MKTG 310

MKTG notes p 237-49

237 Improving Marketing Mix

Crayola - oily chalk- Binney & Smith

Line extension  ie/new flavors - less risky than new products

238-9 Modify Product

1. must be modifiable
2. C must percieve modification 
3. Mod must be consistant w/ C's needs/desires

• drawback: C may see as riskier

239-40 Types of modifications

• Quality : Dependabily/Durability can be ^ or down 
• Functional: Versatility/ Effectiveness /convenience/safety  Require Redesign usually , can inrease mkt share, show progressive image for O, reduce liability
• Aesthetic: Sensory Appeal ^mkt share, civic - risk > customers may not like change, differentiates from competitors, can increase mkt share

240-47 Developing New Products

New Product Development process 

1. Idea Generation:
2. Screening : making sure it wont cannibalize, choosing best ideas, lots are rejected
3. Concept Testing : pretest
4. Business Analysis:how does it fit into our O
5. Product Development: prototype/r&D, very lengthy and expensive
6. Test Marketing : decrease risk of fail, but there is a risk of competition screwing up your mkt research
7. Commercialization: sell, ie/ map and gradual intro into mkt  v all at once

Ch 13

Establishing Prices

1. Development of pricing objectives 

a)Survival:adust $* to ^ sales to match expenses

b)Profit - pi- to max profit - identify price in order to max profit

c)ReturnOnInvestment

d)MKT share: maintain or ^ sales in relation to competition

e)Cash flow: set $ to encourage rapid sales

f)Status quo: set $ to stabilize D and sales

g) Product quality:set $ to recover C of R&D expenditures to get HD images

2. Assessment of tgt markets , evaluation of price

value: price and quality 

also variable on place - ie/ movie concessions $=^^^

3.Eval of competitors price
4. selection of price basis

Cost based Pricing 

Cost plus pricing 

adding % or $amount to cost of Product

very common

Markup pricing 

M^s  as % of cost   

15(M^)/45(retail cost)=33.3%

M^ as % of sell price  

15(M^)/60(sell price) = 25% 

make sure you know if its % of cost or sell price when discussing M^

Demand Based pricing 

ie/ discount @ low D times

Competition based pricing

Costs are secondary to competitors pricing - airlines use - same routes are EXACT same price between competitors  

Very Common 

5. Selection of pricing strategy

Differential pricing

6.determine specific price

*$=price

O=organization

C=customer or maybe cost

pi=profit

tgt=target

eval=evaluation

D=demand