Upgrade to remove ads
Only $35.99/year

Marketing Exam 3 Products Wolter

Terms in this set (35)

What is a product?
A bundle of benefits
What is the product level inner ring?
Core Product (inner ring): essential motivating benefit the customer is purchasing. It's what the customer wants to get most
§ Ex: the fun, relaxation, adventure, and family time of a great vacation
What is the product level middle ring?
o Actual Product (middle ring): the physical and intangible properties or characteristics the product takes on. This can include attributes such as the materials, styling, and branding. It's what the customer actually gets to satisfy what they want most
§ Ex: a Carnival Cruise Lines family cruise package
What is the product level outer ring?
o Augmented Product (outer ring): these are extra attributes and features that are not part of the actual product but may be offered to make the offering more attractive, to speed purchase decisions, and to match or differentiate the actual product from competitors
§ Ex: deep discounts on airfare to the cruise port, hotel accommodations the night before departure, preferred boarding and check-in
How do failures affect the levels
Delta air lines introducing more AI= bad for business because nobody likes robot
What is feature fatigue?
consumers choose overly complex products

"Feature Fatigue:" Canon camera features used to be incredibly overwhelming with stats, new features descriptions are more streamline.
What are the four categories of benefits?
o (From bottom to top): functional, emotional, life-changing, social impact (self-transcendence)
How does the pyramid relate to Maslow's hierarchy?
o Very similar to Maslow's in the sense that basic needs/ basic values are at the bottom and as you approach the top it becomes more complex
In general which category of benefits must be fulfilled first?
o Functional because it is on the bottom
What are services?
o Actions or activities performed by the seller for the buyer
Why is it useful to think of services and goods as a continuum?
o Mostly goods example: furniture purchased cash and carry
o Balanced Goods-Services example: furniture reupholstery
o Mostly Services example: furniture movers
Why is the US a service-based economy?
Because the majority of what the U.S. produces is "intangible."
How are services different from goods?
Services are intangible, perishable, inseparable, and variable
§ Intangible: Services cannot be seen, tasted, felt, heard, or smelled before purchase

§ Variability: quality of services depends on who provides them and when, where, and how

§ Inseparability: services cannot be separated from their providers

§ Perishability: services cannot be stored for later sale or use
What are the five service characteristics that affect marketing?
Intangibility
Variability
Inseparability
Perishability
Ownership
How does intangibility of services affect marketing?
Intangibility: Intangible products are harder to assess. Benefits of intangible products must be made tangible. Tangible products often push intangible benefits to take advantage of the lasting power of abstract concepts in memory. Also, assessing the cost of a "unit of service" is difficult.
How does Variability of services affect marketing?
Variability: A heterogeneous product cannot be standardized, so it is harder to take advantage of economies of scale. Also, a heterogeneous product has greater FLE and customer input and therefore quality is harder to control.]
How does Inseparability of services affect marketing?
Inseparability: An inseparable product must be produced in front of and along with customers. Quality is hard to achieve and assess for the organization. Also, the customer must be accommodated within the servicescape creating capacity issues. Mass production and economy of scale is difficult to obtain. Customers impact each other.
How does Perishability of services affect marketing?
Perishability: A perishable product cannot be produced ahead of time, so demand must be forecast. A perishable product cannot be returned for a comparable product and therefore, additional remedies must be offered.
How does ownership of services affect marketing?
Ownership: Products will often be judged based on the quality of the transferred object. The object will often be considered the core product whereas everything else is periphery. When there is no ownership transfer, other things start to become more relevant such as relationships and tangible cues.
What is a new product?
o innovation as an improvement in a product's ability to deliver its primary benefit to customers, and we can distinguish between two types of innovation (from book)
What is a discontinuous innovation product and continuous innovation product?
§ discontinuous innovations: the large jumps in a product's benefit-delivering abilities. For example, suppose the primary benefit we sought was long-distance communication. Prior to the telegraph, communication was in the form of letters and documents delivered by hand or on horseback.
§ Continuous innovations: Between discontinuous innovations come smaller incremental improvements to products' benefit-delivery capabilities
What kind of innovation is a consumer likely to come up with?
o Consumers are good for validating (i.e. testing) and evolving but not for creating discontinuous innovations (they would probably come up with a continuous innovation
Who makes the innovations that lead to discontinuous new products?
§ Innovative ideas with strong market potential tend to come from "experts" in the field who combine newly emerging existing technologies.
What are the stages of the NPD process?
o Conceptualization: idea generation, idea screening, concept development, concept screening
o Planning: strategy development, marketing strategy, establishing a competitive advantage, business analytics, situation analysis, marketing plan, marketing mix
o Commercialization: product development, test marketing, product launch, rollout
diffusion of innovation
the idea that new technology and the products that utilize the technology spread through markets over time
innovators
comprise first 2-3% to adopt an innovation. Tend to be young and willing to take risks. Tend to be social, often through extensive use of social media.
early adopters
next 15%. High levels of opinion leadership, meaning that others tend to look to them for information about new products. They also tend to be relatively young and well-educated.
early majority
tends to be more risk averse than early adopters and chooses to wait until the bugs are worked out of product technology. These people are often well-educated, somewhat older than early adopters and innovators, and actively look to early adopters for product information.
late majority
tends to be skeptical of change, which is likely related to somewhat lower levels of education and social standing compared to the early majority.
laggards
make up the remaining 10-15% of adopters. Tend to adopt innovations as a matter of necessity, often when the prior technology is becoming difficult to find. Tend to be older than other groups, with purchase habits often driven by a sense of tradition.
Development stage
represents the investments that are made in a product by the pioneering company prior to the launch of the first brand in the category. Note in Figure 8.9 that the red line representing category profits starts at zero and plunges rapidly as costs are incurred, but no sales exist yet to offset them.
introduction stage
begins with the launch of the first brand to compete in the category. At this point, the pioneering brand has the often brief advantage of facing no rivals. During this stage, the pioneer wishes to encourage trial of the new product through stimulation of primary demand, which is demand for a product category without regard to brand.
growth stage
marks the start of very rapid sales growth in the product category. This occurs for two reasons. One, target markets become aware of the product and—assuming it's a good product—begin to buy it. Two, more and more competitors will see the success of the category pioneer and will enter the marketplace and increase category awareness and sales through their own marketing efforts. Given the presence of competing brands, companies begin to concentrate on stimulating selective demand, which is demand for a particular brand within a product category rather than the product category itself.
maturity stage
product category sales begin to level off. The product is no longer new and it has likely attracted most all of the new consumers it ever will. In the face of fierce competition, companies frequently implement incremental improvements to their original models. In other words, they work on continuous innovations.
Decline stage
many consumers have moved on to the new technology. Brands still competing in the category experience declining sales and profits. If the company has been well managed, it has also been investing in developing new products so that the end of one product category does not mean the end of the company. For the category in decline, companies must consider whether to divest (i.e., spin off and sell) or harvest (i.e., close and cash out the assets) the investment in their brand before profits disappear entirely.
Students also viewed