Marketing Essay
Terms
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- Purpose of Product Manager
- full responsibilty for managing the marketing mix of products
- Goal of Market Segmentation
- Small groups of people in a target market with homogenious needs
- Why is demographic segmentation so popular?
- Demographics are widely available, and advertising relies heavily on it.
- Selection criteria for which markets are targeted:
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Markets should have:
Profit Potential
Suffiecient Resources
A Competitive Advantage - Product Positioning
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How the desired Target Market views your product
-Needs/Benefit segmentation important when considering positioning - Cannibalism
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Occurs when two or more products aim at the same target market
-When One product in a product line eats away at the sales at another in the same line - 5 stages in a Product Life Cycle:
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Product Development
Introduction
Growth
Maturity
Decline - Product Development Stage
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High Failure Rate among new Product
High costs associated with development
Recently, much emphasis has been placed on speed to market - Introductory Phase
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The time a product spends in this phase is tough to estimate
Promotion costs are high, so as to increase product awareness
-THe choice needs to be made as to whether it will be a pioneer vs. a late entrant, and whether it will use skimming of penetration pricing. - Maturity Stage
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Slowed Sales growth may be remedied by:
more promotion
stealing customers from competitiors
targeting a new target market
modifying the product - Factors taht affect the adoption rate:
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1.Relative advantage-how much better an option the product is over the nearest competition
2.Comunicability-how easily the benefits can be conveyed
3.Compatibility-how well the product corresponds with customer's lifestyle
4.Complexity- how tough the product is to learn
5.Divisibility-How easily the product can be used for a trial period - SKimming vs. Penetration
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Skimming-high prices to skim off the top of the market (high profit, but low market share)
Penetration- cutting the price to gobble up market share (low profit margins, but large market share) - Decline Stage
- Must decide whether product should be trashed, or whether it is viable to another company
- Distribution Management
- Managing the transfer of goods from producers to consumers with efficiency and effectivness
- Direct vs. Indirect Channels
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Direct = no middlemen (zero level channel)
Indirect= wholesalers, buyers, etc.... multiple levels inbetween consumer and manufacturers - Cost vs. Value of Indirect Channels
- While it does add costs to the consumers to have intermediarys, it also adds valeus in cases (i.e. cow example)
- Intensive Distribution
- In as many outlets as possible, typically convenience goods
- Selective Distribution
- In several outlets, typically shopping goods
- Exclusive Distribution
- In only a few outlets, typically specialty goods
- Horizontal Integration
- When one channel member buys a similar company on the same channel level
- Backwards Channel Integration
- WHen a channel member closer to a consumer buys a company that is farther away from the consumer
- fowards vertical integration
- WHen a channel member farther away from the consumer purchases a channel member closer
- Vertical Marketing System
- Managing the Activities and strategies of Channel Members
- Corporate VMS
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most control, yet most cost
When a corporation controls a channel by owning several companies on different levels of it - Contractual VMS
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a legal aggrement specifies how certain channel functions must be formed
----franchising is a common method of this - franchiser vs. franchisee
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franchiser-the person who is selling the "concept"
franchisee- the person who purchases the concept - Administered VMS
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when the most powerful channel member, or the channel captain, uses its influence to control the activities of other channel members
-members should agree to increase sales and profits
-often causes fighting - Growth Stage
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Period of time in which a product experiences a growth in sales. Often, a producer of distributor may lose ability to keep up
-COuld result in the "Weeding out" of weaker competition