• a high initial price to help the company recover the costs of development as well as capitalize on the price insensitivity of early buyers
• setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product
• tend to attract competitors eager to enter the market because they see the opportunity for profit

• a low initial price to discourage competitive entry
• setting a low initial price on a new product to appeal immediately to the mass market
• helps build unit volume, but a company must closely monitor costs

• a group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range
• each product line has its own marketing strategy

• customers dont need to learn new behaviors
• gain consumer awareness and wide distribution

• the stage that develops a pool of concepts as candidates for new products, building on the previous stage's results
• customer and supplier suggestions
• employee and co-worker suggestions
• research and development laboratories
• competitive products
• universities, inventors, and smaller firms

1. introduction stage
2. growth stage
3. maturity stage
4. decline stage

• stage that turns the idea on paper into a prototype
• brainstorming
• service encounters- make up the service to study the points of interaction between consumers and the service provider
• safety tests- critical for when the product isn't used as planned

• offering a product to prospective consumers under realistic purchase conditions to see if they will buy
• test marketing- offering a product for sale on a limited basis in a defined area, determining whether consumers will actually buy the product and to try different ways of marketing it
• simulated test market- technique that stimulates a full-scale test market but in a limited fashion

• a company tries to:
• find new customers
• increase a product's use
• create a new situation

• the added value a brandname gives to a product beyond the functional benefits provided
• provides a competitive advantage
• consumers willing to pay a premium

private branding

(private labeling or reseller branding)

• when a company manufactures products but sells them under the brand name of a wholesaler or retailer
• sears/kenmore
• typically produces high profits for manufacturers and resellers

• generalized life cycle- total industry or product class sales curve
• high-learning product: one for which significant customer education is required and there is an extended introductory period
• low-learning product: sales begin immediately because little learning is required by the consumer, and the benefits of purchase are readily understood
• fashion product- a style of the times
• fad product- experiences rapid sales on introduction and then an equally rapid decline

• changes the place a product has in a consumer's mind relative to competitive products; four factors:
• reacting to a competitor's position
• reaching a new market
• catching a rising trend
• changing the value offered

• arises from a sequential building process consisiting of four steps:
• develop positive brand awareness
• establish a brand's meaning
• elicit the proper response
• create intense brand loyalty

• occurs between intermediaries at the same level in a marketing channel, such as between two or more retailers or two or more wholesalers that handle the same manufacturer's brands

• arises when a manufacturer increases its distribution coverage in a geographical area
• dual distribution causes conflict when different types of retailers carry the same brands

• a firm tries to place its products and services in as many outlets as possible
• usually chosen for convenience products or services such as candy & fast food

• arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals
• dual distribution
• vertical integration
• exclusive dealing
• tying arrangements
• refusal to deal
• resale restrictions

• graph relating the quantity sold and price, which shows the maximum numbers of units that will be sold at a given price

• consumer tastes- depend on many factors such as demographics, culture, and technology
• price and availability of similar products- the laws of demand work for one's competitors too, as the price of substitutes falls or their availability increases, the demand for a product will fall
• consumer income- in general, as real consumers income increases, demand for a product also increases

(the first two factors influence what consumers want to buy, the third affects what they can buy)

• product/service substitutes are price elastic
• products/services considered necessities are price inelastic
• items that require large cash outlays compared with a person's disposable income are price elastic

• delivery by people: unskilled labor, skilled labor, professionals
• delivery by equipment: automated, operated by relatively unskilled operators
• profit or nonprofit organizations
• government sponsored

• provides a financial advantage
• brand licensing- a contractual agreement whereby one company allows its brand name or trademarks to be used with products or services offered by another company for a royalty fee

• suggest product benefits
• be memorable and positive
• fit the company or product image
• have no legal or regulatory restrictions
• be simple and emotional

• communication benefits
• functional benefits
• perceptual benefits

• intermediaries are inserted between the producer and consumers and perform numerous channel functions
• retailers --> consumers
• wholesalers --> retailers --> cosumers
• agents --> wholesalers --> retailers --> consumers

• transactional- involves buying, selling, and risk taking because they stock merchandise in anticipation of sales
• logistical- evident in the gathering, storing, and dispersing of products (sorting&transporting)
• facilitating- assist producers in making goods and services more attractive to buyers (financing, marketing info)