Blog 10: The End

            Well here it is guys!  The semester is coming to a close and this will most likely be my final blog post.  Throughout this semester I have learned many things from this course that I did not know already.  We learned about the science behind pricing, the art of advertising, how companies sell different products to consumers using distribution channels, and many other interesting points.  Not only was the material taught helpful, but other aspects of the class improved many skills that will help me in the future.  These include the Ted Talk and ad presentations we had to give in front of the class.  The reason for these types of projects is that they improve public speaking and presentation skills.  In this day and age public speaking is a major selling point both in and out of business.  If one is not a good speaker or presenter they will most likely not be able to sell a product, which is an essential skill among marketers.  By presenting in front of the class it made us become more comfortable and learn how to prepare a detail summary of our video as they were timed.

            One of the chapters I found most interesting that we covered in the course was the Chapter on the Product Life Cycle.  As with many of the chapters, this chapter opened my eyes to something that I never really paid attention too before hand.  I never thought to myself that a product actually had a life cycle, to me the product was just there then all of a sudden the product was gone.  In reading this chapter I learned that the product life cycle is comprised of the introduction, growth, maturity, and decline stages and every product goes through these stages at some point.  Another reason why it caught my interest was that some of the products mentioned in the book were products from my childhood such as VHS tapes.  Ike I said before, at least to me, I always thought they just decided to stop making them and that was it.  But in reality there is a whole marketing concept behind how long a product stays on the market.

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            As for the project that I mentioned in a previous blog, we ended up not finishing too high in the standings but I still took out some valuable lessons from it.  I became better at working with others, which is essential in the real world in many occupations.  And I also learned valuable marketing tips on why we ended up not doing so well; such as, spending too much on marketing, and not analyzing the competition good enough.  In my eyes if we did these things better we would have finished with a better profit and score.  However, everyone learns from their mistakes and in some ways it could be a good thing that we didn’t do well as we all learned valuable lessons.

            Overall, I found this course very valuable and interesting.  I found that it covered many aspects of marketing both through the textbook and through lectures and projects.  Although the workload can be high at times, the lessons an individual can take away from this course are worth the extra hard work.

Blog # 9 Marketing Channels

Marketing channels are the routes a product takes to get into consumers hands.  Or as our textbook states, it consists of individuals and firms involved in the process of making a product or service available for use.  These channels can be seen through different methods of intermediaries.  There are six types of marketing channels/ intermediaries and they are as follows:

Middleman- The middleman is the intermediary between the manufacturer and the end–user of a certain product. 

Agent or Broker- These individuals are intermediaries with legal authority to act on behalf of the manufacturer but do not take the ownership title to products.  An example of these can include real-estate agents.

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Wholesaler- Wholesalers are intermediaries who sell to other intermediaries.  An example of a wholesaler would be Costco

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Retailer- Is an intermediary who sells to consumers.  Retailers can include JC Penney and Sears.

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Distributor- This term can be used to define wholesalers but is also usually used to generally describe intermediaries who perform the actions of selling, maintaining inventories, and extending credit.

Dealer- A dealer can mean the same as a distributor, retailer, wholesaler, and so fourth.  We generally describe them with items such as automobiles, however they are also retailers.

Marketing channels consist of direct and indirect channels.  Direct channels are where the producers deal directly with consumers.  These can consist of insurance companies who sell directly to consumers.  Indirect channels are where intermediaries get involved between the producer and consumer.  An example of this would be a car dealership as they act as retailers for certain automobiles.  Another form of marketing channels is an electronic marketing channel.  These are channels that make products and services available electronically.  Sites such as Amazon and Orbitz are electronic marketing channels, Amazon selling books and Orbitz being a reservation service.

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A company can also use Multichannel marketing which is the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online.  This is not to be confused with Dual Distribution and arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product.

Marketing channels are the only ways products can get into the consumers hands.  Products must be sold and whether they go directly to consumers or through intermediaries, marketing channels are how those products or services reach their destination.  There is also lot of risk involved especially in indirect marketing channels.  This is because not only do the producers risk the product not selling well but so do the retailers and wholesalers.  They purchased the products from the producers; if those products don’t sell they too will be out of profit.  However even though it is risky it allows certain products to sell better from multiple places.  If a product is sold through different retailers and wholesalers it gives the consumers more way to buy the products, which can ultimately lead to higher profits especially for newer goods.

