Last Modified: 2011-10-04
- Convenience Products
- Shopping Products
- Specialty Products
- Unsought 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.
- Manufacturer's brand
- Private brand
- Captive brand
- Individual brand
- Family brand
- Sounds - (MGM lion roar)
- Shapes - (coke glass bottle)
- Ornamental color or design
- Catchy phrases
- Abbreviations - (Coke, Bud)
- 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 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
- New Product strategy
- Idea generation
- Idea screening
- Business analysis
- Test marketing
- 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
- 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
- Most important factor - good match btwn product and market needs.
- Delivers meaningful benefit to sizable # of people, different from substitutes
- 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
- 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
- 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 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 (--)
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")
- 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
- 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.
- 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)
- 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)
- Heterogeneous - hard to compare because not the same. ex - universities, clothing.
- Homogenous - similar products differentiated by lower price
- 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
- 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
- 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.
- 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
- 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
- R & D -product development
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)
Difficulty depends on newness of the product, size of market, etc. Established markets are easier to estimate b/c more info avail.
- 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
- 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
- Decision to market a product
- Ordering production materials/equip, building up inventories, shipping to distributors, advertising to customers
- 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
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