Exam 3
Marketing 3305 with Davis at Baylor University
About this deck
By: Sarah Van Dyke
Created: 2011-10-03
Size: 46 flashcards
Views: 39
Created: 2011-10-03
Size: 46 flashcards
Views: 39
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Product
Everything a person receives in an exchange, favorable or unfavorable. Can be a tangible good or an intangible service.
Types of products
- Convenience Products
- Shopping Products
- Specialty Products
- Unsought Products
Product item, Product line vs. Product mix
A product item is a specific version of a product, distinct from all other things a company offers.
Product Line - a drop of closely related products. Ex - Different flavors of Cambell's soups
Product Mix- includes all the types of products a company sells. Ex. - Cambell's soups, frozen dinners, beverages, etc.
Adjustments to products
- Product Modification - change in quality, function or style
- Planned obsolescence (usu. through modifying product's style)
- Repositioning - ex: redesigning classic lit. book covers to mimic cool teen novels
- Product Line Extensions - adding products to better compete in market
- Product Line Contraction - a way to deal with overextension when they get carried away. streamline products to lessen confusion.
Branding, brand equity
Brand - name, term, symbol, design (or combination of these) that identifies a seller's products and differentiates them from competitors.
Brand equity- value of company and brand names. Higher equity = higher awareness, perceived quality and loyalty
Branding strategies
- Manufacturer's brand
- Private brand
- Captive brand
- Individual brand
- Family brand
- Co-branding
Trademark, service mark
Trademark - exclusive right to use a brand or part of a brand.
Service mark - exclusive right applied to services, ex: weight watchers
Things that can be trademarked:
- Sounds - (MGM lion roar)
- Shapes - (coke glass bottle)
- Ornamental color or design
- Catchy phrases
- Abbreviations - (Coke, Bud)
Labeling, types
Persuasive labeling - focuses on a promotional theme or logo, consumer info. is secondary.
Informational labeling - designed to help consumers make proper selections, lower their cognitive dissonance. Ex: nutritional information
Warranty, types
Warranty - protects the buyer and confirms quality or performance of a good.
- Express - written guarantee (even simple statements like "100% cotton")
- Implied - unwritten guarantee that the product is fit for its purpose. All products have this under the Uniform Commercial Code.
New product, categories
- New-to-the-world
- New product lines - something that exists but company hasn't done before
- Additions to existing product lines - new products to enhance est. line
- Improvements of existing products - new version of existing product
- Repositioned products
- Lower-prices
New Product Development process
- New Product strategy
- Idea generation
- Idea screening
- Business analysis
- Development
- Test marketing
- Commercialization
Diffusion of innovation, 5 categories of adopters
Innovation - product perceived as new by adopters
- Innovators -first 2.5%, higher income, well-educated, confident & worldly
- Early adopters - next 13.5%, rely on group norms, more likely to be opinion leader b/c of ties w/ local community,
- Early majority - next 34%, value opinion leaders, but also do deliberate research and evaluation.
- Late majority - next 34%, skeptical, mainly buy to conform w/ others
- Laggards - final 16%, rely on tradition rather than group norms
Product life cycle stages
- Introductory
- Growth
- Maturity
- Decline
Product characteristics/rate of adoption
- Complexity - complex products = slow diffusion
- Compatibility - incompatible products = slow diffusion
- Relative advantage - degree a product is perceived as superior to existing substitutes. Ex: ipod > CDs
- Observability - degree that benefits of use are visible to others. Fashion trends have high observability
- "Trial-ablity" - Easier to try out a new toothpaste than a new computer
Reasons new products succeed/fail
- Most important factor - good match btwn product and market needs.
