MARK 3321 1st EditionExam # 3 Study Guide Lectures: 9-11Lectures 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 productso Convenience products Like candy, sodas, etc. Make it easy and appealing to purchaseo Shopping products More expensive than convenience, do more comparison shopping Homogenous- Very straight-forward decision rule Heterogeneous  Ex: computerso Specialty products Not really have good substitutes in the marketplace Go to extensive lengths to acquire the product Ex: rolexo 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 mixeso Product item A specific version of a product that can be designated as a distinct offering among an organization’s productso Product line A group of closely-related product itemso Product mix All products that an organization sells- Product modificationo 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- New car modelso Planned obsolescence The practice of modifying products so those that have already been sold becomeobsolete before they actually need replacement. Making a product knowing it will need to be replaced even when it has still has functionality- Ex: cell phones- Brando A name, term, symbol, design, or combination therefor that identifies a seller’s products and differentiates them from competitor’s products- Video case: Method soapo The position could be that they want to be seen as safer and friendlier, more aesthetic than other cleaners, etc.- Brandingo Brand name The part of a brand that can be spoken, including letters, words, and numberso Brand mark The elements of a brand that cannot be spokeno Brand equity The value of company and brand nameso Global brand A brand where at least one third of the product is sold outside its home country- Branding strategieso Manufacturers’ brand The brand name of a manufacturero Private brand A brand name owned by a wholesaler or a retailer Also known as a private label or store brand- Ex: Sam’s clubo Captive A brand manufactured by a third party for exclusive retailer, without evidence ofthat retailer’s affiliation- Advantages of Manufacturer’s Brands (for resellers)o Heavy consumer ads by manufacturers develop strong consumer loyaltieso Well known manufacturers’ brands can: Attract new customers Enhance the reseller’s prestigeo Can carry less inventory due to manufacturers’ rapid deliveryo 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 brando There is less pressure to mark down price due to exclusivityo Brand ties customer to wholesaler or retailero No risk of brand being dropped before desiredo Have control over the intensity of distribution- Individual brands vs Family Brandso Individual brand Using different brand names for different products- Ex: Proctor and Gamble (have 20+ brands)o Family brand Marketing several different products under the same brand name- Ex: Sony, Toyota, etc.- Co-brandingo 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 Packagingo Contain and protecto Promoteo Facilitate storage, use, and convenienceo Facilitate recycling- Labelingo Persuasive labeling Focuses on promotional theme or logo with consumer information being secondaryo Informational labeling Designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase- Universal Product Codeso UPCs A series of thick and thin vertical lines (bar codes) readable by computerized optical scanners, that represent numbers used to track products- Product Warrantieso Warranty A confirmation of the quality or performance of a good or serviceo Express warranty A written guaranteeo 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 Productso New-to-the-world Create a market that never existed before- Smartphones, o New product lines Introduce a product that your company has never sold beforeo Product line additions A new type of the product Ex: a new plasma TVo Improvements/revisions- New Product Development Processo 1. New product strategy Links the new product development process with the objectives of the marketing department, the business unit, and the corporationo 2. Idea generation Sources of new-product ideas- Customers, employees, distributors- Competitors, R & D, consultants, other expertso 3. Idea screening Screening- 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 createdo 4. Business analysis Considerations in this stage- Demand- Cost- Sales- Profitabilityo 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 caro 6. Test marketing The limited