Questions and Answers
What is product line pricing?
What is optional product pricing?
The pricing of optional or accessory products along with a main product to attract potential buyers.
What is captive product pricing?
Pricing of products that must be used with a main product.
What is by-product pricing?
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What is product bundle pricing?
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Which of the following are examples of price adjustment strategies?
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What are the four types of discounts listed?
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Define brand equity.
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The process of developing new products includes the following stages: Idea generation, Idea screening, Concept development and testing, Product development, Business analysis, Marketing strategy development, Testing marketing, and __________.
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Which of the following is a type of new product?
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What is segmented pricing?
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Which factor is NOT considered when evaluating different market segments?
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What is the purpose of a marketing plan?
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Study Notes
Product Mix Pricing Strategy
- Product line pricing: Companies set incremental prices for different items within a product line to encourage consumer choice.
- Optional product pricing: Prices are established for additional products or accessories that enhance the main item, aiming to boost sales.
- Captive product pricing: Prices for products that are required to use a main product, often set higher to leverage dependency.
- By-product pricing: Low-value pricing for secondary products helps maintain competitive pricing on the main product.
- Product bundle pricing: Multiple products sold together at a reduced price to encourage consumers to purchase more.
Price Adjustment Strategies
- Discounts and allowances: Price reductions categorized into discounts (quantity, seasonal, functional, trade, and cash) and allowances (trade-in and promotional).
- Segmented pricing: Different prices for the same product/service based on customer segment, product version, location, or timing (seasonal/monthly/daily).
Managing New Product Development
- Types of new products:
- New to the world products: Innovative items that create new markets.
- New product lines: Products that allow entry into established markets for the first time.
- Additions to existing lines: New products that complement established offerings.
- Improvements/revisions: Enhanced versions of existing products offering better value.
- Repositioning: Existing products targeted to new market segments.
- Cost reduction: Products providing comparable performance to competitors at a lower cost.
- New product development process: Stages involve idea generation, screening, concept testing, product development, business analysis, marketing strategy development, test marketing, and commercialization.
Brand Strategy
- Brand definition: A name, term, design, or combination used to identify and differentiate products from competitors.
- Brand equity: The value derived from brand awareness, perceived quality, and customer loyalty.
- Major brand strategy decisions:
- Brand positioning: Clear positioning across attributes, benefits, beliefs, and values.
- Brand name selection: Criteria include ease of pronunciation, recognition, and memorability.
- Brand sponsorship: Options include manufacturer's brand, private brand, licensed brand, and co-branding.
- Brand development: Strategies like line extension, brand extension, new brand creation, or multi-branding approaches.
Market Positioning
- Market positioning definition: Establishing a product's location in the consumer's mind.
- Positioning map: A graph showing product, brand, or group locations in two or more dimensions.
- Positioning bases: Includes product features, price and quality, use/application, user demographics, product class, and competitor positioning.
Target Marketing
- Target marketing definition: Evaluating market segments to select those with the highest potential.
- Factors for evaluating market segments:
- Segment size and growth potential.
- Structural attractiveness of the segment.
- Alignment with company objectives and available resources.
Basic Categories of Marketing Strategy
- Undifferentiated marketing: A single offer targeting the entire market without segment differences.
- Differentiated marketing: Tailored offers for multiple segments, focusing on distinct groups.
- Concentrated marketing: Niche marketing targeting a single or few segments, often widening appeal due to limited competition.
The Marketing Plan
- Guide for implementation and control in strategy planning.
- Steps in strategy planning (DSDP):
- Define the company mission.
- Set company objectives and goals.
- Design the business portfolio.
- Plan marketing and other functional strategies.
Developing Growth Strategies
- Market penetration: Selling existing products in current markets (e.g., localizing a well-known product like nasi lemak in a college).
- Product development: Creating new products for existing markets.
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Description
This quiz explores various product pricing strategies including product line pricing, optional product pricing, and captive product pricing. It also covers price adjustment strategies such as discounts, segmented pricing, and allowances. Test your understanding of how these strategies affect consumer behavior and business pricing structures.
