MKT 337 Chapter Notes - Chapter 11: Price Skimming, Product Differentiation, Brand Licensing
Document Summary
Product life cycle: describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline. Lack of profit is a result of large investment cots. Stimulate trial the initial purchase of a product by a consumer. These marketing objectives stimulate primary demand: the desire for the product class rather than for a specific brand, since there are few competitors with the same product. Once the product begins maturing, firms focus on selective demand, the preference for a specific brand. Gaining distribution can be a challenge, intermediaries may be hesitant to carry the new product, and the firm often restricts variation to ensure product quality. Can either be high (price skimming) or low (penetration pricing) A high initial price may be used as part of a skimming strategy to help a firm recover the costs of development as well as capitalize on the price insensitivity of early buyers.
