Marketing 305 - Chapter 10
Terms in this set (29)
-A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value.
-The intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange money or something else of value.
-Has tangible attributes that a consumer's five senses can perceive.
-A good also may have intangible attributes consisting of its delivery or warranties and embody more abstract concepts, such as becoming healthier or wealthier.
-Goods can also be divided into nondurable goods and durable goods.
-An item consumed in one or a few uses, such as food products and fuel.
-Nondurable goods, such as Wrigley's gum, rely heavily on consumer advertising.
-A good that usually lasts over many uses, such as appliances, cars, and smartphones.
-Costly durable goods, such as cars, generally emphasize personal selling.
-A thought that leads to a product or action, such as a concept for a new invention or getting people out to vote.
-2 broad categories of products wisely used in marketing relate to they type of user: Consumer Products or Business Products
-Some products can be considered both consumer and business items (iMac computers)
-Each classification results in different marketing actions.
-Products purchased by the ultimate consumer
-4 types of consumer products differ in terms of:
~the effort the consumer spends on the decision
~the attributes used in making the purchase decision
~the frequency of purchase
-The 4 Types of Consumer Products:
1) Convenience Products
2) Shopping Products
3) Specialty Products
4) Unsought Products
-Items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort.
-Examples include toothpaste, milk, hand soap, ATM cash withdrawal, cake mix
-Items for which the consumer compares several alternatives on criteria, such as price, quality, or style.
-Examples include cameras, TVs, briefcases, airline tickets, earrings
-Items that a consumer makes a special effort to search out and buy.
-Examples include engagement ring, Rolls-Royce cars, Rolex watches, heart surgery
-Items that the consumer either does not know about or knows about but does not initially want.
-Examples include burial insurance, life insurance in your 20's or 30's, thesaurus
-Products organizations buy that assist in providing other products for resale. Also called B2B products or industrial products.
-Types of business products include:
~Support Products (Installations, Supplies, Accessory Equipment, Industrial Services)
-A major characteristic of business products is that their sales are often the result of derived demand; that is, sales of business products frequently result (or are derived) from the sale of consumer products.
-Ex.: As consumer demand for Ford cars (a consumer product) increases, the company may increase its demand for paint spraying equipment (a business product).
-Ex.: If Ford sales decrease, Michelin tire sales decrease as a result.
-Business products can be classified as components or support products.
-Components are items that become part of the final product.
-These include raw materials such as lumber, as well as assemblies such as a Ford car engine.
-Items used to assist in producing other products and services. These include:
1) Installations, such as buildings and fixed equipment
2) Accessory Equipment, such as tools and office equipment
3) Supplies, such as stationery, paper clips, and brooms
4) Industrial Services, such as maintenance, repair, and legal services.
-Most organizations offer a range of products and services to consumers.
-Each set of offerings can be categorized according to the product class or industry to which they belong, like the iPad, which is classified as a tablet device.
-Products can exist in various product forms within a product class.
-A specific product that has a unique brand, size, or price.
-Ex.: Ultra Downy softener for clothes comes in different forms (liquid for the washer and sheets for the dryer) and load sizes (40, 60, etc.).
-Each of the different product items represents a separate stock keeping unit (SKU), which is a unique identification number that defines an item for ordering or inventory purposes.
-A group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range.
-Exs.: Nike's product lines include shoes and clothing, whereas the Mayo Clinic's service lines consist of inpatient hospital care and outpatient physician services.
-Each product line has its own marketing strategy.
-Consists of all of the product lines offered by an organization.
-Ex.: Procter & Gamble has a large product mix that that includes product lines such as beauty and grooming (Crest toothpaste and Gillette razors) and household care (Downy fabric softener, Tide detergent, and Pampers diapers).
-"Multiple lines make up your mix."
The God Complex
-Thinking your solution is the only right one in solving very complex problems.
-Thinking you know everything and can create the best product, and can lead you down the wrong path.
-Consumers don't need to learn new behaviors.
-Ex.: Extra features in Colgate toothpaste ("whitens teeth") do not require buyer to learn new tooth-brushing behaviors, so it is a continuous innovation.
-The benefit of this simple innovation is that effective marketing mainly depends on generating awareness, not re-educating customers.
Dynamically Continuous Innovation
-Only minor changes in behavior are required.
-Ex.: Heinz launched its EZ Squirt Ketchup in an array of unlikely hues (green, orange, pink, teal, and so on) with kid-friendly squeeze bottles and nozzles. Encouraging kids to write their names on hot dogs or draw dinosaurs on burgers as they use the new product requires only minor behavioral changes.
-So the marketing strategy here is to educate prospective buyers on the product's benefits, advantages, and proper use.
-Involves making the consumer learn entirely new consumption patterns to use the product.
-So marketing efforts usually involve not only gaining initial consumer awareness but also educating consumers on both the benefits and proper use of the innovative product, activities that can cost millions of dollars.
Newness in Legal Terms
-The Federal Trade Commission (FTC) advises that the tern new be limited to use with a product up to six months after it enters regular distribution.
-The difficulty with this suggestion is in the interpretation of the term "regular distribution".
Product Line Extension
-The lowest level, usually with the least risk, of newness and innovation.
-An incremental improvement of an existing product line the company already sells.
Jump In Innovation
-A significant jump in innovation or technology, such as when a manufacturer offers new smartphones or digital cameras.
-The level just above product line extension.
-Using an existing brand name to introduce a new product into an unfamiliar market.
-Involves putting an established brand name on a new product in an unfamiliar market.
-The third highest level of risk