Podcast
Questions and Answers
What is considered the starting point of all marketing activities?
What is considered the starting point of all marketing activities?
Innovations in the product area are a hindrance to corporate growth.
Innovations in the product area are a hindrance to corporate growth.
False
What factors should be considered when making decisions regarding a product?
What factors should be considered when making decisions regarding a product?
Design, features, brand name, quality, services, experience
The price captures the monetary value created with the ______.
The price captures the monetary value created with the ______.
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Match the following pricing considerations with their descriptions:
Match the following pricing considerations with their descriptions:
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Under which circumstance does price become a more powerful quality indicator?
Under which circumstance does price become a more powerful quality indicator?
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Price is an effective quality indicator for true innovations that lie outside the buyer's familiar frames of reference.
Price is an effective quality indicator for true innovations that lie outside the buyer's familiar frames of reference.
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What are experience goods or credence goods?
What are experience goods or credence goods?
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Price becomes more powerful when __________ in whoever offers the price information increases.
Price becomes more powerful when __________ in whoever offers the price information increases.
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Match the circumstances that increase the power of price as a quality indicator:
Match the circumstances that increase the power of price as a quality indicator:
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What are the two main objectives of promotion?
What are the two main objectives of promotion?
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The place of a product solely determines the profit margin.
The place of a product solely determines the profit margin.
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Name one channel of distribution.
Name one channel of distribution.
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The ____ mix includes print advertising, personal selling, and public relations.
The ____ mix includes print advertising, personal selling, and public relations.
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Match the elements with the respective mix they belong to:
Match the elements with the respective mix they belong to:
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Which of the following is NOT an element of the promotion mix?
Which of the following is NOT an element of the promotion mix?
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The elements of the 4P’s in marketing are independent of each other.
The elements of the 4P’s in marketing are independent of each other.
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What does the 'P' in '4P's' stand for?
What does the 'P' in '4P's' stand for?
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What is a key advantage of price changes in marketing?
What is a key advantage of price changes in marketing?
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Competitors cannot respond quickly to price changes in the market.
Competitors cannot respond quickly to price changes in the market.
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What is one reason pricing can lead to higher profit increases?
What is one reason pricing can lead to higher profit increases?
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Price is the only marketing instrument that does not require __________ expenditures or investments.
Price is the only marketing instrument that does not require __________ expenditures or investments.
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Match the following statements about pricing to their implications:
Match the following statements about pricing to their implications:
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How much stronger is the influence of price as a marketing instrument on sales compared to others?
How much stronger is the influence of price as a marketing instrument on sales compared to others?
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Price measures lead to profit increases sooner than other marketing measures.
Price measures lead to profit increases sooner than other marketing measures.
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What can significantly shift in a matter of minutes due to price changes?
What can significantly shift in a matter of minutes due to price changes?
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What category of pricing represents the highest status and exclusivity?
What category of pricing represents the highest status and exclusivity?
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Functional attributes do not relate to a product's ability to satisfy customer needs.
Functional attributes do not relate to a product's ability to satisfy customer needs.
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What are the four categories that segment value and performance attributes?
What are the four categories that segment value and performance attributes?
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A product's ability to stimulate ___ can significantly affect its price.
A product's ability to stimulate ___ can significantly affect its price.
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Match the following positioning categories with their appropriate description:
Match the following positioning categories with their appropriate description:
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Which of the following is NOT one of the functional attributes of a laptop?
Which of the following is NOT one of the functional attributes of a laptop?
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Emotional attributes can include feelings such as excitement and beauty.
Emotional attributes can include feelings such as excitement and beauty.
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What buying motive is associated with emotional attributes?
What buying motive is associated with emotional attributes?
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What does 'narrow sphere of competition' refer to?
What does 'narrow sphere of competition' refer to?
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The outer sphere of competition includes businesses that provide different types of services meeting the same customer needs.
The outer sphere of competition includes businesses that provide different types of services meeting the same customer needs.
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What is the first step in price management related to competition?
What is the first step in price management related to competition?
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The broader sphere of competition includes companies that provide ______ types of products.
The broader sphere of competition includes companies that provide ______ types of products.
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Which of the following is a component of price management?
Which of the following is a component of price management?
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What should companies analyze to understand their competition?
What should companies analyze to understand their competition?
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Match each sphere of competition with its description:
Match each sphere of competition with its description:
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Anticipating competitors' future price behavior is not part of price management.
Anticipating competitors' future price behavior is not part of price management.
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Study Notes
Pricing: Kickoff
- Course offered at Mönchengladbach campus, Winter 2024/25
- Lecturer: Martin Kasperski, M.Sc., Ph.D. Candidate
- Contact information provided (email, phone, address)
Course Organization
- Course timeline: October 2nd, 2024 to December 17th, 2024
- October 23rd, 2024: Campus week (no class)
- January 7th, 2025: Mock exam (no class)
- Exam (date to be announced)
- Grading structure: 50% course Pricing, 50% Applied Math
- Grading includes written exam and optional presentations
Structure of Course
- Discussion of textbook material in class.
- Relevant chapters of the textbook are important for the exam and quizzes.
- Optional presentations on assigned topics to earn additional bonus points.
- Presentation deadlines and dates are scheduled until November 25th,2024
- Maximum 3 bonus points for presentations
Grading of the course
- Maximum points achievable in the course: 60
- Written exam: 60 points possible.
- Participation, quizzes, and presentations: 12 points possible.
- Bonus points only contribute to the Pricing part of the course, if combined exam and bonus points exceed 60, the maximum would still be 60
Grading Scheme for Bonus Points (Kahoot Quizzes)
- 1 point per quiz per class
- 0 points for quizzes with less than 50% correct answers.
