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Quiet Bell Work

Quiet Bell Work. Read “The Pet Hotel”, page 36 Answer questions List the 4 Ps, 2 Cs Skim chapter 2, note unfamilar terms Prepare to submit homework assignment (article). THE CONSUMER. The Consumer. A consumer is the person who uses the product.

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Quiet Bell Work

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  1. Quiet Bell Work • Read “The Pet Hotel”, page 36 • Answer questions • List the 4 Ps, 2 Cs • Skim chapter 2, note unfamilar terms • Prepare to submit homework assignment (article) BMI3C Unit 2

  2. THE CONSUMER

  3. The Consumer • A consumer is the person who uses the product. • A customer is the person who buys the product. • Wouldn’t this be the same person? Some examples when they are not? BMI3C Unit 2

  4. The Consumer • In the case of a parent or guardian of a child, the parent is considered a gatekeeper—a person who oversees the care of another. • Marketers attempt to appeal to the gatekeeper as well as the consumer. Why? BMI3C Unit 2

  5. Needs and Wants • self-actualization/fulfillment • esteem • belonging • safety • physiological BMI3C Unit 2 Maslow’s Heirarchy of Needs

  6. Needs and Wants • In our society, most people do not have difficulty satisfying needs. • Wants are items not necessary for survival, but add pleasure and comfort to our lives. BMI3C Unit 2

  7. Needs and Wants • Marketers need to make a clear distinction between needs and wants. • why? BMI3C Unit 2

  8. Needs and Wants • In places with poverty, war, or oppression basic needs may not be met. Marketing focuses on meeting needs. BMI3C Unit 2

  9. Needs and Wants • In developed countries, demand is more driven by wants. Marketing presents alternatives, and helps customers set up value equations for each. BMI3C Unit 2

  10. Consumer Demand • Consumer demand changes based on economic shifts and availability of new products. economy is stable economy is in a slump unemployment down unemployment up demand for goods and services UP people will buy things they want demand for goods & services DOWN people will only buy things they need BMI3C Unit 2

  11. Consumer Demand • Demand also changes based on wants, needs, or changes in perceived value. Marketers need to make decisions based on: • educated guess, research, historic trends BMI3C Unit 2

  12. Consumer Demand • Demand changes as retailers enter/exit the marketplace. • Too many sellers of a product =  demand • As some close, less product available =  demand BMI3C Unit 2

  13. Consumer Demand • Understanding fluctuations in consumer demand is essential to marketing. Because of this, marketers also use product life-cycle models to predict the life of new products. BMI3C Unit 2

  14. HOMEWORK • 1. Page 40 • Questions: 1. (b), (c) • 2. (b), (c) • 3. (a), (b) • 2. Read section 2.2 • Work on this quietly until the bell! BMI3C Unit 2

  15. BELL WORK • Read 2.2 • Show Mr. M yesterday’s homework BMI3C Unit 2

  16. Product Life Cycles

  17. Product Life Cycles • A PLC shows changes in consumer demand over time. • no product can be in demand forever • trends, technology and lifestyles change, affect consumer demand BMI3C Unit 2

  18. Product Life Cycles • The traditional PLC consists of five stages. maturity decline growth decision point introduction BMI3C Unit 2

  19. Product Life Cycles • Homework • In your notebook summarize the five steps of the traditional Product Life Cycle. BMI3C Unit 2

  20. Product Life Cycles • Introduction Stage • product is first introduced, “product launch” • initial price is high to help recover costs • costs include: • machinery, set-up, training, storage, promotion, packaging, research, etc. BMI3C Unit 2

  21. Product Life Cycles • Introduction Stage • Who buys? Curious people, those who want new things first: early adopters, or trendsetters BMI3C Unit 2

  22. Product Life Cycles • Introduction Stage • marketing: • informs the consumer about product • quickly establishes value equation BMI3C Unit 2

  23. Product Life Cycles • Introduction Stage • some businesses arrange consignment deals: allow retailer to return unsold product after a period of time • some manufacturers pay a shelf allowance for prime shelf space BMI3C Unit 2

  24. Product Life Cycles • Growth Stage • others start to buy product • reputation spreads • manufacturers advertise heavily BMI3C Unit 2

