Podcast
Questions and Answers
What is the primary purpose of dynamic pricing?
What is the primary purpose of dynamic pricing?
Which pricing strategy is primarily used to account for customers' willingness to pay across different segments?
Which pricing strategy is primarily used to account for customers' willingness to pay across different segments?
When should businesses consider using discounts instead of added value?
When should businesses consider using discounts instead of added value?
What is a potential risk of overusing discount pricing strategies?
What is a potential risk of overusing discount pricing strategies?
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What is a key characteristic of psychological pricing?
What is a key characteristic of psychological pricing?
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Which of the following is NOT a common sales promotion technique?
Which of the following is NOT a common sales promotion technique?
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What is a benefit of providing added value instead of discounts?
What is a benefit of providing added value instead of discounts?
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Which scenario would most likely benefit from implementing a promotional pricing strategy?
Which scenario would most likely benefit from implementing a promotional pricing strategy?
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What does cost-based pricing primarily take into account when setting prices?
What does cost-based pricing primarily take into account when setting prices?
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Which of the following best describes break-even pricing?
Which of the following best describes break-even pricing?
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Which pricing method adds a standard markup to the cost of the product?
Which pricing method adds a standard markup to the cost of the product?
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What is the disadvantage of cost-plus pricing?
What is the disadvantage of cost-plus pricing?
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If a toaster manufacturer has a variable cost of $10 and a fixed cost of $300,000 with expected unit sales of 50,000, what is the manufacturer's cost per toaster?
If a toaster manufacturer has a variable cost of $10 and a fixed cost of $300,000 with expected unit sales of 50,000, what is the manufacturer's cost per toaster?
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How does break-even volume relate to price, variable cost, and fixed cost?
How does break-even volume relate to price, variable cost, and fixed cost?
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Which statement is true regarding 'good value pricing'?
Which statement is true regarding 'good value pricing'?
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What is the primary goal of using competition-based pricing strategies?
What is the primary goal of using competition-based pricing strategies?
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What is the objective value of a product?
What is the objective value of a product?
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What is a key characteristic of value-based pricing?
What is a key characteristic of value-based pricing?
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What happens when a product's price is lower than its perceived value?
What happens when a product's price is lower than its perceived value?
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Which strategy involves setting a low initial price to gain market share?
Which strategy involves setting a low initial price to gain market share?
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What is a critical factor in competition-based pricing?
What is a critical factor in competition-based pricing?
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What distinguishes good-value pricing?
What distinguishes good-value pricing?
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What does price skimming usually require from the product?
What does price skimming usually require from the product?
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What role does economic condition play in pricing strategy?
What role does economic condition play in pricing strategy?
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What can a company do if competitors are dominant with low prices?
What can a company do if competitors are dominant with low prices?
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Which of the following best describes value-added pricing?
Which of the following best describes value-added pricing?
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Study Notes
Course Review Topics
- Introduction
- Marketing strategy
- Segmentation, targeting, and positioning
- Marketing research (2 lectures)
- Branding
- Products and Services
- New Product Development
- Study of concepts, large frameworks
- Early electric vehicle (EV) ads focused on education the public about the benefits of EVs - what type of advertising objective were the firms using?
- A) Reminder advertising
- B) Informative advertising
- C) Persuasive advertising
- D) Comparative advertising
- Promotion
- Advertising
- Public Relations
- Pricing (2 lectures)
- Digital marketing
- Channels
- Sustainable marketing
Consumer Rights
- Consumerism - organized movement to improve buyer rights and power.
- Traditional consumer rights:
- Right not to buy a product offered for sale
- Right to expect the product to be safe
- Right to expect the product to perform as described
- Additional consumer rights:
- Right to be well informed about product
- Protection from questionable products and services
- Right to influence products/services for quality of life
- Right to consume now while preserving world for future generations
Sampling Methods
- Probability sampling: uses random selection for fairness to improve generalizability
- Non-probability sampling: allows researchers to handpick participants based on their judgment
- Convenience sampling: quicker and easier
Pillars for a Sustainable Future (Triple Bottom Line)
- Fostering long-term economic growth without compromising social/environmental factors
- Protecting and conserving natural resources
- Ensuring community well-being
Consumer Actions to Reduce Climate Impact
- Buying more sustainable products or products with reduced climate impact
- Making more considered purchases to reduce overall consumption
- Eating different foods or traveling less
- Supporting candidates and policies with environmental concerns
- Using renewable electricity
- Purchasing electric vehicles
- Reducing online purchases to reduce carbon-related transport
Consumer Willingness to Pay More for Sustainable Products
- Consumers willing to pay more for locally-sourced, sustainable, or eco-friendly products
- Local farmers' markets
- Recycled/sustainable materials
- Eco-friendly disposal methods
- Ethically-produced products
- Willingness to pay more for lower supply-chain/carbon footprints or products from transparent, fair-trade sources
Sustainability Efforts in Business
- Industry experts evaluating sustainability effectiveness at communicating to stakeholders
- Evaluations are not highly effective
- Defining company mission in broad social terms instead of narrow product terms
- Make marketing decisions that have interest in consumers, the business, and society as a whole
- Create and deliver products with both immediate customer satisfaction and long-term benefits
Challenges Faced by Businesses Embracing Sustainability
- Sustainable products are often more expensive
- Consumers may not deem sustainable products desirable
- Skepticism about the quality of sustainability products
- Lack of ready market for sustainable solutions that solve consumer problems
- Many consumers are skeptical about sustainability claims made by businesses
- Benefits of a sustainable product may be intangible, or felt only in the long term • Highlight immediate product appeals • Create an emotional connection or emotional reward • Make the global, societal benefit personal(e.g. safe for pets).
