...Marketing Notes 20 MARKETING MIX I n the previous lesson you learnt that marketing identifies consumers’ needs and supplies various goods and services to satisfy those needs most effectively. So the businessman needs to: (a) produce or manufacture the product according to consumers’ need; (b) make available it at a price that the consumers’ find reasonable; (c) supply the product to the consumers at different outlets they can conveniently approach; and (d) inform the consumers about the product and its characteristics through the media they have access to. So the marketing manager concentrates on four major decision areas while planning the marketing activities, namely, (i) products, (ii) price, (iii) place (distribution) and (iv) promotion. These 4 ‘P’s are called as elements of marketing and together they constitute the marketing mix. All these are inter-related because a decision in one area affects decisions in other areas. In this lesson you will learn about the basic aspects relating to these 4‘P’s viz., product, price, place and promotion. OBJECTIVES After studying this lesson, you will be able to : • • • • • • • • explain the concept of marketing mix and its components; explain the meaning of product and its classification; state the various factors affecting pricing decisions; describe different methods of pricing; state the meaning of channels of distribution; identify the various channels of distribution; state the factors affecting choice of a channel of...
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...marketing process. Think of a product that you buy often. You might not realize that everything about that product—from the time it is created, produced, packaged, and shipped to you—involves various facets of marketing. This chapter explains the concept of marketing and discusses the five forces that constitute the external marketing environment. It also explains the purpose of a marketing plan, identifies the four components of the marketing mix, and discusses the necessity of identifying market segments. As the chapter unfolds, many variables surrounding both the consumer and organizational markets are discussed, as well as a focus on distinguishing features between products and services and the importance of branding and packaging. The chapter also discusses the consumer buying process, organizational markets, and key considerations in the new product development process. Finally, it looks at the challenges that arise in adopting an international marketing mix and the ways in which small businesses can benefit from an understanding of the marketing mix. Learning Objectives A. Explain the concept of marketing and identify the five forces that constitute the external marketing environment. B. Explain market segmentation and how it is used in target marketing. C. Describe the key factors that influence the consumer buying process. D. Discuss the three categories of organizational markets. E. Explain the definition of a product as a value package and...
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...Log In We've updated our privacy policy! Click here to read about it. MBA-Marketing Industrial Marketing Pricingenvironment:Therelationshipbetweenbuyer, seller andcompetitorCharacteristics of Industrial Prices: Morris has identified sevendistinguishing characteristics of Industrial prices.1. Price is not an independent variable. It is intertwined with product promotionand distribution strategies.2. The real price an industrial customer pays is quite different from the listprice; this is because of the factors like delivery and installation cost, trainingcost, discounts, financing cost, trade in allowances etc. AcroPDF - A Quality PDF Writer and PDF Converter to create PDF files. To remove the line, buy a license. MBA-Marketing Industrial Marketing3. By changing the quantity of goods & services provided by the seller,changing the premiums and discounts that are offered, changing the time andplace of payment and also in numerous other ways prices can be changed.Compare to product and distribution decisions, the decision regarding pricing ismore flexible.4. The complimentary and substitute product sold by the same company shouldbe considered at the time of deciding price for industrial goods.5. Prices can be resolved through negotiation in many a cases. In most of thecases the industrial prices are established by competitive bidding on a project byproject basis.6. Industrial buyers who are experienced and able to estimate the vendors’approximate production costs...
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...buyer behavior The Business marketing or Industrial marketing is the marketing of goods and services to commercial enterprises, governments, and other nonprofit institutions for use in the goods and services that they, in turn, produce for resale to other industrial customers. By contrast, consumer goods marketing are the marketing of goods and services to individuals and family units for personal consumption and to wholesalers and retailers in consumer goods distribution systems. What consumers buy, they use for themselves or for consumption by members of a family. Individual customers buy to support the profit-making or nonprofit functions in which the organization is engaged. To understand some of the major differences between business-to-business and consumer marketing, it is useful to think of the industrial marketing system as consisting of two key linkages. The first is the external interface between the marketing/sales function of the producer and the end user. The second is internal interface between the producer’s marketing/sales and production functions. While each of these linkages has considerable complexity, the two sets of linkages serve as convenient handles to explore the major differences between business-to-business and consumer marketing. Given the distinguishing characteristics of both the internal and the external linkages, the formulation and execution of the marketing mix poses different challenges in industrial markets than in consumer markets. Market...
