Marketing Exam 3 Chapters 12 13 19 Price is generally lowest for convenience products Product Adopter Categories o Innovators o Early Adopters o Early Majority o Majority o Late majority o Laggards New Product Development is like poker usually makes up for those loses 1 Product Life Cycles Introduction Get it off the ground o You know that you ll lose a lot of chips a majority of the time but when you win it history 2 Growth 3 Maturity o Characterized by initial losses Motorolla lost 5 Billion worst new product failure in o Slotting Allowances manufacturers pay retailers to get products shelf exposure o Rapid growth in sales and competitors and product versions o Market segmentation begins o Longest stage of the life cycle o Most things measured during a product s life cycle reach a maximum Sales Peak o Late Majority begins o Intense competition saturated market 4 Decline o Position for niche segment or completely exit o Laggards enter SKU Stock Keeping Units o Refer to product ITEMS o Large Grocery Store will have 40 000 SKUs Push Strategy for wholesalers push the product onto them so they can push it onto the consumer Pull Strategy for consumers draw consumers in with advertising to buy product Outsourcing of production has become more important in making NATIONAL BRANDS Brandstanding sponsorship of event and organizations to draw attention to brand Don t say anything about product usually o EX Victoria Secret Pink at OSU o Red Bull Cliff Jump Communications challenge for service providers is due to services INTANGIBILITY Supply and Demand must closely match Time Period because of services PERISHABILITY Rainmakers have long been a part of marketing by PROFESSIONALS Lawyers 1 Cultivate referrals get word out about self 2 Professional Visibility Opportunities divorce issue column lawyers would answer 3 Specialize increase segmentation experts 4 Market Penetration get more business from current customers 5 De Marketing discourage certain customers be selective a sign of success We don t do much Marketing We don t do much Advertising Current Conditions for Promotion o Markets and media are becoming more fragmented o Customer groups are more skeptical about marketing o Promotion environment is more cluttered than ever o There are many practical alternatives for advertising Selective Perception is why most ads are screened out Advertising waste is greatest for newspapers Potential advantages of on line advertising all begin with the letter I Publicity is part of promotion and also public relations CHAPTER 12 Shopping Products are usually either Homogeneous price based or Heterogeneous attribute based Types of Convenience Products o Staples o Impulse o Emergency New is the 2nd most common claim in ads after Free The bottom line with New Products is that Profits Are Expected Pressures for New Products o Market Saturation no growth potential left o New Substitutes o Changes in comsumer tastes income o Intensified Competition Popular Explanations for New Products o Lifeblood constantly changing o Growth and Diversification o Use of Excess Capacity Bi Products use leftovers for new products o Exploit strong channel relationships New Products are much more important to some companies then others Product Life Cycle s are becoming shorter Stages in New Product Development o Generate Ideas o Evaluate Ideas o Conduct Business Analysis o Develop Product and Marketing Mix o Test Marketing optional stage o Commercialization Changes with Product Development Back to the Drawing Board Parallel Processing doing multiple steps simultaneously Accelerate the Process Product Champions mentors for products treat the product like their babies Any of the 4 P s can and will be changed Should we forget about the Product Life Cycle o Minority opinion yes due to excessive expectations o Majority opinion still find it useful for planning o Self Fulfilling Prophecies where you think something will happen so strongly you almost force it to happen Product Items 1 very specific product EX a 2 liter Coke Product Lines bunch of products related to each other EX Cereals Product Categories the way customers put products together that are substitutes Product Mix collection of all the different product lines EX Special K products Has many different product lines shallow product lines Narrow Product line specialists deep assortment of products Product Proliferation excessive expansion of product lines too many choices usually marketing sales people fault Product Planning cutting excess products to increase sales due to cost reduction o Not all about maximizing sales but maximizing sales related to cost Biggest Buzzword in marketing Branding Brand Name something you can literally say and know Wal Mart Brand Mark something you see and know Nike Swoosh Trade Mark Any aspect of the brand you own design certain feature o Hard to control outside of US Brand Character Ronald McDonald Wendy Flo Branding began with the industrial revolution EX Allegheny Airlines was worried about their brand image with being too region associated and changed name to US Air Mirror Awareness People prefer a brand that they ve heard of even if they know nothing about it The main goal of branding is to keep current customers so you don t have to go find new ones A strong brand is the result of effective marketing not the cause Types of Brand Names National Manufacturers household names companies MAKE product Resellers Private Label Store brands gaining market share TWO Kinds o Contract Manufacturer copy brands put store label on it o National Manufacturers compete w themselves but have accessibility to both types of customers Generic store brands that don t have marketing support 1 2 marketshare inferior quality mindset with consumers Licensed Famous name is rented What OSU does with Nike In general Brand Loyalty for consumer products has decreased significantly in recent years For every 1 spent on advertising 75 cents is packaging 200 Billion industry customers willing to pay more Services are over of the Gross National Product and of all jobs Services or service a product offer that is mainly or exclusively intangible Gourmet Restaurant 100 Intangible McDonald s 50 Pick your apples Orchard 100 Tangible Unique Conditions with Service Marketing Intangibility hard to communicate due to this riskier because customers can t see what they re getting Variability quality control ex getting a haircut when the hairdresser is hung over vs later in the day o
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