All definitions were found in the Kerin, Hartley, Rudelius, Marketing textbook

Blog Post 8: Marketing Simulation Game

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Hey guys!  So throughout this blog I have mentioned different projects that we have completed in class that have helped me better understand the concept of marketing.  One of those projects is the McGraw Hill Practice Marketing simulation.  This simulation is conducted by forming teams and working together to create a certain product.  The products the groups in our class created were backpacks.  The simulation allows each group to create the backpack starting essentially from scratch by choosing the material, the features and so on and essentially forming a company.   Below is a picture of the backpack created by my team; CityPack

ProductàAs with any product that a business creates they must choose a target market for that product.  The simulation allows each group to pick a target market and switch that market at any time.  The simulation gives facts about each market so each group can tailor their backpack to the specific needs/wants of the market.  For example our target market was “university students.”  They desired a backpack that was durable and environmentally friendly, so we took this into consideration and made our backpack from hemp, which is an environmentally sustainable material.  We also incorporated a university logo on our backpack to grab the attention of the students.

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MarketingàIn the simulation it allows the groups to choose how they want to market their backpack.  Whether it is through social media, television, magazines, radio shows, and more, a team can choose which route they would like to take.  Different ways prove profitable for different groups so it was good to play around with it and see which method worked the best.  Teams could also choose how they sold their product.  Teams could choose between online retailers, discount stores, outdoor stores, again it was like the marketing methods because teams had to figure out what worked best for their product and which method brought in the most profit.

The Numbersà The most interesting application that I found within this simulation were the financial numbers.  I thought that this gave the simulation more realistic approach because most of our decisions were based off of these numbers.  We looked at our total revenue, profit, total sales, market share, etc in order to see what we needed to do.  For example in our first turn we would have made more money if we did not spend so much money on marketing.  The numbers allowed is to notice this and we changed the amount we spent on advertising.  To me this is the foundation of selling a product because a company wants to make the most money they can while keeping total costs as low as possible.  By looking at financial statements a company can make decisions to maximize profits

Overall I found the Practice Marketing simulation to be a very helpful tool in my understanding of marketing.  It gave me a more realistic approach to marketing and made us work together as a group.  In the real world on will most likely have to work with others so by doing projects like this it sets us up for conducting business in the future.  The simulation allowed us to utilize certain techniques we did in class and see how they would actually work in real time.  I found this simulation helpful and useful to my knowledge of marketing in business.

CP

Blog 7: The Science of Price

           As I was reading chapter 13 of my Marketing textbook I was intrigued at the art of pricing a product.  Price is such an important part of a product in my mind because it essentially can be the make or break factor for a customer.  The following blog explains the idea behind this important factor by outlining the chapter within my marketing textbook.

            First we will start out with the basics.  Price is the overall amount of money or considerations an individual must exchange to own the product.  The final price an individual must pay to own a product is computed in the following equation:

Final Price= (List Price)- (Incentives and Allowances)+(Extra Fees)

            In my mind, I always thought value was a mere word and that it fluctuated with each buyer, meaning different objects had different values to certain individuals.  In reality value is based off of the benefits to price ratio, which certain marketers use to create value pricing which is increasing value in products or services but maintaining or decreasing them in price.  Value can be computed with the following formula:

Value=Perceived Benefits/Price

            In order for a firm to set a price on a product they must consider many things such as profit and other associated factors.  When a company sets a price they go through a six-step process known as price in the marketing mix.  The steps are as follows:

1.     Identify pricing objectives and constraints

2.     Estimate demand and revenue

3.     Determine cost, volume, and profit relationships

4.     Select an approximate price level

A company’s objectives can vary depending on each firm.  Some objectives include profit, sales, market share, or social responsibilities.  All companies experience constraints such as demand, cost of production, and newness of the product.

A simple way to estimate demand for a product is through demand curves which relate the quantity of goods sold and the price at which said goods were sold for.  However economists also state that consumer tastes, availability, and consumer income can have a big impact on demand.  In order to estimate revenues companies utilize a revenue curve which is based off of total revenues which are found using the formula TR=PxQ or Unit price X quantity sold. 

Determining costs is a critical measure for any decisions based upon price.  The main costs that should be studied are total cost (TC), Fixed Cost (FC), Unit variable cost (UVC) and marginal cost (MC).

·       Total cost is the total expense a firm incurs whiling producing an item and is found by doing the following calculation: TC= FC+VC

·       Fixed Costs are expenses that do not change throughout the production of a product whereas variable costs are costs that can change.

·       Unit variable cost is variable cost except calculate don a per unit basis: UVC= VC/Q

·       Marginal cost is the change in total cost that results from producing one additional unit of a product or MC= Change in TC/1 unit increase in Q.

One calculation that I was recently introduced to was the break-even point formula.  We had to do this in our market simulations in order to determine the quantity in which to sell at where our total revenues equal total costs meaning the least we can sell without losing money.  This is found by doing the formula BEPQuantity= FC/P-UVC.

            Once all of these steps are completed we can at last determine a price for the product.  The reason this process is so extensive is that price truly is a major factor of marketing and can ultimately determine a products success rate, which will then reflect the success rate of a company.  In order for a company’s product to be successful for both consumers and the business it must be set at the right price.

The information above is an outline of Ch.13 in Marketing by Roger A. Kerin, Steven W. Hartley and William Rudelius, the 11^th Edition