Innovation impacts the cost of production as well. Even the innovation helps in lowering the cost of production and making economies more efficient – producing more outputs with the same number of inputs. Technology affects market structure. In today’s market world, technology advances more rapidly because individuals gain incentives, in the form of profits, to discover new and cheaper ways of doing things. Even the dynamic efficiency refers to a market’s ability to promote cost-reducing or product-enhancing technological change.
• A differentiator gains a competitive advantage because it has the ability to satisfy customers’ needs in a way that its competitors cannot, which allows it to charge a premium price for its product. • Premium prices → increased revenue → superior profitability • A differentiator invests its resources to gain a competitive advantage from superior innovation, excellent quality, and responsiveness to customer needs • A product’s appeal to customers’ psychological desires is a source of differentiation. ▫ Example? 13 Differentiation • Generally, a differentiator chooses to divide its market into many segments and offer different products in each segment • A differentiated company concentrates on developing distinctive competencies in the functions that provide competitive advantage ▫ These are still expensive! • A differentiator must control its cost structure to ensure the price of its products does not exceed the price customers are willing to pay for them • When differentiation stems from the design or physical features of the product, differentiators are at great risk of being imitated ▫ Example?
There are two main profit maximization methods used, and they are Marginal Cost-Marginal Revenue Method and Total Cost-Total Revenue Method. Profit maximization is a good thing for a company, but can be a bad thing for consumers if the company starts to use cheaper products or decides to raise prices. This is what some firms in the leisure industry will aim to do, for instance, Cinemas will hope to achieve the highest level of profits. Although most firms in the leisure industry aim to maximise profit, some firms have other main objectives, such as to maximise growth. Growth maximisation is where the firm’s main goal is to increase the size of the firm as much as possible.
MKT 571 Week 4 Quiz Latest UOP Assignment 1. Which marketing system is another channel development in which two or more companies put together resources to exploit an emerging market opportunity? • Strategic marketing system • Vertical marketing system • Horizontal marketing system • Conventional marketing system 2. What is the practice that allows companies to maximize their market share by believing a higher sales volume will lead to lower unit costs and higher long-run profit while assuming the market price is sensitive? • Market-penetration pricing • Sensitive pricing • Target pricing • Market skimming To download the complete answer check MKT 571 Entire Course 3.
A portfolio analysis help a company with making decisions on what products that they must considered to be the main focused and which one they should get rid of. The portfolio analysis raises the issue of cash flow availability for use in expansion and growth for products in the organization. The BCG Matrix and the portfolio analysis would benefit a company to see where they stand with their products and where they should put more focus on to bring that particular product up in the market. Even though there are products that are doing well for the organization they can also become problems. The economy is going through some tough times now and it could be hard to keep the stars the stars and the cash cow the cash cows (Portfolio Analysis,
From 1974-1978 all the major firms saw increased sales and net income but as time progresses and the market stops growing the firms that have best positioned themselves will begin to dominate the competition. An indicator firm success can be found in looking at firm Return On Sales (ROS). ROS = Net Income/Sales Revenue, it is a measure of firm efficiency and firms with higher ROS are demonstrating an ability to control costs and/or charge a higher price for their product(s) as opposed to competition. Lower ROS firms have lower income in relation to revenue and increasing net income is harder. In 1978 Emerson (Beaird-Poulan) and Electrolux (Husqvarna) are the industry leaders in ROS at 7.9%.
Company G has prided itself on cultivating relationships with it's suppliers built on honesty, confidence, and allegiance in order to facilitate profits for both parties. However, as popularity may grow for the product so too may the market and suppliers might consider increasing costs, in which case a fixed contract would be discussed. Threat from Substitutes – If the Little Wonder does prosper their may be threats from substitutes from larger companies that are able to produce a similar product on an increased scale thereby reducing it's price and making it difficult for Company G to compete. SWOT Analysis A SWOT analysis has been done for Company G and the outcome is clearly positive. The details of that evaluation: STRENGTHS Dedication from management, employees, and suppliers 1.
A type A merger would increase market power which would increase market share. Increase in market share would increase profitability. A merger is also recommended because with Smithon’s positive income can offset with Johnson’s negative income and would result in reduced tax liabilities. A merger redefines the business world which allows for improve corporate business strategies and philosophies along with stronger alliances and less competition. There are many reasons for a merger but the most important is to maximize its profits.
The job of a salesperson ranges from order takers to order getters. Personal selling is the key to developing strong relationships because it is directed toward achieving mutually satisfying results between customer and seller, which will sustain and enhance future interactions this is very important because it is a lot cheaper to retain current customers than to attract new ones. However, “In a results-oriented environment, the foundation of many compensation systems, sales quotas can focus sellers and managers in a direction inconsistent with customer-oriented selling.”(“Evans”,
A justification of whether or not a push or pull strategy will be used was explained in detail. How the distribution strategy fits the product / service, target market, and overall marketing strategy for the company was also discussed. Introduction Global branding aids to improve boundaries by driving down unit costs through economies of scale associated by examining agencies, ad copies, and marketing messages. Brands streamline decisions for consumers, who are demanding, more skeptical; and face a wider array of choices in a progressively cluttered world. By maintaining a reliable and consistent brand image, Clear-Springs, Inc. reduces consumer confusion and reinforces the message in a cluttered market.