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Marketing Midterm 2
Terms in this set (155)
anything that is of value to a consumer and can be offered through a voluntary marketing exchange
what are the 3 levels of the total product concept?
core customer value
the basic problem solving benefits that consumers are seeking
two dimensions of quality
what are health care benefits sought?
care, caring, cure, comfort, convenience, quality
the physical attributes of a product including the brand name, features/design, quality level, and packaging
what are most easily copied about product?
involves taking apart a competitor's product to learn from it
separate department within organizations in between marketing and manufacturing; understand the realities of manufacturing and the marketing aspects of the situation
product design is optimizing the combination of:
the nonphysical attributes of the product including warranties, financing, product support, and after-sale service
what are the two primary categories of products and services that reflects who buys them?
products and services used by people for their personal use
products or services toward which the customer shows a strong preference and for which he or she will expend considerable effort to search for the best suppliers
what is the place strategy for specialty products/services?
must have special place that should reinforce everything that makes the product special
products or services for which consumers will spend a fair amount of time comparing alternatives, such as furniture, apparel, fragrances, appliances, and travel alternatives
what is the place strategy for shopping products/services?
near the competition
shopping products/services can either be:
1. homogeneous (price based)
2. heterogeneous (attribute based)
products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase
what is the place strategy for convenience products/services?
widest distribution possible
products or services consumers either do not normally think of buying or do not know about
what is the place strategy for unsought products/services?
need to go aggressively after customers
when new-to-world products are introduced to the market, what type of products are they?
what are 8 product forms?
8. an entire organization
how did people used to talk about quality?
the absence of defects
how did people talk about quality further down the line?
in terms of capabilities
how do people talk about quality now?
what POV really count with respect to quality?
every specific product a store carries; specific brand, size, everything
the complete set of all products offered by a firm
groups of associated items, such as those that consumers use together or think of as part of a group of similar products
looks at the concept of one or more products of one or more brands from the customers POV; consists of brands and products that are considered to be substitutes of each other
the excessive expansion of product lines
the product mix represents the _______ and _______ of the company's product lines
number of product lines offered by a firm
the number of categories within a product line
why do you increase depth?
to address changing customer preferences or preempt competitors while boosting sales
why do you decrease depth?
to eliminate unprofitable or low-margin items and refocus their marketing efforts on more profitable items
why do you increase breadth?
to capture new or evolving markets and increase sales
why do you decrease breadth?
to address changing market conditions or meet internal strategic priorities
cut back on some products so other products can do better; reduces revenue but can reduce costs more
what is a way for a firm to differentiate its product offering from those of its competitors?
the spoken component of branding
a strong brand name is more the _______ of effective marketing than the _______
advertising vs. product, price, and delivery
what you say about your brand vs. what you do for your customers under this brand name
visible aspects of the brand
logos and symbols
visual branding elements that stand for corporate names or trademarks
brand symbols that could be human, animal, or animated; gives personality to brand
short phrases used to describe the brand or persuade consumers about some characteristics of the brand
audio messages about the brand that are composed of words or distinctive music
anything about the brand that can be legally protected
why has branding become increasingly important?
1. concentration on current customers
2. summary of all beliefs and feelings
3. can be worth billions
why are brands valuable?
1. brands facilitate purchases
2. brands establish loyalty
3. brands protect from competition and price competition
4. brands are assets
5. brands affect market value
the set of assets and liabilities to a brand that add or subtract from the value
measures how many consumers in a market are familiar with the brand and what it stands for
how is brand awareness created?
through repeated exposures of the various brand elements
the relationship between a product's or service's benefits and its cost
the mental links that consumers make between a brand and its key product attributes
occurs when a consumer buys the same brand's product or service repeatedly over time rather than buying from multiple suppliers within the same category
brand loyalty has _______ in recent years
brands owned and managed by the manufacturer
retailer/store brands (private-label brands)
products developed by retailers
products that do not carry a company identity
brand names that other companies can buy the right to use
what is the battle of the brands a battle between?
battle for dominance between manufacturers and retailers
which types of brands are market share leaders?
manufacturer (national) brands
a firm's own corporate name used to brand its product lines and products
the use of individual brand names for each of a firm's products
the use of the same brand name for new products being introduced to the same or new markets
the use of the same brand name within the same product line and represents an increase in a product line's depth
occurs when a brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold
the practice of marketing two or more brands together, on the same package or promotion
a contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiated fee
brand repositioning (rebranding)
a strategy in which marketers change a brand's focus to target new markets or realign the brand's core emphasis with changing market preferences
tie a brand with an event
an important brand element that has more tangible or physical benefits than other brand elements have
the packaging the consumer uses, such as the toothpaste tube, from which he or she typically seeks convenience in terms of storage, use, and consumption
the wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners; can contain additional product information that may not be available on the primary package
Product packaging that has less of a negative impact on the environment.
provide information the consumer needs for his or her purchase decision and consumption of the product
what is the 2nd most common claim in ads? (after free)
new to the world
absolutely has never been done before and are completely new and different
product that is some way different and presumably better
additions to existing lines
product that is a new version of a product
new to company
already been introduced by competitors, but this particular company as their new version
when an existing product's cost has been reduced
when an organization tries to develop a new identity
most new products _______
what are the pressures for new products?
