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34. Demand: level and structure. Methods of demand evaluation.

Each price will lead t a different level of D and will have a different impact on a Co’ marketing objectives. The relation between alternative prices and the resulting current D is captured in D curve. In the normal case D and P are inversely related: the higher the P, the lower the D. In case of prestige goods, D sometimes slopes upward. Some consumers take the higher P to signify a better product.

The D curve shows the market’s probable purchase quantity at alternative Ps. It sums the reactions of many individuals who have different P sensitivities. The 1st step in estimating D is to understand what affects P sensitivity. several factors: unique value effect (buyers are less price sensitive when the product is more distinctive), substitute-awareness effect, difficult-comparison effect (buyers are less PS when they cannot easily compare the quality of substitutes, price-quality effect (buyers are less PS when the product is assumed to have more quality, prestige, exclusiveness. Co needs to understand the PS of their customers and the trade-off people are willing to make between the price and product characteristics.

Most Co measure D curves:

1. Statistically analyzing past prices, quantities sold and other factors to estimate their relations.

2. Conduct price experiments (vary P of several products sold and observe the results).

3. Ask buyers to state how many units they would buy at different proposed P.

In measuring P – D relationship, market researcher must control various factors (4 Ps) that will influence D.

Marketers need to know how responsive or elastic D would be to a change in price. If a certain P increase leads to a relatively small decline in D, D is inelastic. If the same P increase leads to a substantial drop in D, D is elastic. D is likely to be; less elastic under following conditions: few or no substitutes or competitors, buyers are slow to change their buying habits and search for lower P, buyers think the higher P are justified by quality differences, normal inflation. If D is elastic sellers will consider lowering the P. P elasticity depends on the magnitude and direction of the price change. It may differ for a price cut versus a price increase. Long-run PE may differ from short-run elasticity. Buyers may continue to buy from their current supplier after a price increase, bc they do not notice the increase. Here, D is more elastic in the long-run than in the short-run. Reverse: buyers drop a supplier after being notified of P increase but return later.

35. Methods of attitudes measurement. Osgud scale, Likert scale.

Attitudes are measured because there is a close connection between the way a person think and behaves.

Osgood's semantic differential was designed to measure the connotative meaning of concepts. The respondent is asked to choose where his or her position lies, on a scale between two bipolar adjectives (for example: "Adequate-Inadequate", "Good-Evil" or "Valuable-Worthless").

Likert-type or frequency scales use fixed choice response formats and are designed to measure attitudes or opinions. These ordinal scales measure levels of agreement/disagreement. A Likert-type scale assumes that the strength/intensity of experience is linear, ex. strongly agree / agree / don’t know / disagree / strongly disagree

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