- Delivers meaningful benefit to sizable # of people, different from substitutes
Services, 4 characteristics that make distinct
Service - result of applying human or mechanical efforts to people or objects
Characteristics:
Characteristics:
- Intangible
- Inseparable - cant separate production and consumption b/c consumers must be present, ex: haircut, surgery
- Heterogeneous - variability of inputs/outputs, less standardized and uniform
- Perishable - can't be stored or inventoried, empty hotel room = no revenue
Evaluations of service quality
- search quality - characteristic that can be easily assessed before purchase. Ex: color
- experience quality - can only be assessed after use. Ex: quality of meal in restaurant
- credence quality - hard to assess even after purchase b/c consumers lack knowledge. Ex: medical services
5 Service quality dimensions
- Reliable - performing service correctly the 1st time
- Responsive - prompt service 24/7
- Assurance - knowledgeable, trustworthy employees
- Empathy - individualized attention to customers
- Tangibles - physical appearance of building, employees, equipment, etc
Gap model of Service quality
- Gap 1 - management has incorrect view of what customers want
- Gap 2 - management fails to translate customers needs into delivery plan
- Gap 3 - service plan differs from service actually provided, managemt/employees dont follow through
- Gap 4 - company's services do not meet customer expectations about what the firm provides
- Gap 5 - difference between what customer expects and what they receive, can be (+) or (--)
Core and supplementary services
Core - most basic benefit customer is buying (bedroom rental @ hotel)
Supplementary - supports or enhances the core service (room service, reservations, etc)
Firms usu. emphasize supp. services to create comp. advantage (Or could strip down and mkt themselves as "value")
Supplementary - supports or enhances the core service (room service, reservations, etc)
Firms usu. emphasize supp. services to create comp. advantage (Or could strip down and mkt themselves as "value")
Promotion strategies for services
- Stressing tangible cues
- Using personal information sources (using celebs or real people in ads)
- Strong organizational image (branding, appearance of employees, etc)
- Post-purchase communication
Internal marketing
treating employees as customers, developing systems and benefits to meet their needs. Happier employees = better customer service.
Nonprofit organization, marketing
- Price - Generate enough income to cover expenses, rather than profit. Sometimes indirect payment through taxes.
- Product - Benefits it offers often complex or indirect, very low / very high involvement
- Promotion - business professional volunteers, public service announcements
- Must focus on apathetic / strongly-opposed target mkts. Often doesnt break into diff. segments.
4 Types of service processes
- People processing - service directed @ customer. (health care)
- Possession processing - directed @ customer's possessions. (dry-cleaning)
- Mental stimulus - directed @ people's minds. (theater performance)
- Info. processing - technology or brainpower directed @ customer's assets. (consulting)
Relationship marketing
- Lvl 1 - pricing incentives to encourage customer loyalty. (frequent flyer program)
- Lvl 2 - pricing + social bonds. Firm stays in touch w/ customers, learns needs, designs services
- Lvl 3 - financial + social + structural bonds. Value-added services not available anywhere else. (exclusive games online)
Convenience Products
Relatively inexpensive, little shopping effort. Consumers not willing to shop around. Ex - soda, car wash
Shopping Products
More expensive than convenience, fewer avail. stores. Consumer will compare several brands before buying.
2 Kinds:
- Heterogeneous - hard to compare because not the same. ex - universities, clothing.
- Homogenous - similar products differentiated by lower price
Specialty Products
Customers search extensively for a specific product and are very reluctant to accept substitutes. Ex - Rolls Royce cars, Ruth's Chris Steakhouse
Unsought Products
Product unknown to the potential buyer, or product that the buyer doesn't actively seek out.
Ex - new products (before advertising), unpopular things such as insurance, burial plots
Product width vs. product depth
Product mix width - refers to the number of different product lines a company offers
Product line depth - number of specific product items are in a product line
Brand name vs. Brand mark
Brand name - part of a brand that can be spoken, including letters/words/numbers
Brand mark - elements of a brand that can't be spoken. ex: mercedes benz car logo
Manufactuers vs. Private brands
Manufacturer's brands are what we normally think of, the brand is the name of the company that makes that product. Ex: Crest toothpaste
Private brands are owned by a wholesaler or retailer, cheaper b/c no marketing costs, higher profit margin for firm. Ex: Great Value at Walmart
Captive brands have no visible affiliation with the store, manufactured by someone else, but have an agreement to sell exclusively at their store
Individual vs Family brands
Individual branding - used when a company has widely varying products. Ex: Proctor and Gamble targets diff. market segments w/ different types of laundry detergent.
