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DEFINE A PRODUCT AND 1. According to use: Consumer and DIFFERENTIATES THE PRODUCT, Industrial Goods SERVICE AND EXPERIENCE Consumer goods are goods that are...

DEFINE A PRODUCT AND 1. According to use: Consumer and DIFFERENTIATES THE PRODUCT, Industrial Goods SERVICE AND EXPERIENCE Consumer goods are goods that are purchased for personal consumption and/or What is a Product? household use. Product is anything that can be offered in a market for attention, acquisition, Industrial goods are purchased in order to use, or consumption that might satisfy a make other goods, to serve as a raw need or want. material or input in the production of other goods. Includes: Physical object, Services, Events, Person, Places, Organization, Ideas 2. According to Differentiation: Undifferentiated and Differentiated 1. Core Benefit The core benefit is the fundamental Undifferentiated goods are products need or want that the customer satisfies whose physical characteristics are so when they buy the product. identical, that it would be difficult, if not impossible, to distinguish one purchased 2. Generic Product from one vendor or another. Most The generic product is a basic undifferentiated goods are products that are version of the product made up of only sourced from nature. those features necessary for it to function. Differentiated goods are varied in their 3. Expected Product characteristics and features that make them The expected product is the set of distinguishable from one another. features that the customers expect when they buy the product. 3. According to durability: Consumable, Semi-Durable, and Durable Goods 4. Augmented Product The augmented product refers to Durability refers to the length of time a any product variations, extra features, or consumer can derive benefit from the services that help differentiate the product product or good purchased. from its competitors. Consumable is a product whose benefit 5. Potential Product can only be used by a consumer for a short The potential product includes all period of time, sometimes only a few augmentations and transformations the minutes. Consumables a such as food, product might undergo in the future. In drinks simple language, this means that to continue to surprise and delight customers Semi-durables provide benefits to the the product must be augmented. In a hotel, consumer for a longer period of time, this could mean a different gift placed in the usually spanning several months. room each time a customer stays. Semi-durables are manufactured for Packaging. Designing and producing the long-term use by consumer. container or wrapper for a product. Labeling, Printed information appearing on Durables are products that are or with the package. manufactured to last a long time. They are capable of providing consumers with years Nature and characteristics of service of beneficial use. Durables are usually Intangibility Services cannot be seen, expensive, and many, therefore, require an tasted, felt, heard, or smelled before augmented product to market them purchase effectively. Variability Quality of services depends on who provides them and when, where, and 4. According to Type: Convenience, how Shopping, Specialty, and Unsought Inseparability Services cannot be Goods separated from their providers Convenience goods are products that are Perishability Services cannot be stored for purchased frequently, usually inexpensive. later sale or use and do not require much purchase effort Services Marketing and evaluation. Examples are newspapers, gum, and candy. External marketing: Traditional marketing via the 4 "P's" Shopping goods are purchased less Internal marketing: Effective training and frequently than convenience goods, are motivation of customer contact employees relatively more expensive, and require some Interactive marketing: Delivering amount of information search and interactions during the service encounter evaluation prior to purchase. Consumers of that are satisfying to the buyer shopping goods consider features, evaluate What is Experience? attributes, and compare prices. A product which involves experiential aspects of consumption rather than Specialty goods are goods that require an utilitarian ones. This type of product allows unusually large effort on the part of consumers to engage in fantasies, feelings and fun and often carries subjective consumers to acquire. Consumers are meanings and characteristics (Hirschman usually willing to travel great distances to and Holbrook, 1982). where these goods can be purchased. Examples are branded luxury merchandise, Product experience is the overall value of a product or service to customers. This is works of art, automobiles, and homes. defined in terms of customer perceptions as they use the product or service in a variety Unsought goods are goods that of contexts. Product experience is a component of customer experience, a consumers seldom actively look for, and are broader concept that includes all usually purchased for extraordinary interactions between your firm and the reasons, such as fear or adversity, rather customer. Product experience is mainly than desire. achieved through design and quality control. Customer experience is the impression your customers have of your brand as a SETTING THE PRICE whole throughout all aspects of the buyer's journey. It results in their view of your brand 1. Identify the target market segment for and impacts factors related to your the product or service, and decide what bottom-line including revenue. share of it is desired and how quickly. Importance of Customer Experience 2. Establish the price range that would be acceptable to occupants of this segment. If A remarkable customer experience is this looks unpromising, it is still possible that critical to the sustained growth of any consumers might be educated to accept business. A positive customer experience higher price levels, though this may take promotes loyalty, helps you retain time. customers, and encourages brand advocacy. 3. Examine the prices (and costs if possible) of potential or actual competitors. Today, customers have the power, not the sellers. 