see monster.com taking the job section or craigs list taking away from the classified section.
Thus, the company created a “leaky paywall” design rather than the “bulletproof paywall” approach adopted by other publishers, which did not permit any user who had not registered to have access to any article. Although this system had the potential to cause user confusion about what was freely available, The Times was trying to generate additional revenue while promoting the social buzz generated by its articles.
Why is NY Times struggling to generate profit from the digital channel? What are the main challenges of operating online?
Online advertising revenue is a lot lower than print advertising revenue by 8.2%
Why did NY Times set Sunday and Monday-Friday print prices below all digital access prices? What was the reasoning?
What is the key challenge associated with phasing out print?
All or nothing
Metered system: they give you a certain amount of free stuff then you have to pay
Device-specific order: charge you based on what device you access it from
They chose the last 2: they offered 20 free articles
What is Integrated Marketing Communications and why is it becoming increasingly important?
What are the components of the communication mix?
How do firms design an IMC strategy?
Targeting and Positioning Strategy
Role of IMC components
Inform: Consumers can store for later use
Persuade: Change attitudes
Remind: Keep the product in the consumer's mind
involves taking the product directly to the customer via whatever means, ensuring the customer is aware of your brand at the point of purchase.
"Taking the product to the customer"
involves motivating customers to seek out your brand in an active process.
"Getting the customer to come to you"
Examples: Soren Chemical case
What are eye tracking and heat maps used for?
What was Czech dream and what was its purpose?
Organize Financial Information
Percentage of sales method, Competitive Budgeting method, Payout method
Determine where you want to spend your marketing funds
The budget size, Past experience, Where you can reach your target
Assess data and make changes
Interactive system of marketing, which uses one or more advertising media to effect a measurable response and transaction at any location
Direct Mail, email, Telemarketing, Direct response/Internet, Catalogs, SEM/SEO Personal Selling, Infomercials, Coupons, SMS marketing, Social Media
Search Engine Marketing (SEM): Buying traffic through paid search listings (you buy a keyword, you pay for it per click)
Search Engine Optimization (SEO): Buying traffic through paid search listings (personal selling, infomercials, coupons, SMS marketing, social media)
Data on boarding
How did soccer/football positioning differ from the overall Nike brand positioning?
In your opinion, why did not Nike explicitly highlight its sustainability practices in its advertisements during the World Cup in South Africa?
There are many sponsors of the Superbowl and all of them can have commercials aired during the superbowl. To be a sponsor/ have your commercials aired during the SuperBowl is more
expensive than the World Cup. World Cup is a month, Superbowl is a day.
What was so unique about Adidas’s advertising during World Cup in 2014?
On slides, tide cold water, how they can save money, decreasing employee turnover
What is returns management and how can it generate profit for companies?
What the company does with the things they return back into the system
People think about how giving to the charity can benefit them. People just want to look good. Shows the CEO of Charities made make less than great business men with MBA but those businessmen who sit on the board or donate for a tax right off and tell the public they give to charities