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Terms in this set (78)
is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want
represent what the buyer is really buying.
represents the design, branding, and packaging that delivers the core benefit to the customer.
represents additional services or benefits of the actual product.
actual product consists of
augmented product consists of
-delivery and credit
-after sale service
are products and services for personal consumption
consumer product classifications
are consumer products and services that the customer usually buys frequently, immediately, and with a minimum of comparison and buying effort.
Toothpaste, laundry detergent
are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style. When buying shopping products and services, consumers spend much time and effort in gathering information and making comparisons.
are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. Buyers do not normally compare specialty products. They invest only the time needed to reach dealers carrying the wanted products.
are consumer products that the consumer either does not know about or knows about but does not normally think of buying. Most major innovations are unsought until the consumer becomes aware of them through advertising. Unsought products require a lot of advertising, personal selling, and other marketing efforts.
line is closely related products that:
Have similar functions and customer groups
Are sold through similar outlets or fall within given price ranges
product line length
the number of items in the product line.
Product line filling
Product line stretching
involves adding more items within the present range of the line.
reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors.
occurs when a company lengthens its product line beyond its current range. The company can stretch its line downward, upward, or both ways. A reason for downward product line stretching is to plug a market hole that would attract a potential competitor. The reason for upward product line stretching is to add prestige to the current product.
product mix/product portfolio
consists of all the product lines and items that a particular seller offers for sale.
product mix decisions
width, length, depth, consistency
Number of different product lines the company carries
Total number of items a company carries within its product lines
Number of versions offered for each product in the line
Relativity of the various product lines in end use, production requirements, distribution channels, or some other aspect
-is the name, term, sign, or design—or a combination of these—that identifies the maker or seller of a product or service
-represents the consumer's perceptions and feelings about a product and its performance. It is the company's promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers
is the total financial value of a brand
-refers to the intangible assets of added value or goodwill that results from the favorable image, impression, and consumer attachment to a company, brand name, or trademark.
-is the differential effect that the brand name has on customer response to the product and its marketing
occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category. Kleenex facial tissue with lotion.
extends a current brand name to new or modified products in a new category. Examples include Apple's watch
companies introduce additional brands in the same category. For example, Procter & Gamble markets many different brands in each of its product categories.
brand name is needed. Or it may create a new brand name when it enters a new product category for which none of the company's current brand names are appropriate (Scion)
downward product line stretching
used by companies at the upper end of the market to plug a market hole or respond to a competitor's attack (Honda fit)
upward product line stretching
is by companies at the lower end of the market to add prestige to their current products (McDonalds café)
combination product line stretching
is used by companies in the middle range of the market to achieve both goals of upward and downward line stretching (Hotels)
new product development strategy
Creating successful new products requires:
Understanding consumers, markets, and competitors
Developing products that deliver superior value to customers
stages in new product development process
concept development and testing
marketing strategy development
reasons for new product failure
-overestimation of market size
-price too high
-high development costs
stage at which the product and marketing program are introduced into more realistic marketing settings
-Provides the marketer with experience in testing the product and entire marketing program before full introduction
product life cycle
product life cycle strategies
is a basic and distinctive mode of expression. For example, styles appear in homes like colonial, ranch, transitional, clothing like formal and casual, and art like realist, surrealist, abstract. A style may last for generations, passing in and out of vogue.
is a currently accepted or popular style in a given field. For example, the more formal "business attire" look of corporate dress of the 1980s and 1990s gave way to the "business casual" look of the 2000s and 2010s. Fashions tend to grow slowly, remain popular for a while, and then decline slowly..
are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. A fad may be part of an otherwise normal life cycle. Or the fad may comprise a brand's or product's entire life cycle. Pet Rocks are a classic example
New competitors enter the market
Price stability or decline to increase volume
Promotion and manufacturing costs gain economies of scale
maturity stage modifying strategies
Marketing mix modifying
-, the company tries to increase the consumption of the current product. It may look for new users and new market segments. The manager may also look for ways to increase usage among present customers. The company might also try modifying the product—changing characteristics such as quality, features, style, or packaging to attract new users and to inspire more usage. It can improve the product's styling and attractiveness. It might improve the product's quality and performance—its durability, reliability, speed, taste.
