MARK 3321 1st Edition Lecture 10 Outline of Last Lecture I Products II Types of Consumer Products III Product Items Lines and Mixes IV Product Modification V Brand VI Video Case Method VII Branding VIII Branding Strategies IX Advantages of Manufacturer s Brands and Private Brands Outline of Current Lecture I Individual Brands vs Family Brands II Functions of Packaging III Labeling IV UPCs V Product Warranties VI Categories of New Products VII New Product Development Process VIII Categories of Adopters IX Product Characteristics X 4 Stages of Product Life Cycle XI Importance of Services XII How Services differ from Goods XIII Components of Service Quality XIV Service Strategy XV Relationship Marketing in Services Current Lecture CH 10 Product Concepts continued Individual brands vs Family Brands o Individual brand Using different brand names for different products Ex Proctor and Gamble have 20 brands These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute o Family brand Marketing several different products under the same brand name Co branding o Types of co branding Ingredient branding When one product is being sold on the marketplace and another component is part of it Ex Computers Dell and Intel food products Cooperative branding Two brands getting together for promotions Complementary branding Two products are suggested to be used together Ex Coke and liquor etc Functions of Packaging o Contain and protect o Promote o Facilitate storage use and convenience o Facilitate recycling Labeling o Persuasive labeling o Focuses on promotional theme or logo with consumer information being secondary Informational labeling Ex Sony Toyota etc Designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase Universal Product Codes o UPCs A series of thick and thin vertical lines bar codes readable by computerized optical scanners that represent numbers used to track products Product Warranties o Warranty o Express warranty o A confirmation of the quality or performance of a good or service A written guarantee Implied warranty An unwritten guarantee that the good or service is fit for the purpose for which it was sold UCC uniform commercial code CH 11 Developing and Managing Products Categories of New Products o New to the world Create a market that never existed before o New product lines o o Smartphones Introduce a product that your company has never sold before Product line additions A new type of the product Ex a new plasma TV Improvements revisions New Product Development Process o 1 New product strategy o Links the new product development process with the objectives of the marketing department the business unit and the corporation 2 Idea generation Sources of new product ideas Customers employees distributors Competitors R D consultants other experts o 3 Idea screening Screening o o Concept tests Often used at the screening stage These tests evaluate a new product idea usually before any prototype has been created 4 Business analysis o The first filter in the product development process which eliminates ideas that are inconsistent with the organization s new product strategy or are obviously inappropriate for some other reason Considerations in this stage Demand Cost Sales Profitability 5 Development Creation of prototype Sketch marketing strategy Packaging branding labeling Promotion price and distribution strategy Manufacturing feasibility Simultaneous product development A new team oriented approach to new product development where all relevant functional areas and outside suppliers participate in the development process Ex new electric car we develop the car and get another company to develop batteries for the car 6 Test marketing The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation o o Single source research using supermarket scanner data Simulated lab market testing Online test marketing 7 Commercialization Production Inventory buildup Distribution shipments Sales training Trade announcements Customer advertising New Product Categories of Adopters o o o Innovators First 2 5 to adopt the new product More well off and tend to buy the newest and latest stuff Early adopters Next 13 5 Opinion leaders usually come from this category Do some research before purchasing Early majority o o Next 34 Late majority Alternatives to test marketing Next 34 Laggards Final 16 Resistant to change hold off until they have to buy the product Product characteristics and the Rate of Adoption o Complexity o Compatibility o The degree to which the benefits or other results of using the products can be observed by others and communicated to target customers Trial ability The degree to which a product is perceived as superior to existing substitutes Observability o Incompatible products diffuse slower Relative advantage o The more complex the product the slower its diffusion How easily can I buy it and consume it Four stages of Product Life Cycle o Introductory stage o Growth stage o Maturity stage o Decline stage CH 12 Services and Nonprofit Organization Marketing The Importance of Services o Services are the result of applying human or mechanical efforts to people or objects o Services industries account for Over 2 3 of US GDP 4 out of every 5 US jobs Global Issues in Services Marketing o US is the world s largest exporter of services Cannot be physically possessed Ex UTA sending professors to teach in China could be consulting etc Goods and or Services are the Product How services differ from goods o Intangible o Inseparable o Services cannot be saved and it is challenging to synchronize supply and demand Components of Service Quality o o Reliability The ability to perform the service right the first time Customers consider this the most important indicator of service quality Responsiveness o o The knowledge and courtesy of employees and ability to convey trust Empathy o The ability to provide prompt service Assurance Caring individualized attention to customers Tangibles Services depend on their employees for quality which makes consistency difficult to achieve Perishable Production and consumption are simultaneous meaning the consumer takes part in Heterogeneous o No physical object makes it hard to communicate benefits The physical evidence of the service Product Services