- 0.5 point for quizzes with 50-75% correct answers.
- 1 point for quizzes with more than 75% correct answers.
- Bonus points awarded for winning quizzes
Grading Scheme for Participation
- 0 points for no participant
- 0.5 points for occasional participation
- 1 point for active participation
Course Textbook
- Textbook title: Price Management
- Authors: Hermann Simon and Martin Fassnacht
- Publisher: Springer
- Course material is available online via "Semesterapparat".
Course Material
- Direct link provided to access the course material online
- Access via the university's library website, including a list of semester apparat.
- Course material (presentations) are available on Moodle.
- Zoom link provided for online classes.
Course Agenda (Detailed Schedule)
- Week by week schedule of topics.
Learning Objectives
- Introduction to the interdependent 4Ps
- Understanding how the 4Ps integrate into a comprehensive marketing strategy.
- Understanding how decisions in one marketing area (e.g. pricing) affect other areas.
Think-Pair-Share
- Activity in class related to the role of price of a product.
Marketing Fundamentals (The 4Ps)
- Review of marketing mix fundamentals (the 4Ps)
Imagine: Marketer at Apple
- Hypothetical scenario to consider the iPhone marketing strategy
Strategic Context (The 4Ps)
- Importance of the 4Ps in developing a marketing strategy.
The 4Ps of Marketing
- Relationship between the 4Ps in strategic planning and implementation.
- The 4Ps capture and promote the USP of a product.
The product
- Product is the central part of the marketing mix.
- Product decisions are important for marketing strategy (design, brand, quality, experience, etc.)
The Price
- Price captures monetary value
- Goal: to increase maximum willingness to pay through pricing decisions.
- Pricing decisions have an immediate impact on margins.
- Relevant pricing options include allowances, discounts, rebates, conditions.
- Prices vary for different segments based on customer profiles.
Promotion
- The role of promotion is to inform customers and induce purchase.
- Key promotion objective: differentiation in today's complex information environment.
- Common promotion methods: online marketing, print, personal selling, publicity, and direct marketing
Place
- Place refers to the distribution channels and availability to consumers
- Bring the offers to customers
- Manage product ownership transfer
- Profit margins depend on how quickly products are sold.
Channels of Distribution
- Warehousing decision
- Product handling
- Transport
- Inventory control
- Order processing
- Coverage
Key Takeaways (4Ps)
- The 4Ps are interdependent and guide decision-making
- High pricing often necessitates high quality standards, specific customer segments, and carefully selected distribution channels
- Course material available: Price Management book chapters
Pricing: Session 2
- Course agenda detailed
- Key learnings summarize the critical concepts of defining pricing and its role in driving profit, exploring volume-price-cost relationship, importance of pricing power and its implications on a company's valuation, and understanding how to use pricing options to create more value for diverse customer segments
Pricing: Session 3
- Course agenda
- Key learnings include understanding how strategic price changes affect consumers psychologically, including price thresholds, compromise effects, and the Veblen effect, and explaining price management processes which involve strategy, analysis, decision, and implementation.
Restaurant Case Study
- Consulting for an Italian restaurant near a university having financial difficulties,
- Analysis of the situation from the four Ps (Product, Place, Price, Promotion) perspective by brainstorming among students.
Fundamentals of Pricing
Definition of pricing = number of monetary units a buyer provides for one product unit Pricing power is pivotal in evaluating the value of a business (Warren Buffet). Formula for profit: (Price x Volume) - Costs Price. volume, and costs interdependent and directly affect profits Break-even chart illustrates the contextual relationship between revenue, costs, and output Analyzing one-time and reoccurring costs (e.g., lease, utilities, marketing and advertising) necessary for opening and maintaining a restaurant.
The effect of price increases
- Scenarios for calculating price increases' effects on profit margins based on percentage changes.
Price has the strongest and immediate effect on profit
- Shows how a 5% price increase produces sizable gains for profits.
The impact of a 2% price increase
- Shows the large profit gains possible for fortune 500 companies by slightly increasing their prices.
Task: Research and Explain
- Detailed instructions for research of pricing options that includes example, benefits, and limits
Key Takeaways (Pricing Concepts)
- Price =(Price x Volume) – Costs and influences profit immediately
- Understanding break-even point helps determine minimum sales needed to cover costs and guide pricing decisions
Key Takeaways (Session 3)
- Pricing impacts consumer perceptions of quality.
- Psychological effects like price thresholds, compromise effect, and snob effect should be considered when setting prices.
Pricing: Session 4
- Course agenda is provided in detail
- Key takeaways and course learning
Key Takeaways (Sessions 5, 6, 7, 8, 9)
General summary of topics covered in each session. Key takeaways and course learning
The various Pricing Strategies
- Penetration pricing strategy
- Skimming pricing strategy
Pricing Process, Stages, and Key Decisions
- Five-stage process of pricing, from analysis to implementation and monitoring.
Pricing Strategy Over the Product Life Cycle
- Introduction, growth, maturity, and decline stages for product lifespan and pricing strategy adjustments
- Understanding the concepts of price elasticity, cross-elasticity; point and arc elasticity and its application in different contexts.
Sources
- List of cited resources, in particular books, used for the course. (e.g., Esch et al, Kotler, Simon & Fassnacht, and Homburg).
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Description
Test your understanding of marketing principles and concepts with this quiz. It covers key elements such as product decisions, pricing strategies, and promotional techniques. Challenge yourself with questions that explore the importance of price as a quality indicator and distribution channels.
