Principles of Marketing - Placement Lecture Notes PDF

Principals of Marketing Lecture: Placement Slide 10-1  Four approaches for selecting approximate prices Demand-oriented Approaches  Demand-oriented Approaches Cost-oriented Approaches...

Principals of Marketing Lecture: Placement Slide 10-1  Four approaches for selecting approximate prices Demand-oriented Approaches  Demand-oriented Approaches Cost-oriented Approaches  Cost-oriented Approaches Profit-oriented Approaches  Profit-oriented Approaches Competition-oriented Approaches  Competition-oriented Approaches Slide 10-2  SELECT AN APPROPRIATE PRICE LEVEL DEMAND-ORIENTED PRICING APPROACHES Skimming Pricing Penetration Pricing  Skimming  Penetration Pricing Pricing Prestige Pricing  Prestige Pricing Slide 10-3  SELECT AN APPROPRIATE PRICE LEVEL DEMAND-ORIENTED PRICING APPROACHES Bundle Pricing Odd-Even Pricing  Odd-Even  Bundle Pricing Pricing Yield Mgmt Pricing  Yield Mgmt Pricing Slide 10-4  SELECT AN APPROPRIATE PRICE LEVEL COST-ORIENTED PRICING APPROACHES Cost Plus Pricing  Cost Plus Pricing  Cost-plus percentage-of-cost pricing. Slide 10-5 Markups for a manufacturer, wholesaler, and retailer on a home appliance sold to consumers for $100 Slide 10-6  SELECT AN APPROPRIATE PRICE LEVEL PROFIT-ORIENTED PRICING APPROACHES Target Profit Pricing  Target Profit Pricing Profit = Total Revenue – Total Cost Profit = (P × Q) – [FC + (UVC × Q)] $7,000 = (P × 1,000) – [$26,000 + ($22 × 1,000)] $7,000 = 1,000P – $48,000 1,000P = $55,000 P = $55 Slide 10-7  SELECT AN APPROPRIATE PRICE LEVEL PROFIT-ORIENTED PRICING APPROACHES Target Return- on-Sales Pricing  Target Return- on-Sales Pricing 20%=(TR-TC)/TR Slide 10-8  SELECT AN APPROPRIATE PRICE LEVEL COMPETITION-ORIENTED PRICING APPROACHES Customary Pricing  Customary Pricing Above-, At-, or Below-Market Pricing  Above-, At-, or Below-Market Pricing Loss-Leader Pricing  Loss-Leader Pricing Slide 10-9  SET THE LIST OR QUOTED PRICE ABOUT TIME Fixed-Price Policy  Fixed-Price Policy Dynamic Pricing Policy  Dynamic Pricing Policy Clickstream Slide 10-10  MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE DISCOUNTS Quantity Discounts  Quantity Discounts Slide 10-11  MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE ALLOWANCES  Trade-In Allowances Slide 10-12  MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE LEGAL & REGULATORY ASPECTS OF PRICING Price Fixing  Price Fixing Price Discrimination  Price Discrimination Slide 10-13  MAKE SPECIAL ADJUSTMENTS TO THE LIST OR QUOTED PRICE LEGAL & REGULATORY ASPECTS OF PRICING Predatory Pricing  Predatory Pricing  Deceptive Pricing Slide 10-14 Five most common deceptive pricing practices Slide 10-15 WHERE ARE WE NOW? Slide 10-16  Distribution Channel Distribution Channels Organized network that links manufacturers or service providers to customers. Wholesaler Persons or firms that buy large quantity of goods, warehouse them, and resell to retailers. Retailer A firm or person that sells goods to consumers. Agent: An intermediary who negotiates transactions between two or more parties. Slide 10-17  Channel Configurations Manufacturer Service Provider Agent Agent Agent Wholesaler Wholesaler Retailer Agent Retailer Retailer Retailer Agent Consumer Consumer Consumer Services Products Slide 10-18 Two Forms of Channel Strategies Direct Indirect Involvement Involvement Retail stores Independent Agents (i.e. Disney, Gap) Wholesalers Own Sales Force Retailer Slide 10-19 Channel Objectives: Create Utility for Customers Place utility: Time utility: Product/service availability Product/service availability in locations convenient to when desired by customers customers Information utility: Form utility: Availability for information Processed/prepared in about product features and proper condition and/or benefits ready to use Slide 10-20 Value Added in Distribution Channels Distribution channels typically account for 15% – 40% of the retail price of goods: Slide 10-21 Factors Influence Distribution Channels Customer Product Characteristics Characteristics Middleman Environmental Characteristics Characteristics Slide 10-22  CLASSIFYING RETAILERS Form of Ownership Form of Ownership Level of Service Level of Service Merchandise Line Merchandise Line Slide 10-23  CLASSIFYING RETAIL OUTLETS FORM OF OWNERSHIP Independent Retailer Corporate Chain Franchises Slide 10-24  CLASSIFYING RETAIL OUTLETS LEVEL OF SERVICE Self Service Limited Service Full Service Slide 10-25 Stores vary in terms of the breadth and depth of their merchandise lines Slide 10-26  CLASSIFYING RETAIL OUTLETS TYPE OF MERCHANDISE LINE Depth of Product Line Depth of Product Line Limited-line stores Single-line stores Slide 10-27  CLASSIFYING RETAIL OUTLETS TYPE OF MERCHANDISE LINE Breadth of Product Line Breadth of Product Line General Merchandise Stores Scrambled Merchandising Scrambled Merchandising Slide 10-28  RETAILING STRATEGY POSITIONING A RETAIL STORE Retail Positioning Matrix Retail Positioning Matrix Breadth of Product Line Variety categories (clothes , food , appliance) Value Added includes service quality , experiences , brand image 2 restaurant Slide 10-29 The four positioning strategies for retailers Slide 10-30  RETAILING STRATEGY RETAILING MIX Retailing Mix Retailing Mix Retail Pricing Original Markup Maintained Markup Markdown Slide 10-31  RETAILING STRATEGY RETAILING MIX Everyday Low Pricing (EDLP) Everyday Fair Pricing Slide 10-32  RETAILING STRATEGY RETAILING MIX Off-Price Retailing Off-Price Retailing Warehouse Club Outlet Store Single/Extreme Value Store Slide 10-33  Why Apple Stores May Be the Best in the United States! Sales per Square Foot ($) and Same Store Sales Growth (%) Total Sales ($) Sales per Square Foot ($) = Selling Area in Square Feet   Store Sales Year 2 ($) - Store Sales Year 1 ($)   Same Store Growth (%) =    100  Store Sales Year 1 ($)  Slide 10-34 Many retailing activities do not involve a store Slide 10-35  NONSTORE RETAILING Automatic Vending Slide 10-36  NONSTORE RETAILING Television Home Shopping Slide 10-37  NONSTORE RETAILING Online and Mobile Retailing Slide 10-38  NONSTORE RETAILING Telemarketing Telemarketing Do-Not-Call Registry Direct Selling Slide 10-39  Next Class Article Presentation Slide 10-40