MARK 3321 1st Edition Exam 3 Study Guide Lectures 9 11 Lectures 9 11 Tuesday March 24 Tuesday April 7 CH 10 Product Concepts What is a product o Everything both favorable and unfavorable that a person receives in an exchange Tangible good Service Idea Types of consumer products o o Convenience products Like candy sodas etc Make it easy and appealing to purchase Shopping products More expensive than convenience do more comparison shopping Homogenous o o Very straight forward decision rule Heterogeneous Ex computers Specialty products Not really have good substitutes in the marketplace Go to extensive lengths to acquire the product Ex rolex Unsought products Product is really new don t know much about it or what it does Really do not enjoy thinking or purchasing the product ex burial plots Product items lines and mixes o Product item o Product line o A group of closely related product items Product mix A specific version of a product that can be designated as a distinct offering among an organization s products All products that an organization sells Product modification o Product modification changes one or more of a product s characteristics Quality modification Improve or enhance performance some way Ex New shape for razor to increase performance Functional modification Changing what the product does for you Ex software update Style modification o New car models Planned obsolescence The practice of modifying products so those that have already been sold become obsolete before they actually need replacement Making a product knowing it will need to be replaced even when it has still has functionality Brand o A name term symbol design or combination therefor that identifies a seller s products and differentiates them from competitor s products Video case Method soap o The position could be that they want to be seen as safer and friendlier more aesthetic than other cleaners etc Branding o Brand name o o The elements of a brand that cannot be spoken Brand equity o The part of a brand that can be spoken including letters words and numbers Brand mark The value of company and brand names Global brand A brand where at least one third of the product is sold outside its home country Branding strategies o Manufacturers brand o The brand name of a manufacturer Private brand A brand name owned by a wholesaler or a retailer Also known as a private label or store brand o Ex Sam s club Captive Ex cell phones A brand manufactured by a third party for exclusive retailer without evidence of that retailer s affiliation Advantages of Manufacturer s Brands for resellers o Heavy consumer ads by manufacturers develop strong consumer loyalties o Well known manufacturers brands can Attract new customers Enhance the reseller s prestige o Can carry less inventory due to manufacturers rapid delivery o If a manufacturer s brand of poor quality is sold the customer may simply switch brands and remain loyal to reseller Advantages of Private Brands for resellers o Reseller can usually earn higher profits on its own brand o There is less pressure to mark down price due to exclusivity o Brand ties customer to wholesaler or retailer o No risk of brand being dropped before desired o Have control over the intensity of distribution Individual brands vs Family Brands o Individual brand Using different brand names for different products o Family brand Marketing several different products under the same brand name Ex Proctor and Gamble have 20 brands Ex Sony Toyota etc 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 Ex Coke and liquor etc o Contain and protect o Promote o Facilitate storage use and convenience o Facilitate recycling Labeling Persuasive labeling o Focuses on promotional theme or logo with consumer information being secondary Informational labeling Designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase Universal Product Codes o UPCs Two products are suggested to be used together Functions of Packaging o 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 2 Idea generation o Links the new product development process with the objectives of the marketing department the business unit and the corporation Sources of new product ideas Customers employees distributors Competitors R D consultants other experts 3 Idea screening Screening 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 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 Considerations in this stage Demand Cost o o o o 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 Alternatives to test marketing Single source research using supermarket scanner data Simulated lab market testing Online test marketing 7 Commercialization Production Inventory buildup