1 / 20

Chapter Fourteen

Chapter Fourteen. Developing and Pricing Products and Services. Consumer Choices of Best Product Innovation of ALL Time. Source: American Demographics. Product Development & Value Package. Value- Total Product Offer Product Line Product Mix Product Differentiation.

zachariah
Download Presentation

Chapter Fourteen

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter Fourteen Developing and Pricing Products and Services

  2. Consumer Choices of Best Product Innovation of ALL Time Source:American Demographics

  3. Product Development & Value Package • Value- Total Product Offer • Product Line • Product Mix • Product Differentiation

  4. Classic Product Failures Company Loss Failure Edsel Corfam VideoDisc PCjr New Coke Premier Ford Motor Co. DuPont RCA IBM Coca-Cola R. J. Reynolds $250 M $100 M $500 M $ 40 M No $ Number No $ Number

  5. First Products Produced byFive Major Companies Hershey Caramels Amway No-rinse car wash Heinz Horseradish Avon Little Dot perfume set 3M Sandpaper Horseradish Source: World Features Syndicate

  6. Theme parks & resorts ABC Television Network TV & radio stations Film studios & production Video programs & licensing Consumer products Publishing Mickey Mouse’sProduct Mix

  7. Marketing Classes of Goods & Services • Consumer • Convenience • Shopping • Specialty • Unsought • Industrial

  8. Packaging • Protect • Attract • Describe • Explain • Warranties • Price, Value, Uses

  9. Brand & Trademark Categories Manufacturers’ Knockoff Dealer/Private Generic Equity Loyalty Awareness Association Branding Mary’s Fresh Fruit Jams Fresh Daily Straight from the Garden

  10. Market Value of A Brand Name Billions of Dollars Source: Interbrand Group

  11. A Good Brand Name... • Speaks directly to product’s target customers • Attracts/motivates consumers to try it • Is memorable/sticks in customers’ minds • Is distinctive enough to protect it legally Brand Name

  12. New-Product Development Idea Generation Screening Analysis Development Testing Commercialize

  13. Figure 14.7 Sales and Profits During the PLC

  14. What They Cost When First Introduced 1927 Transatlantic Call $ 75/3 min. 1947 Microwave Oven $ 3,000 1964 FAX unit rental $ 850/month 1970 Pocket Calculator $ 150 1974 VCR Tape $ 50 Source: World Features Syndicate

  15. Objectives ROI Traffic Market Share Sales Image Social Cost-Based Value- Service Break-Even Fixed Cost Variable Cost Strategies Skim Penetration EDLP High-Low Leadership Pricing

  16. Breakeven Chart (Figure 14.9) Total Revenue or Total Cost Number of Units

  17. Pricing Using Breakeven Analysis ProblemShould we charge $2 or $3 per box? CostsTotal Fixed Costs $400,000 Variable Cost $ 1 per box Market Research Forecast Company can sell: 290,000 boxes at $2 @ 210,000 boxes at $3 @ Breakeven point = total fixed cost price - variable cost (per unit) (per unit) $2 price = $400,000 400,000 units to breakeven $2 - $1 $3 price = $400,000 200,000 units to breakeven $3 - $1 Breakeven Analysis

  18. Market Share-Cable Source:Wall Street Journal 1/12/2000

  19. Movies- Domestic Box Office Market Share Source: Wall Street Journal, 1/12/2000

  20. Market Share ofVideo Sales Source:Wall Street Journal, 1/12/2000

More Related