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... Company description General Electric Co. is a technology and financial services company that develops and manufactures products for the generation, transmission, distribution, control and utilization of electricity. Its products and services include aircraft engines, power generation, water processing, security technology, medical imaging, business and consumer financing, media content and industrial products. The company operates through eight segments: Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation, Appliances & Lighting and GE Capital. The Power & Water segment serves power generation, industrial, government and other customers worldwide with products and services related to energy production. The Oil & Gas segment supplies mission critical equipment for the global oil and gas industry, used in applications spanning the entire value chain from drilling and completion through production, liquefied natural gas and pipeline compression, pipeline inspection, and downstream processing in refineries and petrochemical plants. The Energy Management segment designs technology solutions for the delivery, management, conversion and optimization of electrical power for customers across multiple energy-intensive industries. The Aviation segment products and services include jet engines, aerospace systems and equipment, replacement parts and repair and maintenance services for all categories of commercial aircraft; for a wide variety of military aircraft...
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...SUBDOMAIN: 309.1 -‐ ECONOMICS Competency 309.1.3: Competition The graduate analyzes a firm’s competitive environment to determine whether the market exhibits characteristics of perfect competition, monopoly, oligopoly, and monopolistic competition. Objective 309.1.3-‐06: Describe how the need for governmental price regulation differs for firms in different competitive environments. Date: February 9, 2015 A) The Anti-‐Trust Laws Sherman Act (1890) The Sherman Act came about due to a growing public resentment of trusts. The antitrust legislation is broken down into two parts: • Section 1 “Every contract, combination in the form of a trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations is declared to be illegal.” Section 2 “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a felony” (Brue, Flynn, & McConnell, 2012) ...
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...Chapter 12: Setting Product Strategy GENERAL CONCEPT QUESTIONS Multiple Choice 1. Marketing planning begins with the formulation of an offering to ________ target customers’ needs or wants. a. exceed b. meet c. capture d. compete with e. comprehend Answer: b Page: 372 Level of difficulty: Easy 2. The customer will judge the offering by three basis elements: ________, services mix and quality, and price. a. performance b. salespeople c. price d. product features and quality e. none of the above Answer: d Page: 372 Level of difficulty: Easy 3. The components of the market offering include all of the following EXCEPT ________. a. product feature b. product quality c. reputation of firm d. services mix and quality e. value-based pricing Answer: c Page: 372 Level of difficulty: Easy 4. In planning its market offering, the marketer needs to address five product levels. These levels include all of the following EXCEPT ________. a. potential product b. augmented product c. core benefit d. basic product e. product usage/purpose Answer: e Page: 372 Level of difficulty: Medium 5. The five product levels constitute a ________. At each level more customer value is added. a. customer augmented product b. customer consumption system c. customer value hierarchy d. customer perceived value e. customer hierarchy Answer: c Page: 372...
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...governments and the ultimate consumer (B2C). The B2C products like small and large appliances is targeted to all consumer groups regardless of income, age, household size education or ethnic background or psychographic and behavioral background. The B2B products, in demographic terms (customer-based segmentation) are intended to suit specific organizational markets – a broad business segment, governments’ and countries’ infrastructural development projects in over 120 countries. All demographic groups will use our healthcare equipment sold to a hospitals and other institutions. GE is a conglomerate; our size is an asset, our Brand a household name with a competitive advantage that we should use to position ourselves in sub-Saharan Africa. This is an opportunity, since these emerging young -fairly stable- democracies are experiencing an astounding growth. Tanzania, Angola, Nigeria, Mozambique are some of the countries identified, and GE is well positioned to compete for infrastructural projects, manufacturing equipment and financial services. GE is a brand well recognized around the world, and well perceived in all segments of our target markets, unique, with the competitive advantage to compete and attain both our immediate and long-term goals. PRODUCT STRATEGIES Our products, the manufacture and generation, transmission and distribution of electricity (nuclear, thermal, solar, wind and gas), lighting, appliances, industrial automation, medical equipment, motors, marine turbines...