Unilever's Sustainable Marketing
- Challenges:
- Bombarding consumers with advertising
- Promoting overconsumption
- Cultural pollution
- Solution strategies:
- Promoting mindful consumption.
- Focus on quality over quantity.
- Effective value propositions to customers.
- Better targeting.
Delivering Value Through Distribution
- Value delivery network: A network (composed of company, suppliers, distributors, and customers) to improve the system for delivering value
- Benefits of Channels
- Conflicts and strategies
Channels
- Types of channels
- Direct: Producers → Consumers
- Indirect: Producers → Wholesalers → Retailers → Consumers
- Channel length = number of intermediary levels
- Role of intermediaries: transform product assortments by producers into assortments made available to customers
Information Needs
- Trying before buying
- Advice and demonstrations
- Price and product comparison
- Customization
- Convenience
- Variety/assortment
- Immediacy of availability
Conflicts and Strategies
- Vertical conflict: Conflict between different levels in distribution channels
- Producer and distributor incentives at odds
- Horizontal conflict: Conflict between two players at the same level in a distribution channel
- Two retailers' incentives at odds
Marketing Strategies for Services
- Interactive marketing: Service quality depends on buyer-seller interaction during service encounters
- Service differentiation: Creates competitive advantage, e.g. offer, delivery, image, service quality, customer retention measured by service quality, work place culture, and employee morale
Internal Marketing
- Service firm motivates customer-contact and support service people to work as a team to provide customer satisfaction, e.g. centering the customer, hiring right people, and team effort
- Service recovery paradox: Customer satisfaction with the company improves after a service failure, e.g., a service failure is resolved effectively
- Exceeds expectations. Unlikely repeated failures.
- Example: Southwest Airlines
New Product Failure
- Insignificant “point of difference”: Example: Clairol’s Look of Buttermilk, Touch of Yogurt - Does consumer care? Is product different? What is look of buttermilk?
- Incomplete market/product definition. Example: Google Glasses - What consumer problems solve?
- Insufficient market attractiveness. Example: Air freshener
- Poor timing: Example: Nescafé Hot When You Want coffee cans - did it fit to the market? Did it have proper season?
- Flawed research: Example: Tropicana orange juice - did the research accurately capture the market?
- The trade-offs innovations demand, e.g. the gains and losses when introducing a new product
Product Life Cycle
- Product development: Find and develop a new idea
- Introduction: Product enters the market
- Profit is negligible due to high costs.
- Growth: Fast rate of market acceptance. Profits rise.
- Aggressive promotion strategy needed.
- Maturity: Profits level off due to increased competition.
- Decline: Sales fall
New Technology Adoption Timeline
- Innovators
- Early adopters
- Early majority
- Late majority
- Laggards
Segmentation and Targeting
- Geographic, Demographic, Psychographic, Behavioral
- Describe and differentiate segments of customers who are likely to respond in a relatively similar way to marketing efforts
- Benefits-based segmentation- Understand consumer preferences regarding the importance of product benefits, e.g. What do consumers want in a skin cream?
- Targeting: Strategy of evaluating segments and choosing to enter one or more; e.g., size, expected to grow, long-term potential
Brand Management
- Brand acquisition: Effective brand expansion; e.g., brand messaging across entire marketing mix
- Brand Architecture
- Branded House, House of Brands, Endorsed Brand, Sub-Brands
- Brand Extensions: Extending brand to different categories
- New product lines, e.g., different product categories of existing products, new versions, etc..
- Line extensions: Introducing a new product with the same brand name or branding for a similar customer group.
- Keep meaning relevant to avoid confusion amongst customers and to capture more of the market.
Marketing Research Stages
- Step 1: Define the problem
- Step 2: Develop research plan for data collection and analysis
- Step 3: Collect and analyze data (primary and secondary)
- Step 4: Interpret findings and make recommendations
Types of Marketing Research
- Exploratory: Identify hunches or insight; pilot study
- Descriptive: Describe composition and characteristics of relevant populations; e.g., surveys
- Casual: Identifying cause and effect between variables; e.g., experiment
Data Collection Approaches
- Qualitative:
- Focus groups: In-depth discussions, e.g., exploring perceptions/feelings
- In-depth interviews: One-on-one interactions
- Projective techniques: Metaphorical terms, e.g., sentence completion, role playing
- Observation: e.g., ethnographic research, mystery shoppers
- Quantitative:
- Surveys/cross-sectional studies, experiments
Marketing Information System
- Assess market information needs
- What information do we need?
- Develop market information:
- Internal databases, market intelligence, marketing research
- Analyze and use information
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