6 Questions
What are the components of a product?
Core function and innovative design
What is sales promotion?
A way to persuade customers to buy within a short period of time
What is value-based pricing?
Pricing based on customers intrinsic value evaluation and perception
What are the three common pricing strategies mentioned in the text?
Cost-based pricing, value-based pricing, and competitor-based pricing
What is sales promotion and how is it commonly used?
Sales promotion is used to persuade customers to buy within a short period of time, and examples include contests and price discounts.
What is the importance of communication in today's business environment according to the text?
It is crucial for marketers to communicate with suppliers, distributors, and competitors, as well as provide avenues for customers to communicate with each other.
Study Notes
Product Components
- A product consists of three components: core, actual, and augmented product
- Core product: the benefit or solution the product provides to the customer
- Actual product: the tangible aspects of the product (features, design, quality, branding)
- Augmented product: additional services or benefits that add value to the product (warranty, customer support, after-sales service)
Pricing Strategies
- Three common pricing strategies: penetration, skimming, and competitive pricing
- Penetration pricing: setting a low initial price to attract customers and gain market share
- Skimming: setting a high initial price to maximize profit margins
- Competitive pricing: setting a price in response to competitors' prices
Sales Promotion
- Sales promotion: short-term incentives to encourage sales, such as discounts, free gifts, or special offers
- Commonly used to: stimulate sales, introduce new products, clear inventory, or attract new customers
Value-Based Pricing
- Value-based pricing: setting a price based on the product's perceived value to the customer
- Price is determined by the product's unique benefits, quality, and performance
Communication in Business
- Effective communication is crucial in today's business environment to build trust, resolve conflicts, and foster long-term relationships with customers and stakeholders
Test your knowledge on pricing strategies! This quiz will cover the various ways in which marketers plan prices for their products, including cost-based pricing, value-based pricing, and more. Learn about the different components of a product and how they can affect pricing decisions. Perfect for anyone interested in marketing or business strategy.
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