  25. Product Life Cycles • Growth Stage • starts where costs have been recovered, start making profit BMI3C Unit 2

  26. Product Life Cycles • Growth Stage • the faster a product reaches the growth stage, the sooner it makes profit • product may be scrapped if unsuccessful • if it is and it has lost money, it is called a bust BMI3C Unit 2

  27. Product Life Cycles • Growth Stage • first company to enter a market pays the most for R&D and advertising, but has no competition • as competitors enter, they fight for market share: percentage of the total market BMI3C Unit 2

  28. Product Life Cycles • Market Share Example Coca-Cola owns 47% of the market share (47/100) BMI3C Unit 2

  29. Product Life Cycles • Growth Stage • factors preventing companies from realizing profit are called barriers to entry • may include: small market size, cost of R&D, advertising, equipment... BMI3C Unit 2

  30. Product Life Cycles • Growth Stage • eventually only the most competitive products remain on the market How do you compete? BMI3C Unit 2

  31. Product Life Cycles • Growth Stage • a company may produce low-end products to establish minimum prices and validate expensive products • not sold under a well-known brand name (ie. Panasonic makes Techniks and Quasar) BMI3C Unit 2

  32. Product Life Cycles • Maturity Stage • The period when sales start to level off BMI3C Unit 2

  33. Product Life Cycles • Maturity Stage • marketers keep the brand name in front of consumers • success and longevity of the product is highlighted BMI3C Unit 2

  34. Product Life Cycles • Maturity Stage • since major costs have been recuperated and costs are low, products usually make large profits during this stage • company takes this profit to develop new products BMI3C Unit 2

  35. Product Life Cycles • Maturity Stage • EXAMPLES: • Sony took the money from producing Walkmans and put it into developing Discmans. • Disney took profits from its amusement parks to launch a cruise ship line. This also expands their brand name into a new market. BMI3C Unit 2

  36. Product Life Cycles • Decline Stage • company cannot find new consumers for their product • profits decrease; marketers try to find the reason for decline • if it is a temporary decline, it may be reversed by a small price change, or new ad BMI3C Unit 2

  37. Product Life Cycles • Decline Stage • other methods to reverse a decline: redesigning, reformulating, repackaging • may decide to remove the product from the market altogether BMI3C Unit 2

  38. Product Life Cycles • Decision Point Stage • the final stage of the PLC • marketers must make important decisions regarding a product’s future BMI3C Unit 2

  39. Product Life Cycles • Decision Point Stage • product may be reformulated, repackaged, and reintroduced • most often maintenance of a product involves new promotion and new pricing BMI3C Unit 2

  40. Product Life Cycles • Decision Point Stage • if there is little hope for more profit–due to market saturation, decreased demand, or otherwise–product may be abandoned BMI3C Unit 2

  41. Today’s Agenda • MITRW • Activity sheet • Note • A little friendly competition BMI3C Unit 2

  42. Nontraditional Product Life Cycles

  43. Nontraditional Product Life Cycles • In the textbook, read pages 46 to 49 and make a summary note on Fads, Trends, Niche Markets, and Seasonal Markets. Include in your notes the diagrams on page 46. • Think of additional examples for each type of life cycle. BMI3C Unit 2

  44. Nontraditional Product Life Cycles • Fads BMI3C Unit 2

  45. Nontraditional Product Life Cycles • Fads • A product which is extremely popular for a very brief period of time, and loses popularity just as quickly. Rubik’s cube, Cabbage Patch Kids, tamagotchi, Pet rock, “whatever”, “yadda yadda” BMI3C Unit 2

  46. Nontraditional Product Life Cycles • Fads • Fads are unpredictable, and high-risk. Companies try to get out of the market just as the fad peaks. If they wait too long, they get stuck with excess inventory. BMI3C Unit 2

  47. Nontraditional Product Life Cycles • Trends BMI3C Unit 2

  48. Nontraditional Product Life Cycles • Trends • A trend has a more lasting effect on the market than a fad. A trend is usually a movement towards a style of product. BMI3C Unit 2 Organic foods, Beanie babies, the Simpsons, cell phones

  49. Nontraditional Product Life Cycles • Niche Markets BMI3C Unit 2

  50. Nontraditional Product Life Cycles • Niche Markets • A small section of the market dominated by a small group of products. • Short growth, level maturity. BMI3C Unit 2 The Pet Hotel, The Cambridge Times, ethnic products

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