Exam 3 Review Dr Mike Brady MAR 3023 Product Concepts Exam 3 Review Sheet o Products broadly defined as a good service idea or a combination of these o Be able to explain the difference between a good service and idea and recognize an example of each Good a tangible physical entity Services an intangible result of application of human and mechanical efforts to people or objects Idea concept philosophy image or issue o Be able to distinguish between consumer products and business product Consumer Purchased to satisfy personal and family needs and are classified according to how buyers generally behave when purchasing them Business Purchased to use for operations to resell or to use in manufacture of other products o Be able to explain the product hierarchy Core product the physical or intangible service that the customer receives Branded products are the core products plus the characteristics that allow the consumer to differentiate it from similar products Augmented products have characteristics that enhance value beyond that of the core and branded product o Be able to explain product management including product mix product line product line breadth and product line depth examples in the slides Product mix all the products a company sells Product line consists of the closely related products marketed by an Product line depth then number of products in a product line Product line breath The number of different lines that a company or SBU organization markets o Be familiar with the product life cycle including the phases and the different types of product life cycles Product life cycle Introductory stage Growth stage Maturity stage Decline stage Different types of PLC s High tech products Fads Styles fashion o Be able to explain how companies extend the PLC Promote more varied use ex dryer sheets on hats baking soda in fridge Selling to new segments ex Harley Davidson selling to women Stimulate more frequent use ex To go toothbrush Encourage more use per occasion ex McDonald s supersize o Be familiar with repositioning and improvements Repositioning changing what the company sells or does in order to be successful and to reach different markets ex arm and hammer baking soda Improvements Modifications to product formulas or service processes ex Wendy s fries o Understand the less risky alternatives to NPD what they are and why they are less risky Line extensions product developed is closely related to one or more successful products in existing product line but specifically designed to meet a somewhat different need Brand extensions product developed is not closely but should still be somewhat related to one or more products in existing product line Product modifications product modification means changing one or more of the product s characteristics different from line extensions because the original product is removed from product line Cost modification quality modification products at lower prices or products with the same prices but lower manufacturing costs Functional modifications changing or adding to the function of the product to go products in smaller size Heinz ketchup packets New Product Development 1 2 o Understand the difficulty in developing new products and why they are so likely to fail and what percentage of new products fail 80 of new products fail o 2 goals for NPD understanding NPD from 1 The firm s perspective 2 The customer s perspective o Know the 5 steps of developing a new product and their order Idea Generation seeking product ideas that will help them achieve their objectives Idea Screening the ideas with the best potential are selected for further review 3 Concept Analysis Seeking a sample of potential buyers responses to a product idea Focus groups who is the target market How much will it cost to produce How much will a consumer pay for it 4 Beta and Market Testing A limited introduction of a product in geographic areas chosen to represent the intended market 5 Product Launch Refining and finalizing plans and budgets for full scale manufacturing and marketing of a product o Know the 5 steps and order of the product adoption process Buyer becomes aware of the product Buyer seeks information and is receptive to learning about the Buyer considers product s benefits and decides whether to try it Buyer examines tests or tries the product to determine if it meets Buyer purchases the product and is expected to use it again whenever the need for this general type of product arises o Know and understand the 5 different types of product adopters and which ones a company would like to have as their customers First to adopt new product Innovators Early Adopters Early Majority Adopt just prior to average person Choose new products carefully help spread word of mouth 1 Awareness 2 Interest product 3 Evaluation 4 Trial his or her needs 5 Adoption Late Majority Laggards Skeptics who adopt new products when they feel it is necessary Branding and Packaging Last to adopt a new product o Brand a name term design symbol or other feature that identifies the marketer s product as distinct from other marketer s products o Understand overall why branding and packaging is so important remember Ralph Lifshitz Branding is very important because it is the face of one s company and what everyone will know one as Ralph Lifshitz is Ralph Lauren s real name o Understand what a Brand Mark is what a trademark is and the difference Brand mark The part of a brand that is not made up of words such as a symbol or design Trademark A legal designation of exclusive use of brand o Know the different levels of brand loyalty and think of an example of each for brands you purchase Recognition Buyer is aware that a brand exists and considers it as an alternative if the preferred brand unavailable Ex Choosing Pepsi at a restaurant that doesn t serve Coke products Preference Insistence Buyer prefers product over competitive offerings Ex Buying Sperry s boat shoes at full price instead of buying cheaper boat shoes from a less popular brand Product is strongly preferred buyer will accept no substitute Ex TeamiPhone o Understand brand equity and what makes up brand equity The marketing and financial value associated with a brand s strength in a market o Know the difference between family brands individual brands and private label brands as well as manufacturer brands vs store brands Family brands all the products are branded with the same brand name Kellogg s Frosted Flakes Kellogg s Rice Krispies
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