Business Administration Tuesday November 10, 2009 Business Administration Tuesday November 10, 2009 Product development & Value package Value/total product offer: everything consumers evaluate when deciding to buy (effects the next 3) Product line: all of the goods or services offered by a company intended for a similar market [i.e.- soaps for men and women, etc.] Product Mix: All of the products lines offered by a company [i.e. Proctor gamble= pampers, crest, charmin, iams, tide, folgers, duracell] Product differentiation: the creation of real or perceived product differences [i.e.- aquafina v. Dasani v. Evian v. Deer Park--all water] **test question** be able to distinguish between line, mix and differentiation Importance of packaging Protection: tamper-proofing product, cleanliness, Attraction: grab attention of consumer Description: explain the contents of what is inside Explain benefits Information on warranties, warnings, etc. Indication of price, value, and uses Branding Brand v. Trademark Brand: Name, symbol, or design, or combination of, that identifies the service of a seller from those of other sellers. Trademark: Brand that has exclusive legal protection of products. Categories: Manufacturers? (microsoft, intel, etc.) Dealer/private (kraftsman, Kenmoore, etc) Generic (Aspirin under a branded name) Knockoff (sounds similar to a recognizable brand) Equity: companies spend millions promoting their brand and will protect their trademarks. Loyalty: willing to spend money to ensure customer loyalty Awareness: Association: of quality based on a brand name Characteristics of a good brand name: short, sweet, and easily pronounced, but flexible. Product life cycle: introduction>growth>maturity>Decline Blue line=sales Red line=profits* Purpose: for planning purposes Sales v. Time *Sales & Profits During the PLC--good review slide!! [important for test] 5 different objectives Return on the product? Looking to build traffic? Trying to improve market share? Trying to create image? -priced solely on image. To further a social objective (new)? --a green company, focusing on the environment, so make it cheaper so people can help the environment. Strategies Cost-plus: know how much it costs to make your product, so you have a set profit Value-based: give you a good value, to make them look at other products. Competitive: look at the market, and the market will determine your prices EDLP: wal-mart-low price leader Loss-Leader: grocerie stores use milk, lower the prices of milk but put it at the back of the store so then they buy other goods. *Purposely price it lower than its worth, to get traffic in the store to sell other products* Psychological: price it to make it look/appear cheaper than it really is. (walmart- .99> .94> .88 Break even Chart Break even point: point where your total revenue exceeds your total cost Product promotion: all the techniques sellers use to motivate people to buy their products or services Consumer decision making Marketing mix Psychological Sociocultural Situational Marketing Different Classes of Goods & Services Consumer -convenience -shopping -specialty (start looking at options in advance, do research ex: car) -unsought (impulse buy ex: snack foods) Consumer Markets Niche: small but very profitable market, usually higher end goods. One-to-one: developing a unique mix of goods or services for one person from an agent (ex: travel agent) Business to Business (B2B) Number: much less than selling to consumers Size: Much larger than selling to consumers Geographic Concentration: location Rational: not emotional sales, based on profit and benefit Direct Sales: one sale rep to the other Personal Selling: we?re selling you paper, can we sell you a printer and ink too?
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