MAR3023 Exam 2 Study Guide Product Good service or idea consisting of a bundle of tangible and intangible benefits False T F A product must be tangible Customer focus product definition A product is anything that can be offered to a market that might satisfy a need Firm focus product definition The combination of goods and services offered by the firm Durable good Good that has a lifespan of several years and is not used up in a single use Non durable good Good that is consumable has a temporary lifespan and is used up in one or several uses Consumer products Products purchased for end use by the final consumer Convenience product Type of consumer product that is bought frequently quickly and with a minimum search effort Shopping product Type of consumer product that are less frequently purchased so consumers compare alternatives and devote time and effort to the purchase decisions Specialty products Type of consumer product that are highly appealing to a group of people who will go to great lengths to acquire them Unsought products Type of consumer product that people don t normally think about Industrial Business products Products purchased for end use by a business Materials and parts capital items supplies and services 4 categories of Industrial Business products Search goods Goods you can verify the quality before purchase Experience goods Goods for which you can only ascertain quality after use Credence goods Goods for which it is difficult to verify quality even after consumption Did the vitamins make you healthier Product item A specific product identified by an ordering code or its UPC Product line A group of closely related product items Product mix the complete set of product lines sold by a company Core product benefits Expected actual product benefits and Augmented product benefits 3 levels of product benefits Core product benefit Basic level of benefits that the product has to offer to fit into the product category Expected actual product benefits Benefits beyond the core benefits that consumers expect from the product often as a result of promises made by the company Augmented product benefits Benefits above and beyond what the customer expects and thus beyond what the competition provides Features Aspects that are built into a product attributes Benefits Refers to what a product does and what people get out of it Level of Quality and Consistency 2 dimensions of quality Style A product s surface level appearance Design How the product functions and is used Branding Identifies a seller s products or services differentiating them from competitors offerings Packaging Involves designing and producing a product s container and wrapper Labeling Identifies describes and promotes the product Quality Style and Design Components of product attributes Product attributes Branding Packaging Labeling Product support services 5 Types of product and service decisions Introduction Growth Maturity and Decline 4 Stages of the product life cycle Introduction Stage in the product life cycle characterized by slow growth as the market comes to accept the product Slow growth few suppliers of the product focus on promoting product Costs are high Price must remain low Not very profitable Characteristics of the Introduction stage in the product life cycle Growth Stage in the product life cycle characterized by rapid growth as lots of competitors enter the market Rapid growth lots of competitors Profits peak Characteristics of growth stage of product life cycle Maturity Stage in product life cycle characterized by slowing of growth Slowing of growth competitive shakeout profits decline firms cut prices Characteristics of the maturity stage of the product life cycle Competitive shakeout Firms decide to exit market and invest money elsewhere Happens at the beginning of the maturity life cycle Decline Stage in product life cycle characterized by a sharp decrease in sales Length and Shape 2 key dimensions of product life cycles Fad Product life cycle characterized by an abrupt increase in sales followed by an abrupt decrease in sales Fashions Product life cycle that tends to have sales that go up and down cyclically Slow starters Product life cycle that takes a long time before sales start to grow Product class life cycles Life cycles that describe an entire product category or industry Product form life cycle Life cycles that describe forms of a product within a class Brand product life cycle Life cycles that describe specific brands within a product form Product Manager Person responsible for managing the product and coordinating all of the marketing efforts for a product over its life cycle Brand Development Index A tool used to determine how well a firm s brand is performing in each geographic territory in which it sells BDI j Brand Sales in J Customers in J Brand Sales Nationally Customers Nationally X 100 Brand Development Index formula Sales in territory less than national average BDI 100 Sales in territory more than national average BDI 100 Category development index Measures how an entire product is performing in the market CDI j Category Sales in J Customers in J Category Sales Nationally Customers Nationally X 100 Category Development Index formula Category is doing better in territory than the national average CDI 100 Category is doing worse in territory than the national average CDI 100 Market not attractive CDI 100 Firm doing well in market but category is not Keep a close eye on market for signs of erosion CDI 100 Market is attractive but brand is underperforming Get aggressive find out why our product isn t performing well CDI 100 BDI 100 BDI 100 BDI 100 Brand and category are strong Invest to stay strong CDI 100 BDI 100 Market Penetration Market Development Product Modification Product Repositioning 4 Strategies for extending the product life cycle Market Penetration Strategy for extending the product life cycle that involves selling more of the product to the same or similar customers Market Development Strategy for extending the product life cycle that involves selling a product to a new market Product Modification Strategy for extending the product life cycle that involves changing a product to keep up with changes in consumer tastes Product repositioning Strategy for extending the product life cycle that involves changing the place a product occupies in people s minds Harvesting Continuing to sell a product at the end of its life cycle but reducing or eliminating marketing
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