1. market saturation
2. new substitutions
3. changes in tastes, incomes
4. intensified competition
occurs when most consumers already own the product which will last them for a year or so before they need to replace it; only affects certain products
the _______ a product exists in a marketplace, the more likely it is that the market will become saturated
competitors will come out with new products so you need to introduce new products to compete with them; affects all products
the process by which ideas are transformed into new products and services that will help firms grow
new products can help manage _______ through _______
new products do not always target end consumers; sometimes they function to improve relationships with _______
diffusion of innovation
the process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters
new product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market
product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead
diffusion of innovation curve
generally follows a bell shaped curve
a few people buy at first, then more buy, then fewer people buy as the degree of diffusion slows
what 5 groups can purchasers be divided into from the diffusion of innovation curve?
2. early adopters
3. early majority
4. late majority
those buyers who want to be the first to have the new product or service
help gain market acceptance
the second group of consumers in the diffusion of innovation model, after innovators, to use a product or service innovation; generally don't like to take as much risk as innovators but instead wait and purchase the product after careful review
members don't like to take much risk and therefore tend to wait until bugs are worked out of a particular product or service; few new products and services can be profitable until this large group buys them
the last group of buyers to enter a new product market; when they do, the product has achieved its full market potential
the last group of buyers to enter a new product market; when they do, the product has achieved its full market potential
consumers who like to avoid change and rely on traditional products until they are no longer available
what are two observations on new products?
1. much more important to some organizations and industries than others
2. the product life cycle is becoming shorter
what are the stages of new product development?
1. generate ideas
2. evaluate ideas
3. conduct business analysis
4. develop product and marketing mix
5. test marketing
coming up with new product ideas
sources of new product ideas
watch their competition; reverse engineering
talking to customers
internal research and development (R&D)
many firms have their own R&D departments in which scientists and engineers work to develop new ideas
a group of firms and institutions, possibly including government and educational institutions, that explore new ideas or obtain solutions for developing new products.
a method used in developing new products in which a firm buys the rights to use a technology or idea from another firm
a group activity used to generate ideas
a practice in which the client firm hires an outside firm to facilitate some aspect of its business
most ideas generated will be eliminated
conduct business analysis
look at remaining ideas more closely
last stage before things start getting really expensive
the process in which a concept statement that describes a product or a service is presented to potential buyers or users to obtain their reactions
brief written description of a product or service; its technology, working principles, and forms; and what customer needs it would satisfy
product development (product design)
entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features or a service's features
prototype developed here
the first physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes, sometimes even crafted individually
prototypes are usually tested through _______ and _______ testing
an attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm's research and development (R&D) department
having potential consumers examine a product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use
a method of determining the success potential of a new product; it introduces the offering to a limited geographical area prior to a national launch
conducted before a product or service is brought to market to determine how many customers will try and then continue to use it
when the new product is brought to market with full-scale production, sales, and marketing support
the most crucial step in the new product introduction requires tremendous financial resources and extensive coordination of all aspects of the marketing mix
evaluation of results
analysis of the performance of the new product and making appropriate modifications
three interrelated factors firms can measure the success of a new product by:
1. its satisfaction of technical requirements
2. customer acceptance
3. its satisfaction of the firm's financial requirements
"back to the drawing board"
in practice, organizations will be in stage 2 or 3 and feel like they have to rework previous stages
not always one step at a time; may be working on multiple steps at once
accelerate the process
always trying to get new product out before competition can
people in the organization who really believe and see the potential in new products and prioritize it
what is the most commonly used model in marketing apart from the 4 P's?
the product life cycle
what are the stages of the product life cycle?
stage of the product life cycle when innovators start buying the product
stage of the product life cycle when the product gains acceptance, demand and sales increase, and competitors emerge in the product category
stage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them
stage of the product life cycle when sales decline and the product eventually exits the market
the product life cycle
defines the stages that new products move through as they enter, get established in, and ultimately leave the marketplace and thereby offers marketers a starting point for their strategy planning
sales are low, profit is negative, typical customers are innovators, competitors are one or few
trying to get it off the ground
a lot of investment to get things started
rising sales, rapidly rising profit, typical consumers are early adopters and early majority, competitors are few but increasing
what is the best period of the product life cycle?
the growth period
what are companies who started the business (pioneers) attitudes in the growth period?
we are the real deal, we started it
what are companies that came in attitudes in the growth period?
we didn't start it, but ours is better
what period do you build loyalty in?
the growth period
"the shakeout period"
as good as the growth period is, some companies will want to leave the market because they already got high profits and there will be more competition in the future
sales peak, profit peak to declining, typical customers are late majority, competitors are high in number
what is the longest period of the PLC?
what strategies to firms pursue during the maturity period to increase their customer base and/or defend their market share?
entry into new markets or market segments
development of new products
sales declining, profit declining, typical consumers are laggards, competitors are low
over the product life cycle...
customers become more knowledgeable
the shape of the PLC curve: theory vs. reality
in theory, bell shaped with regards to sales and profits
in reality, each product or service category has its own individual shape
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