CREATING AND PRICING PRODUCTS THAT SATISFY CUSTOMERS (BRANDING, PACKAGING,…
CREATING AND PRICING PRODUCTS THAT SATISFY CUSTOMERS
BRANDING, PACKAGING, AND LABELING
BRANDING, PACKING, and LABELING: Three important feature of a product (particular a consumer Product) are its BRAND, PACKAGE, and LABEL.
WHAT IS A BRAND?
BRAND: Is a NAME, TERM, SYMBOL, or any combination that identifies a seller's products and distinguishes it from other seller's products.
BRAND NAME: Is the part of the brand that can be spoken. It may include LETTERS, WORDS, NUMBERS, or PRONOUNCEABLE SYMBOLS.
BRAND MARK: On the other hand, is the part of a brand that is symbol or distinctive design.
TRADEMARK: Is a brand name or brand mark that is registered with the U.S. Patent and Trademark Office and thus is legally protected from use by anyone except the owner.
TRADE NAME: Is the complete and legal name of the organization.
TYPES OF BRANDS:
BRANDS are often classified according to who owns them: MANUFACTURES or STORES.
MANUFACTURER (or PRODUCER) BRAND: As the name implies, brand that is owned by the manufacturer. Some consumers prefer manufacturer brands because they are usually known, offer consistent quality, and are widely available.
A STORE (or PRIVATE) BRAND Is a brand that is owned by an individual wholesaler or retailer.
GENERIC PRODUCT (or GENERIC BRAND): Is a product with no brand at all. Generics products, available in supermarkets since 1977.
BENEFITS OF BRANDING
Both buyers and sellers benefit from branding.
BRAND LOYALTY: The extent to which a customer is favorable toward buying a specific brand.
BRAND EQUITY: Is the MARKETING and financial value associated with a bran's strength in a market.
CHOOSING AND PROTECTING A BRAND
A number of issue should be considered when selecting a brand name. The NAME should be EASY for CUSTOMER to SAY, SPELL, and RECALL. SHORT, one-syllable names such a TIDE.
The basic branding decision for any firm is how to brand its products. A producer may market its products under its own BRANDS, PRIVATE BRANDS, or BOT.
INDIVIDUAL BRANDING: Is the strategy in which a firm uses a different brand for each of its products.
FAMILY BRANDING: Is the strategy in which a firm uses the same brand for all or most of its products.
BRAND EXTENSIONS: Occurs when an organization uses one of its existing brands to BRAND a new product in a different product category.
PACKAGING: Consist of all the activities involved in DEVELOPING and PROVIDING a container with graphics for a product,
PACKAGING FUNCTIONS: Effective packaging is a combination of function and aesthetics. The basic function of packaging materials is to protect the product and maintain its functional form.
PACKAGE DESIGN CONSIDERATION Many factors must be weighed when developing packages. Obviously, one major consideration is cost. Expensive packaging can affect the final cost of a product.
LABELING: Is the presentation of information on a product or its package. The LABEL is the part of a package that contains INFORMATION, INCLUDING the BRAND NAME and MARK, THE registered TRADEMARK SYMBOL (UPC), which is used for automated checkout and inventory control.
EXPRESS WARRANTY: is a witting explanation of the producer's responsibilities in the event that a product is found to be defective or otherwise unsatisfactory.
A product is a set of attributes and benefits that has been designed to satisfy its market while earning a profit for its seller. PRICING is an integral part of this equation.
THE MEANING AND USE OF PRICE
The PRICE of a product is the amount of money a seller is willing to accept in exchange for the product at a given time and under given circumstances. At times the price result from negotiations between buyer and seller.
PRICE AND NON-PRICE COMPETITION
Before a product's price can be set, an organization must determine whether it will compete based on price alone.
PRICE COMPETITION: Occurs when a seller emphasizes a product's low price and set a price that equals or beats competitors' prices.
NON-PRICE COMPETITION: Based on factors other than price. It is used most effectively when a seller can make its product stand out through distinctive product QUALITY, CUSTOMER SERVICES, PROMOTION, PACKAGING, or other features.
DIFFERENTIATION: Is the process of DEVELOPING and PROMOTING differences between one's product and all similar products.
BUYERS' PERCEPTIONS OF PRICE
In setting PRICES, MANAGERS should consider the price sensitivity of the TARGET MARKET.
Management should be aware of consumers PRICE LIMITS and the products to which they apply. The firm also should take note of buyers perceptions of a given product in relations to competing products.
Before setting PRICES for a firm's PRODUCTS, MANAGEMENT must DETERMINE PRICING OBJECTIVES that are in line with ORGANIZATIONAL and MARKETING objectives.
A FIRM may have to PRICE its products to survive--either as an organization or as a player in a particular market.
Many firms may state that their goal is to maximize, but this goal is impossible to define.
Is the MAXIMIZE profit?
How does a firm know when it has been reached.
TARGET RETURN ON INVESTMENT
The RETURN on INVESTMENT (ROI) is the amount earned as a result of a financial investment. Some firms set an annual percentage ROI as a quantifiable means to gauge the success of their pricing goal.
A firm's MARKET SHARE is its proportion of total industry sales. Some firms attempt, through pricing, to maintain or increase their market shares.
In pricing their products, some firms are guided by a desire to maintain the status quo. This is especially true in industries that depend on price stability.
Once a firm has developed its pricing objectives it must select a pricing method to reach that goal. The second is awareness that cost and ex[ected sales can be used only to establish a PRICE FLOOR, the minimum price at which the firm can sell its product without incurring a loos. We look at three kinds of pricing methods: COST-BASED, DEMAND-BASED, AND COMPETITION-BASED pricing
Using the simplest method of pricing, COST-BASED PRICING the seller first determines the total cost of producing.
The amount a seller adds to the cost of a product to determine its basic selling price.
The number of units that must be sold for the total revenue
The total amount received from the sales of a product
A cost incurred no matter how many units of a product are produced or sold
A cost that depends on the number of units produced
The sum of the fixed cost and the variable costs attributed to a product.
DEMAND-BASED PRICING method called PRICE DIFFERENTIATION if it wants to use more than one PRICE in the MARKETING of a specific product.
Called DYNAMIC PRICING- Which raises prices during periods of high demand.
COMPETITION-BASED PRICING: An organization considers cost and revenue secondary to competitors prices. The importance of this method increases if competing products are similar and the organization is serving markets in which price is the crucial variable of the marketing strategy.