Family branding - a company that markets different products under same brand name. Ex - Jack Daniel's whiskey, coffee, playing cards, etc.
Co-branding (and types)
- Cooperative branding - ex: Tide detergent with added Febreeze scent
- Ingredient branding - brands get equal treatment. Embassy Suites partnering with SouthWest Airlines for a promotion
- Complementary branding- marketed together to suggest usage. Ex: Jiff Peanut butter and Smucker's jelly
Generic product name
Identifies a product by class or type, can't be trademarked.
Can be a result of a company not protecting a trademark. Ex - aspirin, kleenex. Companies like Coca-Cola and Sharpie must fight aggressively to enforce their trademark.
Introductory Stage (PLC)
- Full-scale launch of new product into market.
- Little competition, frequent product modification, limited distribution.
- High marketing costs, sales increase slowly, profits usu. negative.
- Promotion strategy - develop awareness of your product and inform consumers
Growth Stage (PLC)
- Sales grow at increasing rate, competitors enter market, profits rise and then peak
- Focus switches to brand advertising, showing differences between brand names
- Distribution becomes key, manufacturers try to build long term deals w/ distributors.
Maturity Stage (PLC)
- Sales increase at decreasing rate, market approaches saturation
- Product lines diversify to meet diff. market segments, style changes over functional ones, service and repair becomes important
- Some competitors drop out, profit margins shrink, distribution harder
Decline (PLC)
Long run drop in sales, firms must re-develop their strategy to gradually withdraw product from market. "Organized abandonment"
Idea Generation (NPD)
New-product ideas come from many sources:
- Customers
- Employees - they analyze the marketplace
- Distributors - aware of customer needs, closer to end users
- Vendors - Ex: 7-Eleven making deals w/ Coke and Nestle to have products just for them
- Competitors
- R & D -product development
Idea Screening
Most ideas eliminated during this stage.
Use concept tests to get consumer reactions before prototypes are created.
Use concept tests to get consumer reactions before prototypes are created.
- Good indicator of success for new products that don't fit in existing categories, but don't require major changes in consumer behavior.
- Not good predictors when it requires new consumption patterns (computers, microwaves, etc)
Business Analysis
Preliminary figures for demand, cost, sales and profit are calculated.
Difficulty depends on newness of the product, size of market, etc. Established markets are easier to estimate b/c more info avail.
Difficulty depends on newness of the product, size of market, etc. Established markets are easier to estimate b/c more info avail.
Development
- R & D develops a prototype, firm starts planning marketing strategy (including the 4 P's, and branding/labeling), lab tests done.
- Simultaneous product development - when ALL relevant areas (R & D, mktg, engineering, production) and outside suppliers participate in ALL stages of development
Test Marketing
- Limited introduction of a product and marketing program to determine customer reactions.
- Test run for the marketing mix, can evaluate alternative strategies.
- Very expensive, but better than failing on a nat'l level
- One alternative is simulated (lab) market testing
Commercialization
- Decision to market a product
- Ordering production materials/equip, building up inventories, shipping to distributors, advertising to customers
Price strategy for service
- Revenue oriented - focuses on income > costs, but costs can be diff. to determine
- Operations oriented - varies prices to match supply to demand. (hotel rooms cheaper in the off-season)
- Patronage oriented - tries to maximize # of customers. Prices depend on each mkt segment's ability to pay
About this deck
By: Sarah Van Dyke
Created: 2011-10-03
Size: 46 flashcards
Views: 39
Created: 2011-10-03
Size: 46 flashcards
Views: 39
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy