mystery question

• Product/service differentiation


  Makes products seem different from competitors
• Purpose of product/service differentiation

  • To gain control over the market, especially price
• Types of differentiation


  • Customer services
  • Environmental concerns
  • Convenience
  • Social/ethical issues
• Positioning


  Create an image about the product against competitors
• Products


  Goods and/or services
• Branding


  To identify a specific product/business, distinguish from competition
• Benefits of branding


  • Distinguish
  • Provide psychological rewards, like prestige or status
  • Repeat sales
  • Encourage customer loyalty
  • New product introduction
  • Carry over effect for new products
• Packaging


  Development of both product's container and graphic design
• Benefits of packaging


  • Preserve product
  • Positive impressionism
  • Transportation
  • Attract customers
• Labelling


  Presentation of products/packaging's information- ingredients, operations, shelf life, country of origin
• Price


  Amount of money a consumer is willing to pay for a product
• Pricing methods


  • Cost-based pricing
  • Market-based pricing
  • Competition-based pricing
• Cost-based pricing


  Cost of production+additional costs x markup percentage= price. Used by wholesalers+retailers.
• Cons of cost-based pricing: difficult to accurately price (too high, won't sell, too low, unneeded profit loss)
• Market-based pricing


  Pricing based on levels of supply and demand. Demand is high, supply is low, prices are high, and vice versa.
• Competition-based pricing


  Based on competition with similar products. Below competition- undercutting competition, break into established markets. Equal-avoid market research on consumer pricing needs, above- seen superior, appeal to status-conscious consumers.
• Pricing strategies

  • Skimming
  • Penetration
  • Loss leaders
  • Price points
• Price skimming


  Highest possible price for product, establishment stage. prestige and status for consumers, gain high profits when demand is strong.
• Pricing penetration


  Offering lowest possible price. Achieve large market share for product (short-term)-mass marketing pricing.
• Cons of pricing penetration: difficult to raise prices, locked into low sales revenue.
• Loss leaders


  Prices below cost price. Attract customers to business, low price image, for overstocked/slow products.
• Cons of loss leaders: done incorrectly-lose money.
• Price points


  Predetermined prices. Retailers, clothing stores. Limit key prices. Encourage consumers to buy more expensive products.
• 1. E-marketing

  Use of the internet to market and advertise
• 1. marketing methods


  • Website
  • Blogs
  • Podcasts
  • Social media advertising (SMA)
  • Text messages
• Pros of social media advertising

  • Inexpensive form of ads
  • Easy to use+monitor
  • Effective to get exposure
• Cons of social media advertising


  • Cannot accurately measure consumer reach and frequency
  • Enable criticism and ridicule of business/product
  • Cannot stop it
• Publicity and public relations (PR)

  Activities aimed to create positive relation between business and customer
• Aims of publicity


  • Enhance product image
  • Product awareness
  • High business positive features
  • Reduce negative image
• Ways to achieve publicity

  • Issues monitoring
  • Crisis management
  • Promoting positive image
  • Communicating messages
• Opinion leaders


  Respected individuals, used as an information outlet to endorse products to consumers
• Examples of opinion leaders


  • Models
  • Celebrities
  • Athletes
  • Musicians
• Word of mouth


  Individuals influence each other through conversations, and use social media platforms, as consumers trust word of mouth over advertisement
• Advertising


  Paid, non personal, message communicated through a mass medium
• Purposes of advertising


  • Increase sales
  • Business profit
• Advertising media


  • Mass marketing (television, newspapers)
  • Marketing catalogue (mail to households)
  • Telemarketing (telephone use to contract consumers)
  • E-marketing (use of internet)
  • Social media advertising (use of social media platforms)
  • Billboards
• Factors influencing advertising media choice


  • Product type
  • Business budget
  • Medium cost
  • Life cycle position
• Place/distribution


  The process of distributing products
• Channels of distribution/marketing channels

  • Producer to consumer (simplest channel, no intermediaries)
  • Producer to retailer to consumer (intermediary buys product from business and resells to consumers)
  • Producer to wholesaler to retailer to customer (wholesalers buys in bulks, sells to retailer)
  • Producer to agent to wholesaler to intermediary to retailer to consumers (agent distributes the product, but does not own it, profits off commissions)
• Other distribution channels


  • Telemarketing- customers purchase via television or computer
  • Internet marketing- customers purchase through the internet