1. CHAPTER 5: PRODUCT AND PRICE DECISIONS-SPORTS

2. I. PRODUCT DEFINED A PRODUCT CAN BE TANGIBLE (BASEBALL BAT-GOOD) OR INTANGIBLE (WATCHING A SPORTING EVENT-SERVICE)

3. A. PRODUCT LINE VS. PRODUCT ITEM ITEM-SPECIFIC MODEL-NIKE SHOE LINE-CLOSELY RELATED PRODUCTS SOLD BY A COMPANY –NIKE HAS 3: -ATHLETIC CLOTHING -ATHLETIC FOOTWEAR -ATHLETIC EQUIPMENT

4. B. PRODUCT CLASSIFICATIONS- CONSUMER VS. BUSINESS GOODS

5. C. POINT OF DIFFERENCE- UNIQUE PRODUCT CHARACTERISTIC THAT MAKES A PRODUCT STAND OUT AGAINST OTHERS. (BASEBALL TEAM THAT WON WORLD SERIES, NIKE W/ IPOD)

6. II. STEPS IN NEW PRODUCT DEVELOPMENT TYPICALLY 7 STEPS IN DEVELOPING A NEW PRODUCT:

7. A. STEP 1- SWOT ANALYSIS -STRENGTHS -WEAKNESSES -OPPORTUNITIES -THREATS

8. B. IDEA GENERATION- THESE CAN COME FROM A VARIETY OF SOURCES: -RESEARCH -EMPLOYERS -CONSUMERS -COMPETITORS

9. C. SCREENING & EVALUATION- CAN THE COMPANY ACTUALLY MAKE AND SELL THE PRODUCT? FOCUS GROUPS

10. D. BUSINESS ANALYSIS- FINANCIAL ASPECT-BUSINESS PLAN

11. E. DEVELOPMENT- MAKING THE ACTUAL PRODUCT OR A PROTOTYPE OF THE PRODUCT

12. F. TEST MARKETING- OFFERING THE PRODUCT FOR SALE IN SMALL AREAS OR POSSIBLY FREE SAMPLES TO CONSUMERS MOVIES

13. G. COMMERCIALIZATION- USE OF 5 P ’ S AND MARKETING TO TARGET CONSUMERS http://www.youtube.com/watch?v=xffOCZYX6F8 http://www.youtube.com/watch?v=6CbQOLqZ8IA

14. III. PRODUCT LIFE CYCLE THIS REPRESENTS THE STAGES THAT A PRODUCT GOES THROUGH DURING ITS LIFE IN THE MARKETPLACE. THERE ARE 5 STAGES:

16. A. INTRODUCTION- FIRST INTRODUCED- MOST $ IS SPENT IN THIS STAGE FOR MARKETING AND ADV. CONSUMERS MUST BE EDUCATED (GATORADE)

17. B. GROWTH- COMPETITORS BEGIN ENTERING THE MARKET IF PRODUCT IS SUCCESSFUL-POWERADE DISTRIBUTION BECOMES GREATER

18. C. MATURITY- SALES BEGIN TO SLOW DOWN AND CHANGES MAY BE MADE TO A PRODUCT TO KEEP IT IN CIRCULATION

19. D. RENEWAL- PRODUCT IS ABLE TO SAVE OR RE-INVENT

20. E. DECLINE- PROFITS BEGIN TO DROP AND PRODUCT MAY BE DROPPED TOTALLY

21. IV. MANAGEMENT OF THE PRODUCT LIFE CYCLE PRODUCT MANAGERS NEED TO MANAGE A PRODUCT THROUGH ITS LIFE CYCLE. THIS IS DONE IN THREE WAYS:

22. A. PRODUCT MODIFICATON- CHANGING CHARACTERISTICS, FEATURES AND/OR APPEARANCE. GATORADE OFFERED-FIERCE, FROST, ICE, XTREMO

23. B. MARKET MODIFICATION- FINDING NEW WAYS TO FIND NEW CUSTOMERS OR ENCOURAGE CURRENT CUSTOMERS TO BUY MORE

24. C. REPOSITIONING- CHANGING A PRODUCTS IMAGE IN RELATION TO COMPETITION. NEW BALANCE MARKETING TO PODIATRISTS

25. V. PRICING HOW MUCH WILL SOMEONE PAY FOR SOMETHING? THAT IS THE MILLION DOLLAR QUESTION!!!

26. A. PRICING AND PROFIT- PRICE MUST BE SET TO MAKE A PROFIT AND COVER OVERHEAD

27. B. PRICING AND THE MARKETING MIX PRICE MUST BE SET FOR THE CORRECT TARGET MARKET. ROAD BIKES

28. VI. PRICING CONSIDERATIONS FIVE PRIMARY FACTORS AFFECT PRICING DECISIONS:

29. A. CONSUMER PERCEPTIONS- -PRESTIGE PRICING -ODD-EVEN PRICING -TARGET PRICING

30. B. DEMAND- SUPPLY VS. DEMAND

31. C. COST- MUST PRICE HIGH ENOUGH TO COVER COST TO MAKE PROFIT (COST-PLUS PRICING)

32. D. NEWNESS OF PRODUCT- PRICE MAY BE SET SUBSTANTIALLY HIGHER IN THE BEGINNING OF A PRODUCTS LIFE BUT LOWER THRU GROWTH AND DECLINE

33. E. COMPETITION THEY MAY LOWER OR RAISE THE PRICE TO COMPETE WITH COMPETITION.

34. VII. PRICING STRATEGIES BUNDLE PRICING-4 FOR 5.00 LOSS LEADER PRICING-AT OR BELOW COST TO GET CUSTOMERS IN (ILLEGAL) YIELD-MANAGEMENT PRICING-ITEMS AT DIFFERENT PRICES (STADIUMS) PRICE LINING-SELLING ALL GOODS IN A LINE AT SPECIFIC PRICE PTS.