Principles of marketing

1. Suppose that a firm attempts to achieve various types of pricing objectives for a certain brand in the target market. Given the profit equation as shown below, answer the following questions.

Profit = Total Revenue - Total Cost
= (# of product units sold * unit selling price) - (Fixed Cost + Variable Cost)
= (# of product units sold * unit selling price) - (Fixed Cost + # of product unit sold * unit variable cost)

1) Suppose that a firm sets the final retail price of the brand at a higher level in order to achieve one pricing objective of market share leadership. Discuss if it is an appropriate approach to achieve this intended pricing goal.

2) Discuss how the above profit equation is related to IMC strategy when attempting to achieve both goals of customer value (CV) and profit maximization. In other words, discuss in detail how the profit maximization pricing goal can be achieved by highlighting the customer value of the firm's brand using IMC strategy.

2. As discussed in Topic 1, marketers are interested in expanding primary and secondary demand of a certain item over the product life cycle. To expand both types of demand, they are likely to use Hierarchy of Effects Model as one of Models of Response Process. Regarding both types of subjects, answer the following questions.

1) Discuss what it means by the primary and secondary demand along with the ideas of how to increase both types of demand for a certain item.

2) In general, marketers attempt to increase primary and second demand with different emphasis over the product life cycle. Discuss which demand should be focused more at each stage of the product life cycle.

3) Suppose that retail store is launching one promotional campaign-i.e., Buy 5 items of 12-pack soda at $10.00; otherwise, its regular price is $3.50. Use the Hierarchy of Effects Model to explain why the retail store prepares this promotional program to increase both types of demands.

3. Designing an optimal distribution channel is a critical task for any firm in order to complete the exchange process between manufacturer and a group of target customers. Regarding this issue, answer the following questions.

1) Discuss why at least an intermediary such as retailer or wholesaler is needed between a manufacturer and a group of target customers.

2) Discuss why the internet technology (IT) has gotten rid of any offline retail stores as the intermediary between manufacturer and a group of target customers, called disintermediation phenomenon. Especially, discuss its necessity in terms of contact efficiency.

3) As discussed in the class, lots of new online business models have recently appeared as new variation of traditional value chain network (VCN). One example is eBay.com as an online auctioneer with the concept of market maker. Discuss how it modifies the traditional structure of the value chain network to maximize the customer value (CV).