4. Examine the range of possible prices within different combinations of the Who gave them this power? Us - with help marketing mix (e.g. different levels of from the worldwide web. product quality or distribution methods). Customers have a plethora of options to 5. Determine whether the product can be choose from at their fingertips plus the sold profitably at each price based upon resources necessary to educate themselves anticipated sales levels (i.e. by calculating and make purchases on their own. break-even point) and if so, whether these profits will meet strategic objectives for This is why it's so important to provide a profitability. remarkable experience and make them want to continue doing business with you - 6. If only a modest profit is expected it may customers are your best resource for be below the threshold figure demanded by growing your brand awareness. an organization for all its activities. In these circumstances, it may be necessary to IDENTIFY AND DESCRIBE THE modify product specifications downwards FACTORS TO CONSIDER WHEN until costs are reduced sufficiently to produce the desired profit. SETTING PRICES AND NEW PRODUCT PRICING AND ITS STEPS IN SETTING PRICE POLICY GENERAL PRICING APPROACHES 1 Selecting the Pricing Objective A company can pursue any of five major Price is the value measured in money term objectives through pricing: survival, in the part of the transaction between two maximum current profit, maximum market parties where the buyer has to give share, maximum market skimming, or something up (the price) to gain something product- quality leadership. offered by the other party or the seller. 2 Determining the Demand Price - definition Price is the monetary In the normal case, demand and price are value of a good, service or resource inversely related: the higher the price, the established during a transaction. Price can lower the demand. be set by a seller or producer when they possess monopoly power, and are said to be price makers, or set through the market itself, when firms are price takers. Price can 3 Estimating Cost also be set by the buyer when they posses A company charge a price that covers its some monopsony power. cost of producing, distribution and selling the product including a fair return for its effort and risk. Cost Based Pricing Simply, a company may determine the exact 4 Analyzing competitor's Costs, prices cost of producing and selling an objective, and offers add a markup that may be desirable for While demand sets a ceiling and costs set a profits and price accordingly. floor to pricing, competitors' prices provide an in between point you must consider in Cost Plus Pricing setting prices. A percentage is added to the costs as a profit margin to determine final price. 5 Selecting a pricing method Determine best approach for the product DISCUSS THE STRUCTURE IF 6 Selecting the final price DISTRIBUTION CHANNELS. Adopt the chosen pricing strategy FUNCTIONS AND NATURE OF THE PRICING STRATEGY SUPPLY CHAIN MANAGEMENT Pricing strategy refers to method In the marketing mix, the process of moving companies use to price their products or products from the producer to the intended services. user is called place (a.k.a. distribution channel). In other words, it is how your Penetration Pricing product is bought and where it is bought. A low price is set by the company to build This movement could be through a up sales and market share. combination of intermediaries such as distributors or wholesalers and retailers. Skimming Pricing. Here, the initial price is set high and may Through the use of the right place, a slowly be brought down. company can increase sales and maintain these over a longer period of time. In turn, Competition Pricing this would mean a greater share of the When trying to go head to head with market and increased revenues and profits. competitors offering similar benefits, Correct placement is a vital activity that is Product Line Pricing focused on reaching the right target Here, different products in the same range audience at the right time. It focuses on may be set at different prices. where the business is located, where the target market is placed, how best to connect Bundle Pricing these two, how to store goods in the interim A group of products may be bundled and how to eventually transport them. together and sold at a reduced price. What is a distribution channel? Psychological Pricing A distribution channel can be defined as the Often a company will make small changes activities and processes required to move a to prices to make a customer think the item product from the producer to the consumer. is priced lower than it is. Also included in the channel are the Premium Pricing intermediaries that are involved in this A high price is set to establish an exclusive movement in any capacity. product of high quality. Indirect Producer Wholesaler Retailer Consumer Indirect distribution In this channel, a company will use an Optional Pricing intermediary to sell a product to the A company may add optional extra items consumer. The company may sell to a within the price to increase a product’s wholesaler who further distributes to retail attractiveness. outlets These intermediaries are third party companies that act as wholesalers, transporters, retailers and provide Functions of a channel warehouse facilities. The primary purpose of any channel of Types of Distribution Channel distribution is to bridge the gap between the producer of a product and the user of it, Direct. In this channel, the manufacturer whether the parties are located in the same directly provides the product to the community or in different countries consumer. thousands of miles apart. The channel of distribution is defined as the most efficient Indirect. In this channel, a company will use and effective manner in which to place a an intermediary to sell a product to the product into the hands of the customer. The consumer. The company may sell to a channel is composed of different institutions wholesaler who further distributes to retail that facilitate the transaction and the outlets physical exchange. Dual Distribution In this type of channel, a Institutions in channels fall into three company may use a combination of direct categories: and indirect selling. The