Mr. Dowrong grouped all potential customers into a small number of subsets. In doing so, he estimated the relative importance weights in the multi-attribute model and based his grouping on those estimated weights.
One of the strategies companies can use to defend their market from competitors; Protecting weakness by erecting outposts; For example, Smirnoff reacted to the low-priced competitor, Wolfschmidt, by increasing its price and advertising spending as well as introducing low-priced products such as Reltska and Popov.
One of the entry deterring strategies; Incumbents continue to introduce a slight variant of existing products to make it harder for potential entrants to find an empty spot in the attribute space; A good example is the cereal industry where dozens of cereals introduced by four major firms are occupying the attribute space almost fully
Mr. Potato head has been a monopolistic in a toy manufacturing business. he recently reduces his price by $2 from the monopoly price of $10. The reason is Mr. Potato head would like to reduce the threat of future entry by signaling to potential entrants that his marginal cost is low.
Humpty and Dumpty are two major companies in the diaper market, each of which maximizes its own profits. They are selling essentially identical diapers yet competing on price. Both diapers are sold at $5, which is slightly higher than their marginal cost. Both companies can be better off, if Humpty and Dumpty simultaneously increase their price from $5 to $6 (or even higher). However, neither Humpty nor Dumpty even tries to charge a higher price than the current $5.
Humpty is a start-up diaper manufacturer. During the first two months of its business, Humpty has enjoyed huge cost savings. More specifically, Humpty’s second-month production costs are much smaller than its first-month figures, even though the number of diapers manufactured per month is exactly the same. Humpty identifies that its workers’ productivity has improved so that no overtime charges happened in the second month
Economies of Experience
Ms. Mathlady is going over a metric for each of her customers, which is computed by the discounted gross margin earned from the customer, net of per-period maintenance/retention and up-front acquisition costs. By using this metric, she is able to identify more valuable customers in her customer pool.
Customer Lifetime Value or CLTV
Mr. Stayalone has been playing an online game, WOW, since 2009. This year he is playing WOW at least 12 hours a day, while last year he spent only one hour per day playing it. The main reason is that his benefit/utility of playing WOW increases a lot since the number of online players in 2010 becomes twice as large as that in 2009.
Hubba-Bubba is a start-up company that recently developed and introduced a chewing gum. When Hubba-Bubba attempted to place its brand new chewing gum brand on Walmart’s shelves, Walmart asked Hubba-Bubba to pay $100,000.
McDonald’s has a number of related food products in its product line such as sandwiches, fries, and sodas. As a result, McDonald’s tries to maximize the profits of these products all together, not the profits of a single product.
Category Profit Maximization
Nepressso is selling a variety of one-touch coffee makers ranging from Essenza to Latisima. This company is also selling 12 different kinds of coffees contained in a small cup. What is interesting from a marketing perspective is that consumers have to buy not only a coffee maker but coffees from the same company because T-cups are compatible with only the Nepresso coffee makers
Catalina Marketing has been selling a system that uses scanner-based technology to retrieve the purchase history of al consumers. Grocery stores using this system are thereby able to offer personalized prices to their consumers. That is, Price of the identical grocery item can vary from one consumer to another.
Direct price discrimination
Brande Managers must periodically review the line for deadwood that is depressing profits. For example, in 1999 Unilever announced it path to growth program designed to get the most value from its brand portfolio by eliminating three quarters of its 1600 distinct brands by 2003
Product Line Pruning
When ford set a base price for its first sport car, mustang, ford initiated the pricing process by researching what consumers want and how much they are willing to pay. Marketing research clearly showed that nobody at the time was selling excitement at a price most consumers could afford. Less than 2,500 based on this finding, mustangs price was set at 2,368 which was far less than that of other sports car on the market.
Value Consumer Based Pricing
One of the strategies companies can use to defend their market from competitors stretching their domain over new territories by market broadening or market diversification
One time payment manufactures make ti retailers for product placement on shelf
compute unit cost then added his desired marginal cost why will he over cost if lemonade not desirable
price goes up then demand goes down number of units goes down unit price goes up
improvement of cost efficiency due to cost interrelationship between different businesses
economies of scope
Mrs. dowrong plotted all brands in the beer market two-dimensional attribute space
Many products are competing one another. however, each product has some level of monopolistic pricing power mainly due to differention across products
one of the dynamic pricing strategies mostly common to the pricing of durables price initially starts high then decreases
alignment of marketing strategies in order to improve sales from a particular group of consumers
alignment of business processes and maketing strategies in order to improve customer retention and eventually firm profit
mr. doright grouped all potential customers into a small number of subsets, in doing so he estimated the relative importance weighs in the multi-attribute model and based his grouping on those estimated weights
Discounted gross margin earned from the customer, net of per-period maintenance and up from acquisition costs
Customer Lifetime Value
JCpenny recently launched the “Beware of the Doghouse” campaign. This is one of the first campaigns that use the new facebook connect application the main objective is to increase brand awareness or product sales through preexisting social networks
a form of task specific advertising. the main objective is to keep the consumers thinking about about a brand by repeating exposure
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