Chapter 11
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Created by:
amcretella on March 29, 2011
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Marketing Products, Services, and Brands
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49 terms
Terms | Definitions |
|---|---|
 Product Life Cycle | stages a new product goes through in the market place (introduction, growth, maturity, and decline) |
| Stage 1: Introduction | - objective is to gain awareness - few competition - one product - skimming or penetration pricing - promotion is inform, educate - place is limited |
| Stage 2: Growth | - objective is to stress differentiation - more competition - more versions of product - price is set to gain market share, deal - promotion is to stress points of difference - more outlets for place |
| Stage 3: Maturity | - objective is to maintain brand loyalty - alot competition (many) - full product line - price is set to defend market share, profit - promotion is reminder oriented - maximum outlets for place |
| Stage 4: Decline | - objective is to maintain profitability (harvesting, deletion) * strategies are not objectives in this stage - reduced competition - products are best sellers - price is set to stay profitable - minimal promotion - fewer outlets for place |
| At what stage of the cycle do profits peak? | during the growth stage |
| At the end of which stage of the cycle do sales peak? | end of maturity |
| Primary Demand | desire for the product class rather than for a specific brand since there are few competitors with the same product |
| Selective Demand | demand for a specific brand |
| Skimming Price Strategy | high initial price used to help the firm recover the costs of development as well as take advantage of the price insensitivity of early buyers |
| Penetration Pricing Strategy | low price set to discourage competitive entry |
| Product Deletion | - dropping the product from the company's product line - most drastic strategy |
| Harvesting | when a company keeps the product but reduces marketing costs |
| Diffusion of Innovation | concept of when a product diffuses, or spreads, through the population |
| 5 Categories of Product Adopters | 1. Innovator 2. Early Adopter 3. Early Majority 4. Late Majority 5. Laggard |
| Innovator | - venturesome - higher educated - use multiple information sources |
| Early Adopter | - leaders in social setting - slightly above average education |
| Early Majority | - deliberate - many informal social contacts |
| Late Majority | - skeptical - below average social status |
| Laggard | - fear of debt - neighbors and friends are information sources |
| Who needs to purchase a new product in order for it to be successful? | innovators and early adopters |
| What factors impact the rate of consumer adoption of a new product? | - usage barriers - value barriers - risk barriers - psychological barriers |
| Tools to Overcome Barriers to Product Adoption | provide: - warranties - money-back gaurantees - extensive usage instructions - demonstrations - free samples |
| 3 Ways to Manage a Product Through its Life Cycle | 1. Modifying the Product 2. Modifying the Market 3. Repositioning the Product |
| Product Modification | involves altering a product's characteristic, such as its quality, performance, or appearance to try to increase and extend the product's sales Ex) new features, packages, or scents give the sense of a revised product |
| Market Modification | company tries to find new customers, increase a product's use among existing customers, or create new use situations |
| Product Repositioning | - changing the place a product occupies in a consumer's mind relative to competitive products - considered when a firm is attempting to increase sales |
| 4 Factors that Trigger Repositioning | 1. Reacting to a competitor's position 2. Reaching a new market 3. Catching a rising trend 4. Changing the value offered |
| Branding | organization's use of a name, phrase, design, symbol, or combination of these to identify and distinguish its products |
| Brand Name | any word, device (design, shape, sound, or color), or combination of these used to distinguish a seller's goods or services |
| Brand Personality | - set of human characteristics associated with a brand name - research shows that consumers often assign ___________ traits to products and choose brands that are consistent with their own or desired self-image |
| Brand Equity | - added value a given brand name gives to a product beyond the functional benefits provided - provides a competitive advantage, and consumers are often willing to pay a higher price for a product with _____ ______. |
| 5 Common Criteria for Selecting a Good Brand Name | 1. Should suggest the product benefits 2. Should be memorable, distinctive, and positive 3. Should fit the company or product image 4. Should have no legal or regulatory restrictions 5. Should be simple |
| 4 Branding Strategies | 1. Multiproduct Branding 2. Multibranding 3. Private Branding 4. Mixed Branding |
| Two Different Names for Multiproduct Branding | 1. Family Branding 2. Corporate Branding |
| Multiproduct Branding | manufacturer's branding strategy that uses one name for all products |
| Example of Multiproduct Branding | Toro makes: - Toro snowblowers - Toro lawn mowers - Toro garden hoses |
| Multibranding | - manufacturer's branding strategy that gives each product a distinct name - useful when each brand is intended for a different market segment |
| Example of Multibranding | Procter & Gamble makes: - Tide - Cheer - Bold |
| Two Different Names for Private Branding | 1. Private Labeling 2. Reseller Branding |
| Private Branding | used when a company manufactures products but sells them under the brand name of a wholesaler or retailer |
| Example of Private Branding | Sears has: - Kenmore appliances - Craftsman tools - Die Hard batteries |
| Mixed Branding | - compromise between manufacturer and private branding - where a firm markets products under its own name and that of a reseller because the segment attracted to the reseller is different from their own market |
| Example of Mixed Branding | Michelin makes: - Michelin tires - Sears tires Epson makes: - Epson printers - IBM printers |
| Product Line Extension | practice of using a current brand name to enter a new market segment in its product class |
| Sub-branding | combines a corporate or family brand with a new brand |
| Brand Extension | practice of using a current brand name to enter a completely different product class |
| Capacity Management | integrating the service component of the marketing mix with efforts to influence consumer demand |
| Off-Peak Pricing | charging different prices during different times of the day or days of the week to reflect variations in demand for the service |
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