Marketing 400 Test 3
David Fallin KSU
Terms in this set (59)
What are the four stages of the product life cycle?
introduction, growth, maturity, decline
new products that are not known to customers, poorly defined market segments, unspecified product features, low sales growth, rapid technological change, operating losses, a need for financial support
strong increases in sales, growing competition, developing brand recognition, a need for financing complementary value-chain activities such as marketing, sales, customer service, and research & development
Fully established product is faced with competition from other contenders for share of the market. May be forced to cut prices which result in profit loss.
falling sales & profits, increasing price competition, industry consolidation
Dropping the product from the company's product line, most drastic strategy.
Consists of the entire product category or industry
Consists of the variations of a product within the product class.
What are five categories and profiles of product adopters?
Innovators, early adopters, early majority, late majority, and laggards.
barriers to adoption
Usage, value, risk and psychological.
We change one or more characteristics of a product.
a strategy in which a company tries to find new customers, increase a products use among existing customers, or create new use situations.
Involves adding value to the product or line thru additional features or higher quality materials.
Involves reducing the number of features, quality, or price.
Pay more for less.
A marketing decision in which an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors.
The unique image/name of a company which identifies itself with the consumers and differentiates companies within consumers
A commercial, legal name under which a company does business.
A symbol, word, or words legally registered or established by use as representing a company or product.
The differential effect the brand name has on the customer (How much more are you willing to pay for brand name vs. generic?)
(also called family branding or corporate branding)
Uses one name for all its products in a product class
offers a way to establish different features and appeal to different buying motives. Creates uniqueness.
A retailer, wholesaler or distributor owns the brand, but the product is supplied by the manufacturer but the brand is not. eg. sears (craftsman, kenmore)
An intangible product that involves a deed, a performance, or an effort that cant be physically possessed.
When you pay different prices for the same thing. How much a good or service means to you. The perceived benefits/ Price are in the eyes of the consumer.
firms and individuals involved in the process of making a product or service available for use or consumption by customers
third party that acts as a link between two other parties
A distribution channel in which producers sell directly to consumers.
includes one or more intermediaries who help move the product from the manufacturer to the consumer.
electronic marketing channels
Use internet to make products available. Example: Amazon
direct marketing channels
allows consumers to buy products by interacting with various advertising media without a face to face meeting with a salesperson. (catalog)
When retailers blend different delivery channels. Example: catalog in store.
Extra cost of producing one additional unit of production. Change in TC/ Change in Q
break even analysis
determining price at which total costs = total revenue (price where you will break even)
break even point
a break-even point (bep) is the quantity at which total revenue and total cost are equal.
When companies charge a high initial price for a new product to skim max revenues from segments willing to pay the high price; fewer but more profitable sales, little competition
Firm charges a low initial price to attract a large # of buyers quickly to gain market share; elastic market, low prices keep competition out
Charging a high price to help promote a high-quality image.
Using a number of different specific price points for your line of your products
Setting prices a few dollars or cents under an even number
Combining several products & offering a bundle at a reduced price (ex. cable, internet, phone, value meals)
yield management pricing
Pricing that depends on the time of day, season, and day of the week. Example: Plane that leaves at 6 am is cheaper.
standard markup pricing
a percent markup over cost of labor
cost plus pricing
when the price for a product is determined by adding negotiated profit or fee to the actual costs incurred by the producer.
experience curve pricing
based on learning curves (high and low) every time we double our product our profit drops 10-30%
a reduced price to encourage the purchase of a particular product in the off-season, perhaps better thought of as an "out-of-season" discount
Discounts due to payment within a specified time.
Reductions off regular price to resalers in market channels.
every day low prices. Example: Walmart
Deductions from list price for purchasing large quantities.
trade in allowances
They give you their used product in return for a knock off price on the new product.
the use of two or more channels to distribute the same product to target markets
an organization gives another organization the right to use its name and operating methods.
Manufacturer sponsored retail franchise system
a franchise system that is prominent in the automobile industry, where a manufacturuer licenses dealers to sell its cars subject to various sales and service conditions
Manufacturer sponsored wholesale systems
A company licenses wholesalers that purchase materials and then distribute its products to retailers and restaurants
service sponsored retail franchise systems
They are provided by firms that have designed a unique approach for performing a service and wish to profit by selling the franchise to others. They exist when franchisors license individuals or firms to dispense a service under a trade name and specific guidelines.
service sponsored franchise system
auto rental business; fast food--McDonald's, Burger King