MKTG 3433Exam # 3 Study GuideChapter 12: Product and Service StrategiesI. Product and Service Strategiesa. Product Vs. Servicesi. Product: bundle of physical, service, and symbolic attributes designed to satisfy a customer’s wants and needs1. People buy “want satisfaction”, not objectsii. Goods: tangible products that customers can see, hear, smell, taste, or touch1. EX: A concert ticket is a goodiii. Service: intangible tasks that satisfy the needs of consumer and business users1. Services are intangible2. Perishable3. Cannot be standardized4. Inseparable from the service provider5. EX: Concert is a serviceb. How to Categorizei. Consumer (B2C) Products: product destined for use by ultimate consumers1. Unsought Products: products marketed to consumers who may not yet recognize a need for thema. EX: long term care insurance2. Sought Productsa. Convenience Products: goods and services consumers wantto purchase frequently, immediately, and with minimal efforti. Impulse buysii. Staples: goods and services that are constantly replenished1. EX: milk, shampoo, etciii. Emergencyb. Shopping Products: goods and services consumers purchaseafter comparing competing offeringsc. Specialty Products: goods and services with unique characteristics that cause buyers to prize those particular brandsii. Classifying Consumer Services1. Ask yourself:a. What is the nature of the service?b. What type of relationship does the service organization have with its customers?c. How much flexibility is there for customization and judgment on the part of the service provider?d. Do demand and supply for the service fluctuate?e. How is the service delivered?iii. Business Products: product that contributes directly or indirectly to the output of other products for resale (also called industrial or organizational product)1. Installation: major capital investments in the B2B marketa. Boeing 7872. Accessory Equipment: capital items that typically cost less and lastfor shorter periods of time than installationsa. Dell Equipment3. Component Parts and Material: finished business products of one producer that become part of the final products of another producera. Intel chips4. Raw Materials: natural resources that become part of the final producta. Sugar, silk, etc5. Supplies: regular expenses a firm incurs in its daily operationsa. MRO Items: supplies that include maintenance, repair, operatingi. Duct Tape6. Business Services: intangible products firms buy to facilitate their production and operating processesa. Railroadc. Product Lifecyclei. Introductory Stage: first stage of the product lifecycle, in which a firm works to stimulate sales of a new-market entry1. Start up costs are high2. Technical problems and financial losses are commonii. Growth Stage: sales volume rises rapidly as new customers make initial purchases and early buyers repurchase the product1. Competitors enteriii. Maturity Stage: Sales of a product category continues during the early part of this stage but eventually reach a plateau as the backlog of potential customers dwindles1. Differences between competition is minoriv. Decline Stage: innovations or shifts in consumer preferences bring about atotal decline in industry salesChapter 13: Developing and Managing Brand and Product CategoriesI. Brandinga. Brand: name, term, sign, symbol, design, or some combination that identifies the products of one firm, while differentiating them from the competition’si. Goal of branding is to create a competitive advantageb. Brand Loyaltyi. Brand Recognition: consumer awareness and identification of a brandii. Brand Preference: consumer reliance on previous experiences with a product to choose that product againiii. Brand Insistence: consumer refusal of alternatives and extensive search fordesired merchandiseII. Consumer Adoption Processa. Adoption Process: stages consumers go through in learning about a new product, trying it, and deciding whether to purchase it againi. Stages1. Awareness2. Interest3. Evaluation4. Trial5. Adoption/Rejectionii. Adopter Categories1. Consumer Innovators: people who purchase new products almost as soon as the products reach the market2. Diffusion Process: process by which new goods or services are accepted in the marketplaceiii. Identifying Early Adopters1. Firms who reach early purchasers can treat them as a test market2. Early purchasers can act as opinion leaders from whom others seek advice3. Characteristicsa. Youngerb. Better educatedc. Enjoy higher incomesd. More mobilee. Change both their jobs and addresses more oftenf. Rely more heavily on impersonal information sourcesiv. Rate of Adoption Determinants1. Relative Advantage: innovation that appears far superior to previous ideas2. Compatibility: innovation consistent with the values and experience of potential adopters3. Complexity: relative difficulty of understanding the innovation canslow the speed of acceptance4. Possibility of Trial Use: initial free or discounted trial of a good or service reduces adopters financial risk5. Observability: observing an innovation’s superiority increases the adoption rateChapter 14: Marketing Channels and Supply Chain ManagementI. Distribution Channelsa. Distribution: movement of goods and services from producers to customersb. Marketing (Distribution) Channel: system of marketing institutions that enhances the physical flow of goods and services and ownership title, from producer to consumer or business userc. Typesi. Marketing Intermediary (Middleman): organization that operates between producers and consumers or business usersii. Wholesaler: takes title to the goods it handles and then distributes these goods to retailers, other distributors, and end consumersiii. Direct Selling1. Direct Channel: moves goods directly from a producer to the business purchaser or ultimate user2. Direct Selling: strategy designed to establish direct sales contact between producer and final usera. Internet and direct mail are important tools for direct sellingiv. Dual Distribution: network that moves products to a firm’s target market through more than one marketing channelv. Reverse Channel: channel designed to return goods to their producersII. Types of Supply Chain a. Supply Chain: complete sequence of suppliers and activities that contribute to the creation and delivery of merchandiseb. Upstream Management: controlling part of supply chain that involves raw materials, inbound logistics, and warehouse and storage facilitiesc. Downstream