10,11,12

• New Product Development (NPD)


  The development of original products, product improvements, product modifications, and new brands through firm's own product development efforts
• 8 major steps for companies to plan and set up NDP

  - Idea generation

  - Idea screening

  - Concept development and testing

  - Marketing strategy

  - Business analysis

  - Product development

  - Test marketing

  - Commercialization
• 3 major pricing strategies

  - customer value-based

  - cost-based

  - competition-based
• Product life-cycle strategies (PLC)

  product development

  introduction

  growth

  maturity

  decline
• Pricing in different types of markets

  1. Pure competition

  2. Monopolistic competition

  3. Oligopolistic competition

  4. Pure monopoly
• Market-Skimming Pricing


  setting high initial prices to "skim" revenue layers from the market -> skims the maximum amount of revenue from the various segments of the market
• Market-Penetration Pricing


  setting a low price for a new product in order to attract a large number of buyers and a large market share
• Product Mix Pricing Strategies

  1. Product line pricing

  2. Optional-product pricing

  3. Captive-product pricing

  4. By-product pricing

  5. Product bundle pricing
• Price Adjustment Strategies


  1. Discount and allowance pricing

  2. Segmented pricing

  3. Psychological pricing

  4. Promotional pricing

  5. Geographical pricing

  6. Dynamic pricing

  7. International pricing
• Prices changes


  Initiating price changes : Company must anticipate buyer and competitors' reaction to price change

  
  

  Responding to price changes : How firm should response to a price change by a competitor? Needs to consider several issues
• Price fixing


  sellers must set prices without talking to competitors
• Predatory pricing


  legislation prohibits selling below costs with the intention of punishing a competitor or gaining higher long-term profits by putting competitors out of business
• Robinson-Patman Act


  prevents unfair price discrimination by ensuring that seller offer same price terms to customers at a given level of trade
• Upstream partners


  firms that supply raw materials, components, parts, information, finances, and expertise needed to create product or service
• Downstream partners


  marketing channels or distribution channels that look toward the customer, including retailers and wholesalers (= channel partners)
• working through a distributor

  reduces amount of work for both producer and customer
• key functions of channel members

  1. information

  2. promotion

  3. contact

  4. matching

  5. negotiation

  6. physical distribution

  7. financing

  8. risk taking
• Number of Channel Levels

  channel level, direct marketing channel, indirect marketing channel
• Channel level


  a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
• Direct marketing channel


  a marketing channel that has no intermediary levels
• Indirect marketing channel


  a marketing channel containing one or more intermediary levels
• Length of channel


  the number of intermediary levels
• Marketing channels


  consist of firms that have partnered for their common good, with each member playing a specialized role and all member interdependent on each other
• Conflict in channel


  Horizontal conflict occurs among firms at the same level of the channel

  Vertical conflict between different levels of the same channel
• Vertical Marketing System (VMS)


  Channel structure consisting of producers, wholesalers, and retailers acting in a unified way to accomplish work of channel
• 3 major types of VMS

  1. Corporate : one channel member owns the other

  
  

  2. Contractual : one channel member takes the lead on the basis of contractual agreements

  
  

  3. Administered : one member has more dominance and they organize the whole nature that is associated with the vertical marketing system in an informal manner
• Horizontal Marketing System


  a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity
• Multichannel Distribution Systems


  a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
• Channel Design Decisions


  1) Analyzes customer needs

  2) setting channel objectives

  3) identifying major channel alternatives

  4) evaluate major alternative
• Marketing channel management


  selecting, managing and motivating individual channel members and evaluating their performance over time
• 4 decisions on marketing channel management

  Selecting,

  Managing,

  Motivating,

  Evaluating channel members

  
  

  channel members