Marketing 3343 exam 3 anderson
Terms in this set (65)
a good, service, or idea
Good can be __________ or __________.
Non durabel ; Durable
A good that has to be purchased frequently. ex; gum, gas
A good that is meant to have a longer lifespan. ex; cars, house
the intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange money or something else of value.
are items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort. (Soft drinks, snacks, inexpensive items)
are items for which the consumer compares several alternatives on criteria such as price, quality, or style. (Restaurant meal, clothes, small appliances)
are items that the consumer makes a special effort to search out and buy. (Cars, houses, jewelry, vacations).
products are items that the consumer does not know about or knows about but does not initially want. (Insurance, medical procedures, root canal)
are products organizations buy that assist in providing other products for resale. Also called B2B products or industrial products.
are items that become part of the final product. These include raw materials such as grain or lumber, as well as assemblies or parts, such as a Ford car engine or car door hinges.
are items (e.g., installations, accessory equipment, supplies, industrial services) used to assist in producing other goods and services.
4 I's of service
-Intangibility (cannot be touched)
-Inseparability (consumed and delivered simultaneously)
-Inventoried (cant be held for inventory)
a specific product that has a unique brand, size, or price
a group of physical good or service items that are closely related because they satisfy a class of needs... ex; ipad air, ipad mini, ipad mini 2
consists of all of the product lines offered by an organization. ex; ipod, ipad, iphone
Industry where product belongs
Different shapes and types
Product Line Extension (of new product)
least amount of risk...involves an incremental improvement of an existing product. (Putting Cheerios into single-serve packages)
Significant jump in innovation (of new product)
going from a land line to a cell phone.
a truly revolutionary new product. (The personal computer, when it first hit the market...the iPad).
product life cycle stages
describes the stages a new product goes through in the marketplace:
Introduction stage of PLC strategies
Skimming strategy: help to recover cost of development
Penetration pricing: Offering low prices.
prompted by advertising and promotion
stimulate preference for a specific brand
Growth stage of PLC
-Rapid sales growth
Maturity stage of PLC
-Industry/Product sales slow
Decline stage of PLC
-Industry/Product sales drop
-Deletion: dropping a product from the product line
-Harvesting: retains the product but reduces marketing costs
any word, device (design, shape, sound,or color), or combination of these used to distinguish a seller's goods or services.
the added value a brand name gives to a product beyond the functional benefits provided.
-Multiproduct branding strategy(producing different products under one brand)
-Multibranding strategy(Proctor&Gamble makes tide, cheer, bold)
-Private branding (Sears has exclusive products that other stores dont)
Mixed branding strategy(One company makes two or more brands for same product)
the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service
: setting the highest initial price that customers really desiring the product are willing to pay
setting a low initial price on a new product to appeal immediately to the mass market
setting a high price to attract quality- and status-conscious consumers
Setting price to $49.99 vs. $50.00
manufacturers adjust composition and features to achieve desired price
two or more products in a single package. ex; Federal and State tax preparation, Mani-Pedi
charging different prices to maximize revenue by balancing supply and demand
Standard markup pricing
adding a fixed percentage to the cost of all items in a specific product class.
Cost-plus percentage-of-cost pricing
involves adding a fixed percentage to the total unit cost...often used on one-of-a-kind or few-of-a-kind items. Used most often when it is difficult or impossible to predetermine how much something will cost before it is produced.
Cost-plus fixed-fee pricing
occurs when a supplier is reimbursed for all costs, regardless of what they turn out to be, but is allowed only a fixed fee as profit that is independent of the final cost of the project.
Experience curve pricing
based on the learning effect, which holds that the unit cost of many products and services declines by 10 percent to 30 percent each time a firm's experience at producing and selling them doubles.
price elasticity of demand
the percentage change in quantity demanded relative to a percentage change in price.
a 1% increase in price produces more than a 1% decrease in quantity demanded. More horizontal line on graph
a 1% increase in price produces less than a 1% decrease in quantity demanded. More vertical line on graph
consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
Middleman: any intermediary between manufacturer and end-user markets
-Agent: an intermediary with legal authority to act on behalf of the manufacturer
-Wholesaler: an intermediary who sells to other intermediaries, usually to retailers
-Retailer: an intermediary who sells to consumers
Two types of channels of distribution
-Direct Channel performs all channel functions (i.e., no intermediaries)
-Indirect Channels include intermediaries
Vertical vs Traditional marketing systems
-Vertical: When a firm owns successive stages of production and distribution.
-Traditional: Each stage of distribution is separately owned. Produces the most conflict between the two
Contractual vertical marketing system
independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone.
a firm tries to place its products and services in as many outlets as possible. (Coca cola)
one retailer in a specific geographical area carries the firm's products. (Iphone when it was released to only be used by AT&T)
a few retailers in a specific geographical area to carry its products.
Organize the cost-effective flow of raw materials, in-process inventory, finished goods from point of origin to point of consumption to satisfy customer requirements
Supply Chain Management
the integration and organization of information and logistics activities across firms for the purpose of creating and delivering products and services that provide value to consumers.
is a contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchisee to operate a certain type of business under an established name and according to specific rules
Manufacturer-sponsored retail franchise systems
are prominent in the automobile industry, where a manufacturer such as Ford licenses dealers to sell its cars subject to various sales and service conditions.
Manufacturer-sponsored wholesale systems
exist in the soft-drink industry, where Pepsi-Cola licenses wholesalers (bottlers) that purchase concentrate from Pepsi-Cola and then carbonate, bottle, promote, and distribute its products to retailers and restaurants.
Service-sponsored retail franchise systems
are provided by firms that have designed a unique approach for performing a service and wish to profit by selling the franchise to others. Holiday Inn, Avis, and McDonald's represent this franchising approach.
Service-sponsored franchise systems
exist when franchisors license individuals or firms to dispense a service under a trade name and specific guidelines (e.g., H&R Block tax services).
system produces goods in advance of customer demand using a forecast of sales and moves them through supply chain to points of sale where they are stored as finished goods inventory.
system produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages.
Marketing channel intermediaries three functions
1. Transactional function- Buying, selling, risk taking
2. Logistical function- Assorting, storing, sorting, transporting
3. Facilitating function- Financing, grading, marketing info and research.
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