Maintain the product
Harvest the product
Drop the product
PLC characteristics and objectives
is the amount of money charged for a product or service. It is the sum of all the values that consumers give up in order to gain the benefits of having or using a product or service.
-Determines a firm's market share and profitability
-is the only element in the marketing mix that produces revenue; all other elements represent costs
no profits below this price
no demand above this price
cost based pricing
-design a good product
-determine product costs
-set price based on cost
-convince buyers of products value
value based pricing
-assess customer needs and value perceptions
-set target price to math customer perceived value
-determine costs that can be incurred
-design product to deliver desired value at target price
customer value based pricing
-Based on buyers' perceptions of value rather than on the seller's cost
-Price is considered before the marketing program is set.
two types of value basing
good value based pricing
offers just the right combination of quality and good service at a fair price. This involves introducing less expensive versions of established, brand name products. It also involves redesigning existing brands to offer more quality for a given price or the same quality for less (covered earlier).
In many cases good-value pricing includes less expensive items
value added pricing
refers to attaching value-added features and services to differentiate a company's offers and charging higher prices. For example, even as frugal consumer spending habits linger, some movie theater chains are adding amenities and charging more rather than cutting services to maintain lower admission prices.
every day low pricing (EDLP)
involves charging a constant everyday low price with few or no temporary price discounts
high low pricing
involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items
customer perceptions of value
set the upper limit for prices, and costs set the lower limit
price elasticity of demand
illustrates the response of demand to a change in price
occurs when demand hardly changes when there is a small change in price
occurs when demand changes greatly for a small change in price
-shows the number of units the market will buy in a given period at different prices
-Normally, demand and price are inversely related
Higher price = lower demand
For prestige (luxury) goods, higher price can equal higher demand when consumers perceive higher prices as higher quality
"Targeting only price-sensitive is leaving money on the table"
market skimming pricing
-Setting a high price to skim maximum revenues layer by layer from the segments willing to pay the high price
-Company makes fewer but more profitable sales
market penetrating pricing
-Setting a low price to attract a large number of buyers and a large market share
market skimming pricing only works under certain conditions
First, the product's quality and brand image must support its higher price, and enough buyers must want the product at that price. Second, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more. Finally, competitors should not be able to enter the market easily and undercut the high price.
market penetrating pricing only works under certain conditions
First, the market must be highly price sensitive so that a low price produces more market growth. Second, production and distribution costs must decrease as sales volume increases. Finally, the low price must help keep out the competition, and the penetration pricer must maintain its low-price position. Otherwise, the price advantage may be only temporary.
-Adjusting prices continually to meet the characteristics and needs of individual customers and situations
-Prevalent online where Internet introduces fluid pricing
If a company learns that a competitor has cut its price and decides that this price cut is likely to harm its sales and profits, it might make any of the following four responses:
It could reduce its price to match the competitor's price.
It could maintain its price but raise the perceived value of its offer.
It could improve quality and increase price, moving its brand into a higher price-value position.
Finally, the company could launch a low-price fighter brand—adding a lower-price item to the line or creating a separate lower-price brand.
assessing and responding to competitor price changes
- the tendency to heavily rely on the first piece of information offered when making decisions
-selling enough to just cover fixed costs.
Unit Breakeven is unit sales required to cover fixed costs
Revenue Breakeven is sales revenue required to cover fixed cost
discount and allowance pricing
reducing prices to award customer responses such as paying early or promoting the product
adjusting prices to allow for differences in customers, products, or locations
adjusting prices for psychological effect
temporarily reducing prices to spur short run sales
adjust prices to account for the geographic location of customers
adjust prices for international markets
is the characteristic that a service has which renders it impossible to divorce the supply or production of the service from its consumption.
Low price are offered for the core product, but high prices are placed on captive products. This attracts customers to the core product with a low price but allows sellers to make a profit off the captive products, which are necessary to use the product.
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