Share
Explore BrainMass

Marketing - Product Positioning, Napster's Pricing,

Marketing - Product Positioning, Napster's Pricing, XM Differentiation. See attached file for full problem description.

Attachments

Solution Preview

STEP 1. What is product positioning? Consider the attributes of each of the following products and identify the brands' relative positioning in their product categories:

a. Volvo
Safe, Premium cars.
b. Hampton Inn
Luxurious, Attractive locations.
c. Dom Perignon champagne
Weightless, nutty and fruity.
d. Avis Rent-a-car
Easy to book, online booking.
e. Subway sandwiches

Fresh sandwiches and salads.

2. The St. Louis Cardinals baseball organization is owned by Anheuser-Busch, whSTEP 1. What is product positioning? Consider the attributes of each of the following products and identify the brands' relative positioning in their product categories:

a. Volvo
Safe, Premium cars.
b. Hampton Inn
Luxurious, Attractive locations.
c. Dom Perignon champagne
Weightless, nutty and fruity.
d. Avis Rent-a-car
Easy to book, online booking.
e. Subway sandwiches

Fresh sandwiches and salads.

2. The St. Louis Cardinals baseball organization is owned by Anheuser-Busch, which also operates Busch stadium, home of the Cardinals. Despite being located in a relatively small market, the cardinals have set attendance records. Much of this success is the result of effective services marketing at the ballpark, which makes attending games an enjoyable experience for fans, whether the cardinals win or lose.

a. What part of your experience at a baseball game is primarily intangible? What are you paying for when you go to a ballgame?
The open spaces around the stadium, the skyline and the variety of food and drink choices.
b. Consumers have difficulty separating the producer (the Cardinals and Busch stadium) from the consumption experience (which includes fan behavior, food vending, seats, or bleachers). Why would this be important for the management at Busch stadium to understand? In other words, can you go see a winning team play but not enjoy the game, or vice-versa?
This is important because the stadium is linked to the experience. And a great part of the experience is connected to the outcome of the game. If the consumer is a losing team fan and even if he is treated very well he will consider the experiences as linked with the Cardinals and hate the experience. He will feel that the excellent service is not good because the Cardinals are providing the service!
c. Busch stadium holds around 55,000 fans. What difference does it make that services are highly perishable? How would this influence sales promotion activity?
The differences are that the perishable services have to be sold off during the game. Otherwise the services will be an expense. Because of this the sales promotion strategy is to heavily discount slow selling perishables. For, example, those eatables that are not selling are immediately reduced to half the price with the objective of selling out the stock.

d. What aspects of the baseball game experience are susceptible to heterogeneity? What does this say about the importance of employing high-quality personnel?

Controlling unruly fans, parking experience, food available and seating arrangements:
These are some elements that may be different from stadium to stadium and so employing high-quality personnel positions the stadium in a favorable manner.
3. The promotion mix includes advertising, public relations, sales promotion, and personal selling. How would you classify each of the following promotion efforts?
a. McDonald's uses television to tell consumers about free French fries with the purchase of a big Mac. Advertising.
b. A Toyota salesperson tells customers about the quality of Michelin tires. Personal Selling.
c. CNN has a story about energizer's latest ad campaign. The story features a commercial with the energizer bunny. Public relations
d. Quaker oats places an ad in good housekeeping magazine with a coupon attached. Sales promotion.
e. A pharmaceutical salesperson leaves free samples with a physician. Sales promotion.

4. What type of pricing strategy does each of the following describe?
a. Hyundai prices its newest model lower than the price of competing brands. Penetration.
b. A premium men's shirt has a suggested retail price of $50 instead of $49.95. Premium
c. A doctor charges $65 for a routine office visit. Economy
d. A restaurant lowers the price of its corned beef and cabbage plate during the week before St. Patrick's Day.
Penetration;
e. For years the price of a candy bar was 5 cents, and rarely did a manufacturer charge more. Economy;
f. A supermarket prices its eggs, bread, and milk below cost. Loss leader.
f. An attorney advertises a $199 fee for a divorce. Penetration.

STEP 2
1. What factors seem to have the greatest influence on Napster 2.0's pricing decisions? Explain.
The price at which other online companies are selling the music, the price that most consumers are willing to pay for a single track and a low cost monthly subscription. This is a fast penetration strategy.

2. What appear to be Napster's primary pricing objectives?

Napster's primary pricing objectives are quick penetration, capturing of the market share and establishing itself as the leading online music company.
3. Assess the level of price competition in the music industry as a whole and within the online music distribution business specifically.
There is a strong level of pricing competition. This is clear from the policy of Napster to charge 99 cents for each song and 9.95 for an album. Every online company launched tried to outdo the other in the price of its products.
The essential reason why Napster was launched was to allow music lovers to download songs free of cost.. Moreover, the customers resented paying $13 to $18 per ...

Solution Summary

Marketing - Product Positioning is discussed in great detail in this solution.

$2.19