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4.2 Marketing

Marketing functions vary widely depending on the industry and company. In general, the department drums up interest in the company’s products or services through a mix of activities. These can include advertising, public relations and good old-fashioned salesmanship.

Your Marketing Department is concerned with the remaining P’s (beyond R&D’s product): price, place and promotion. Your Marketing Department is also in charge of sales forecasting.

4.2.1 Pricing Sensors

Price was discussed in 3.1.2. To review, appeal falls to zero when prices go $5.00 above or below the expected price range. Price drives the product’s contribution to profit margin. Dropping the price increases appeal but reduces profit per unit.

Segment price ranges fall at a rate of $0.50 per year. For example, if in Round 0, Traditional customers expect a price between $20.00 and $30.00, then in Round 1, the Traditional price range will be $19.50-$29.50; Round 2, $19.00-$29.00, etc. This puts pressure on companies to improve their cost structures.

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