product may be sold directly to a consumer, while in other The producer of the product: a craftsman, cases it may be sold through intermediaries. manufacturer, farmer, or other extractive industry producer Reverse Channels The last, most non tradition channel allows for the consumer to The user of the product: an individual, send a product to the producer household, business buyer, institution, or government Distribution channel intermediaries are middlemen who play a crucial role in the Certain middlemen at the wholesale and/or distribution process. These middlemen retail level facilitate the distribution process through A channel performs three important their experience and expertise. There are functions. Not all channel members perform four main types of intermediaries: the same function. The functions are: 1. Agents The agent is an independent Transactional functions: buying, selling, entity who acts as an extension of the and risk assumption producer by representing them to the user. Logistical functions: assembly, storage, 2. Wholesalers Wholesalers are also sorting, and transportation independent entities. But they actually purchase goods from a producer in bulk and Facilitating functions: post-purchase store them in warehouses. service and maintenance, financing, information dissemination, and channel 3. Distributors Similar to wholesalers, coordination or leadership distributors differ in one regard. A wholesaler may carry a variety of competition brands and product types. A distributor however, will only carry products from a single brand or company. A Supply Chain Management distributor may have a close relationship with the producer. The supply chain is a system of organizations, people, activities, 4. Retailers Wholesalers and distributors information, and resources involved in will sell the products that they have acquired moving a product or service from supplier to to the retailer at a profit. Retailers will then customer. Supply chain activities involve the stock the goods and sell them to the transformation of natural resources, raw ultimate end user at a profit. materials, and components into a finished product that is delivered to the end customer. Brand recall. Recall reflects awareness of Supply chain management takes a a brand when it comes in mind as soon as different approach. The Council of Supply its product class is mentioned. A manner of Chain Management Professionals (CSCMP) unaided recall. defines supply chain management as follows Top of mind. The highest awareness level, the brand dominates the mind and pops up Supply Chain Management encompasses as first when ever applicable. the planning and management of all activities involved in sourcing and PROMOTION procurement, conversion, and all logistics - using promotional techniques such as management activities. Importantly, it also advertising, personal selling, public relations includes coordination and collaboration with and publicity. channel partners, which can be suppliers, - The primary purpose of promotion is to intermediaries, third-party service providers, convey brand awareness to consumers and customers. TYPES OF MEDIA AND TECHNIQUES Define and identify relevant USED IN ADVERTISING promotional tools, namely, 1. Advertising advertising, sales promotion, is the practice and techniques employed to personal selling, and direct bring attention to a product or service. marketing to create awareness and persuade the target market to TRADITIONAL MEDIA AND TECHNIQUES buy the product or patronize the service. 1. RADIO A viable advertising vehicle in the COMMUNICATION Philippines since 1922, radio is the most It refers to the imparting or exchanging of accessible media. Philippine radio stations information or news. broadcast in either the AM or FM bands. PROMOTION 2. PRINT (NEWSPAPER AND MAGAZINE) refers to any type of marketing communication used to inform target 3. TELEVISION audiences of the relative merits of a Television networks and stations broadcast product, service, brand or issue, most of the through both free and cable channels. time persuasive in nature. Similar to radio, some television stations select programming content to be ADVERTISING exclusively public affairs, entertainment, Advertising is the practice and techniques children’s programs, or educational TV. employed to bring attention to a product or service. BRAND AWARENESS ALTERNATIVE MEDIA TECHNIQUES It refers to the extent to which consumers are familiar with the distinctive qualities or 1. CINEMA image of a particular brand pf goods or The first motion picture in the Philippines services. appeared in 1904. Since then, a large number of cinema houses and movie LEVEL OF BRAND AWARENESS theaters have sprouted in major Brand recognition. Recognition reflects metropolitan cities. familiarity and linking acquired from past exposure. Remembering as such, one 2. BILLBOARD brand among others is a manner of aided Relatively low cost but high exposure to recall. heavy traffic. 3. WEBSITES Almost all legitimate companies have developed websites that customers can access for product information and services. 4. SOCIAL NETWORKING SITES 5. DIRECTORY ADVERTISING More commonly known as “YELLOW PAGES”, this medium has been declining rapidly. This is bought about by an increasing number of households discontinuing landline subscriptions. 6. PRODUCT PLACEMENT Product placement is an advertising technique used by companies to promote products subtly through a non-traditional advertising. 7. E-MAIL ADVERTISING 8. TRANSIT ADVERTISING An advertising signage on the side or back of a bus, a jeepney, taxi can create good brand recall for the market. 9. ONLINE ADS Internet advertising. This permits target marketing through the use of cookies generated by a web page server. 10. DIRECT RESPONSE ADVERTISING Telemarketing is the direct marketing of goods or services to potential customers over the telephone or the internet. Four common kinds of telemarketing include outbound calls, inbound calls, lead generation, and sales calls. 11. POINT-OF-SALE, SIGNS, POSTERS AND LEAFLETS These are relatively inexpensive ways to advertise and promote a product. Difference between traditional and alternative (digital) media advertising