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...ONUR TAMUR PRICING WHEN ENTERING A NEW MARKET IN B2B ENVIROMENT: Understanding the B2B Dynamics Seminar Report ii ABSTRACT With the rise of globalization and saturated local markets, many companies started chasing international opportunities that would help them expand to new countries and increase their brand recognition around the globe. One of the challenges that companies face while entering a new market is defining the right price and pricing of their offering to be competitive and successful in the market. In B2B area, there are not any wide research on pricing issues that companies face in the markets that they are planning to enter and the effects of business relations on pricing. This paper focuses on market entry strategies and market entry modes, the fundamentals of pricing in a new market and the differences of B2B and B2C pricing. The study covers market entry modes and its impact on profitability, value creation in B2B area and the key aspects of pricing behaviour while entering a new market. This study in general provides a framework for implementing the right pricing strategy while entering new markets and defining the right pricing behaviour in B2B environment. This framework enables companies to understand the dynamics of B2B environment covering buyer-supplier and distributors relations and providing pricing models for companies to be a competitive player. Tamur, O. iii PREFACE This paper discusses the concepts of pricing and pricing behaviour...
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...Industrial Marketing V/S Consumer Marketing Promotion: In the case of mass distributed consumer goods, advertising performs a large apart of the sales job. But in the case of industrial goods it is the personal selling that carries the main burden of persuading customers to buy. The reasons for this may be mainly due to the following factors : a) Need for providing technical information about the product. b) Customers to be contracted are fewer in number. c) The channels of distribution involved are shorter. d) Necessity for a direct contract between producer and user especially for rendering 'pre-sales' and 'after-sales' services. Personal Salesmanship is,therefore, highly needed in the industrial goods market. Whether it is the selling of raw materials or supplies or selling the capital equipments, the services of an efficient an trained salesman are inevitable. He must have technical knowledge of his customer's production processes. He should also have the ability to convince the customers of the savings resulting form the purchase of the equipment he wants to sell. It is also his duty to install the machinery and prove its worth through 'trial running'. The nature of the salesman's job is dependent on the buying situation. 1. Whether the customer is buying the product for the first time, 2. Whether the customer is changing to a new source of supply (Here, the customer is in a position to weigh the merits and demerits of the new machines against the previous...
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...Journal of Business & Industrial Marketing Emerald Article: Activity-based costing: a powerful tool for pricing John C. Lere Article information: To cite this document: John C. Lere, (2000),"Activity-based costing: a powerful tool for pricing", Journal of Business & Industrial Marketing, Vol. 15 Iss: 1 pp. 23 - 33 Permanent link to this document: http://dx.doi.org/10.1108/08858620010311539 Downloaded on: 05-04-2012 References: This document contains references to 4 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 4868 times. Access to this document was granted through an Emerald subscription provided by CAIRO UNIVERSITY For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines are available for all. Additional help for authors is available for Emerald subscribers. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com With over forty years' experience, Emerald Group Publishing is a leading independent publisher of global research with impact in business, society, public policy and education. In total, Emerald publishes over 275 journals and more than 130 book series, as well as an extensive range of online products and services. Emerald is both COUNTER 3 and TRANSFER compliant. The organization...
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...American industrial companies, something unusual is going on: an all-out search for new ways to charge more money without raising prices. Goodyear Tire & Rubber Co. has chopped discounts to its biggest distributors, which had been taking advantage of favorable prices to undercut Goodyear elsewhere. Jergens Inc., a Cleveland industrial parts maker, has started charging big premiums for small orders of fasteners that it used to price like larger orders. Union Pacific Corp. has started charging its rail-freight customers as much as 40% extra for faster delivery. Low inflation and fierce global competition are huge barriers to price increases. But in a weak economy, many companies have already jumped through hoops to cut costs and boost productivity. So now they need to find new ways to wring more money from their customers. For many industrial companies, there's some room to maneuver because they haven't looked at pricing this way before. Their businesses have run on bulk rates charged for commodities -- some of them measured by weight -- with big discounts for big volumes. Many are used to seeing prices go down over time, not up. The quest for ways to reverse that trend has broad implications. The U.S. economy is at a delicate crossroads, recovering weakly as consumers spend big but businesses don't. Higher prices could give businesses a boost they need to get their own spending back in gear. Finding creative ways to increase prices is a more familiar tactic of consumer-product companies...
