Unit 3 Test Review PDF

Unit 3 Test Review WHAT IS A POSITION? Positioning involves creating an image of a product in the consumer’s mind. A Position is... Stance Perception An Attitude Point of view - Marketers make choices about how to position their product or service in order to crea...

Unit 3 Test Review WHAT IS A POSITION? Positioning involves creating an image of a product in the consumer’s mind. A Position is... Stance Perception An Attitude Point of view - Marketers make choices about how to position their product or service in order to create an image of the brand that they want the consumer to accept - Achieved by Top-of-the-Mind Awareness ↳ The brand will appeal to some and not others e.g: Tesla has become a top-of-mind brand for luxury, electric vehicles TYPES OF POSITIONING 1. Benefit Positioning: Customers want to buy a product that will provide them with some sort of benefit 2. Target Positioning: To gain an effective target market position, all of a brand’s marketing must focus on a specific consumer segment 3. Price Positioning: Marketer offers the most expensive or the least expensive product in a category 4. Distribution Positioning: Marketers use unique sales techniques and become known for their method of distribution 5. Service Positioning: Provides unique services which must be maintained or the brand’s position will change  WHAT IS A BRAND? - A brand consists of the features that make up a product’s image ↳ A name ↳ Visual associations like a Logo ↳ Slogan - These features convey the products personality or position - Gives the product a distinct identity - Consumers associate with the brand Commodities: Unbranded products - Cocoa and coffee - Grains, such as wheat and corn - Animals that become food, such as cattle and pork - Cotton - Metal products Commodity Market: involves buying, selling, or trading raw products like oil, gold, or coffee TYPES OF BRAND NAMES Corporate dominant include the name of the manufacturer (also called National Brand) - Roots, Coke - The advantage is that the product is associated with the company’s positive reputation Product dominant connect a product with its positive attributes - Play-Doh A Private Brand label is a brand that a retailer creates to exploit their corporate image Only that retailer can sell it - Loblaw’s “President’s Choice” , Shoppers Drug Mart’s “Life” brand Generic Brands are also called no name brands. They are the lowest cost because the labeling and packaging is cheaper, and there is no promotion for this type of brand LOGOS - A logo is the accepted generic term for all of the symbolic ways to create a brand 1. Monogrammatic: stylistic writing of the company’s initials HBO - Home Box Office 2. Visual Symbols: The visual is usually drawings of people, animals or objects. Roots 3. Abstract Symbol: A vague product association Nike SLOGANS - A short catchy phrase that is associated with the companies brand - A good slogan is 7 words or less Characteristics: - The brand name - What the company or product does - Is memorable and positive BRANDING STRATEGIES FIVE (5) TYPES OF BRAND STRATEGIES - Support - Develop - License - Co-branding - Acquire 1. Support For an Existing Brand : Slight changes to existing products. 2. Development of a Brand Extension: A company will use one of its established brands to create a similar product that capitalizes on the older brand’s success. 3. Licensing a Successful Brand: Companies license their brand identification to other companies for a fee (usually a % of sales) 4. Co-Branding: Co-branding involves two or more brands combining for their mutual benefit 5. Acquisition of a Successful Brand: Purchasing an existing (well known business)  PRICING Gross Profit/Contribution Margin: Gross Profit is the money left over after raw materials and packaging have been paid for Break Even Point: # of units that need to be sold to break even Economies of Scale: The more products a company makes, the lower the cost of production Pricing Strategies 1. Market Skimming: setting an initially high price before competitors enter the market. e.g. innovative electronics, new drug, medical therapies 2. Penetration Pricing: setting an initially low price to attract customers e.g. new restaurants, new retail outlets that want to rapidly acquire a major market share 3. Competitive Pricing: matching prices with competitors e.g. major retailers including supermarkets 4. Benchmark Pricing: standard price – follow the leader pricing e.g. fast food, automotive repair shops, dentistry  Pricing Policies Leader/Loss Leader Pricing: Offering a popular product at a low price to attract customers to the stores in hopes that they will also buy other products Price Lining: Line of products at different specific pricing points (Apple iPhones) Everyday Low Prices: Stores use sale pricing to position themselves as low-priced stores. They guarantee the customer that the price they pay in the store is the lowest price available. Purchase Discounts (Quantity Discounts): Price reductions in goods and services offered by the seller to the buyer to increase the volume of an order Super Sizing (Value Pricing): Paying a slightly higher price for a larger portion of an item. Premium or Prestige Prices: Use a high price where there is a uniqueness about the product or service. This approach is used where a substantial competitive advantage exists. Interest-Free Pricing: Offering consumers the opportunity to finance their purchase with low or no interest charges for the extent of the contract. Negotiated Pricing: A buyer makes offers to purchase and a seller makes offer to sell a particular product or service for less than the published price Combo Pricing (bundling): Sellers combine several products in the same package. Psychological Pricing: Using typical consumer behaviour to set prices. Odd Pricing, Even Pricing, Promotional Pricing DISTRIBUTION Types of Channels: Goods and services need to be distributed to either: 1 - in a place where consumers can find them 2 - delivered directly to the consumers Two major components of distribution: DISTRIBUTION: Selecting, developing and managing distribution channels LOGISTICS: Physically distributing the products through channels of distribution Channels of Distribution refers to the paths of ownership that goods follow as they pass from producer to the final consumer 1. Intensive Distribution: The company wants product sold everywhere - Gum, Chips 2. Selective Distribution: Attempts to control where the product is sold, pricing, etc. - Nike, Gap 3. Exclusive Distribution: Deals are made with 1+ retailers so that they are the only ones who can sell a product. 4. Integrated Distribution: Company owns manufacturing, distribution and retail businesses - IKEA, Lee Valley Tools 1.Direct Channels - The producer has a direct relationship with the buyer, as in a small business e.g. farmer roadside stands, crafts fairs, restaurants, contractors 2.Indirect Channels - The product passes through the use of wholesalers and distributors (Intermediaries) before it goes to consumer - Intermediaries buy, markup, & resell goods 3 Major Types of Intermediaries 1 - Importers : Bring goods from other countries & sell to companies at a markup 2 – Wholesalers : Buy large quantities of different products from producers, Resell smaller quantities to retailers, businesses and industries, (costco) 3 – Retailers : Provide many wholesale functions but with a consumer focus. Sell the product to the actual customer, Having the right merchandise, at the right place, at the right time, at the right place, and in the right quantities 3. Specialty Channels: any indirect channels of distribution that does not involve a retail store: Vending machines, E-Commerce, Social Media, Catalogues, Telemarketing, TV sales Factors to Determine Transportation Method: Destination – the further it travels, the more it costs Weight – heavy/bulky packages cost more Volume – large shipments cost less per unit Type of Goods – some goods cost more to ship Transportation: Trucks – door to door, fast, may need to fill a truckload Trains – large quantities, bulky shipments, slower, need to transfer to a truck usually Planes – very fast, very expensive Ships – similar to trains, cheap, containerization so more efficient; for international shipments Pipelines – natural gas or crude oil goods only Inventory Management controls the goods once they are within the business - 4 main areas: - Overstocks - Out-of-stocks - Shrinkage - Turnover Just-in-Time (JIT) strategy – avoid having too much inventory on hand