Marketing Exam 3

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What is a product?
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Terms in this set (62)
How are services different from goods?intangible, inseparable, variable, perishableHow do the service characteristics affect marketing?perishability - must estimate demand; must offer remedy instead of return inseparability - quality can't be controlled so satisfaction is often lowered intangibility - when there's no real transfer of ownership, relationships become much more important variability - harder to assess quality and can't be mass producedWhat are the 5 stages of the product life cycle?development, introduction, growth, maturity, declineWhat are the typical product life cycles for styles, fashions, and fads?they go through the cycle and then keep starting back overWhat are the roles of experts and consumers over the new product development process?consumers are good for validating/testing discontinuous innovations while experts are the ones coming up with those innovationsWhat kind of innovation is a consumer likely to come up with?continuous innovationWho makes the innovations that lead to discontinuous new products?experts in the fieldWhat is a minimally viable product?A product with just enough features to satisfy early customers, and to provide feedback for future developmentWhat is necessary to develop successful products over and over again?formalized NPD process; expertise in the areaWhat are the stages of the NPD process?conceptualization, planning, and commercializationWhat is a brand?name or symbol that identifies a specific business's product/serviceWhere does the idea of branding stem from and what is the point of branding (i.e., what does it do for a company)?from branding a cow; to endow products w the power of a brandWhat is brand image?collection of associations, thoughts and feelings, that are evoked when exposed to a brandWhat is brand equity?the power of a brand or its financial valueWhat is a brand mark?the part of a brand that is not made up of words, such as a symbol or designWhat does the Pespi Taste Challenge, Oldsmobile and Howard Johnsons, and Chevrolet, Levis, and Coca-Cola tell us about creating a powerful brand?a powerful brand must be consistent w its messagingWhy does brand awareness matter?familiarity fosters liking; must get people aware of a product before we can begin to market itWhat can brand image focus on?leadership (most popular), key benefits, or customers (remain targeted to a specific group)How do political stances affect consumers?can attract or alienate based on specific consumerWhat determines whether a political stance is more likely to be a net positive?when the stance creates a lot of brand awarenessWhat's the difference between brand extensions and co-branding?co-branding allows one branded product to feature another brand while a brand extension is just placing the same brand on multiple productsWhat are the positive and negative outcomes of brand extensions?improves odds of new product success, gives feedback, promotes brand dilutionWhat determines if a brand extension works?fit/connection, strength of brand, amount of successful extensionsHow can connection backfire?when one industry goes down, so do all your other products in other industriesWhy is pricing so important?it is the reflection of everything you do as a business and it's the most objective assessment of a product's value; directly influences customer perception of valueWhat's the difference between value-based pricing and cost-based pricing?value-based pricing sets price based on what customers are willing to pay while cost-based pricing sets price based on costsWhich pricing method is the hardest?value-based pricingWhy do large retailers not engage in value-based pricing?too much work to identify ideal priceWhat type of strategy is EDLP?static pricingFor new products, what are skimming and penetration pricing?skimming is setting initial price high and gradually dropping it; penetration pricing is introducing product at relatively low price to gain large market share before competition entersWhat are the likely outcomes of a price war?competitor customers may switch over but don't become loyal customers; you lose money you could have made and price will continue to spiral downward until some go out of businessWhat's a reference price?the expectation for the price of a productWhen are reference prices less accurate?when its a larger more emotional decisionHow does odd-even pricing affect consumers' reactions to prices?it makes them seem cheaper when number is right below threshold; doesn't work on larger more emotional purchases thoughHow do price sizes/placement affect consumers' reactions to prices?if it's on the left and at the bottom it feels smaller, if it's on the right and at the top it feels biggerHow does priming and decoys affect consumers' reactions to prices?decoys set reference price to make real price look lower priming a big number will give people a higher reference price and make them willing to pay more in the endHow does pain of payment affect consumers' reactions to prices?remove dollar signs to make people more willing to pay; paying after consumption creates more pain of paymentWhat's the purpose of price discrimination?to make pricing fully value-basedWho are superconsumers?Massive fans of a product who love to innovate new uses for the product and new variations of itAre superconsumers price sensitive?noAre there superconsumers for any product?For most of themWhat is dynamic pricing?Changing price constantly to match competitors or customer demandWhere is dynamic pricing especially prevalent?Airlines, hotels, and rental carsWhen is dynamic pricing illegal?When it's done to harm competitorsEven when dynamic pricing is legal, why must firms be careful when price discriminating (especially in regards to dynamic pricing)?They have to be careful because customers/people will think it is unfairWhat are the four determinants of unfairness perceptions?Perceptions of excessive profit Perceived immorality Inability to understand pricing strategy ReputationWhat is Pay What You Want pricing?allow customers to pay exactly what they are willingWhich industries has Pay What You Want pricing been found to work?Coffee and restaurantsHow does a reference price work with PWYW?If customers are not willing to pay reference price, they will pay less or not at allWhat happens when you pair CSR with PWYW?Don't know what pay so you give extraWhat are the diffusion of innovation adopter categories? What characterizes each group?innovators/early adopters early majority late majority laggardsWhy do early adopters adopt?they like to be first and especially like to tell people about products