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...Customer value-based pricing strategies: why companies resist Andreas Hinterhuber Andreas Hinterhuber is based at Hinterhuber and Partners, Innsbruck, Austria. Introduction Pricing has a huge impact on profitability. Pricing strategies vary considerably across industries, countries and customers. Nevertheless, researchers generally concur that pricing strategies can be categorised into three groups: 1. cost-based pricing; 2. competition-based pricing; and 3. customer value-based pricing. Of these, customer value-based pricing is increasingly recognised in the literature as superior to all other pricing strategies (Ingenbleek et al., 2003). For example, Monroe (2002, p. 36) observes that: ‘‘ . . . the profit potential for having a value-oriented pricing strategy that works is far greater than with any other pricing approach’’. Similarly, Cannon and Morgan (1990) recommend value pricing if profit maximisation is the objective, and Docters et al. (2004, p. 16) refer to value-based pricing as ‘‘one of the best pricing methods’’. Practitioners have also recognised the advantages of value-based pricing strategies. Several companies have successfully adopted such strategies. These include pharmaceutical companies such as Sanofi-Aventis, information technology companies such as SAP and Vendavo, wireless internet service providers such as the Australian company Xone, airlines such as Lufthansa, vehicle manufacturers such as BMW, and biotech companies such as Tigris Pharmaceuticals...
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...1. Determine and discuss a pricing strategy (Penetration and Skimming) The penetration pricing strategy approach is what we are going use to represent our SONO water filter products in today’s market. Since it serves as many customers as possible representing different valua¬tions, this pric¬ing model will be our best option. The advantage this approach holds for us is the low volume customers, who presumably have a relatively lower valu¬ation for water consumption, will purchase fewer replacement filters. Conversely, high volume customers, who presumably have a larger consumption rate than single families will pur¬chase more cartridges. The result will be making more money on the high valuation consum¬ers, as the price for the pitchers will be reasonably cheap for both the target consumers. It’s a brilliant pric¬ing strategy that captures the value cus¬tomers place on our product. In other words we will be approaching the market with the razor/razor blade model.2 2. Determine and discuss pricing tactics (product line pricing, Value pricing, Differential pricing, or Competing against private brands) to be used for your product. Since Sono Filter brand name and logo has enormous recognition in the Asian Market our objective will be introducing it as a new manufacture in the United States and to become a brand of choice during consumers purchasing decision. The private labeling will become a significant component of the water filtration industry and that a plethora of distributors...
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...the market. A Define Industrial Regulation Explain why industrial regulation exists, how it affects the market, provide entities affected by industrial regulation in terms of market structure, and why industrial regulation affects those entities. Economic regulation is a form of government intervention designed to influence the behavior of firms and individuals in the private sector (Econ Guru Web). Other forms include public expenditures, taxes, government ownership, loans and loan guarantees, tax expenditures, equity interests in private companies and moral suasion. It is the imposition of rules by a government, backed by the use of penalties, that are intended specifically to modify the economic behavior of individuals and firms in the private sector, regulation in general is aimed at narrowing choices in certain areas, including prices (airline fares, minimum wages, certain agricultural products, telephone rates), supply (broadcasting licenses, occupational licensing, agricultural production quotas, pipeline certificates "of public convenience and necessity"), rate of return (public utilities, pipelines), disclosure of information (securities prospectuses, content labeling), methods ECONOMICS ESSAY III 2 of production (effluent standards, worker health and safety standards), standards for products or services (safety of children's toys, quality of food products, content requirements in broadcasting) and conditions of service (requirements to act as a...
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