Exam 3 Product Concepts 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 Example technological products Service an intangible result of application of human and mechanical efforts to people or objects hybrids Example Education Ideas concept philosophy image or issue Example Virtual space eBay o Be able to distinguish between consumer products and business product Consumer products purchased to satisfy personal and family needs and are classified according to how buyers generally behave when purchasing them Unsought products don t seek out impulse Convenience products gas station checkout Shopping products destination products Specialty products niche products Business products purchased to use for operations to resell or to use in manufacture of other products Business to business selling Business to consumer selling o Be able to explain the product hierarchy Core products the physical or intangible service that the customer receives what you re buying functionality Branded products the core products plus the characteristics that allow the consumer to differentiate it from similar products buying brand Augmented products have characteristics that enhance value beyond that of the core and branded product warranty 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 of the products a company sells Product lines consists of the closely related products marketed by an organization different kinds of Oreos Depth the number of items in a product line deep array Breadth the number of different lines that a company or SBU markets coke has sprite energy drinks PowerAde etc Extensions finding new segments extended life cycle of prpduct Product Life Cycle Modifications types of product life cycles Intro growth maturity decline o Be familiar with the product life cycle including the phases and the different Introductory Stage distribution Growth Stage Maturity Stage Decline Stage High failure rates little competition negative profits limited Increasing rate of sales entrance of competitors aggressive advertising of difference between brands prices normally fall Sales increase at decreasing rate lengthened product lines marginal competitors drop out prices profits fall Long run drop in sales large inventories of unsold items o Be able to explain how companies extend the PLC Selling to new segments Stimulate more frequent use Encourage more use per occasion Promoting more varied use o Be familiar with repositioning and improvements Repositioning Baking soda selling refrigerator deodorant Improvements modifications to formulas or service processes Wendy s changing 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 Ex Mercedes B Class lower price Mercedes down market Ex Hershey s up market Brand extensions product developed is not closely but should still be somewhat related to one or more products in existing product line Extending the brand Starbucks sells coffee ice cream and liquor Product modifications product modification means changing one or more of the products characteristics different from line extensions because the original product is removed from product line Old version doesn t stay in line Cost reduction quality modification products at a lower price products at same price at lower manufacturing costs Hamburger helper changed to lower price ingredients lower cost Functional modifications soup on the go tea on the go New Product Development o Understand the difficulty in developing new products and why they are so likely to fail and what percentage of new products fail Has to be something people want and need 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 What s the idea for the product 1 Idea Generation 2 Idea Screening 3 Concept analysis Filter out ones that aren t going to work Analyze concept in more specific way 4 Beta and Marketing Testing Test marketing focus groups prototype 5 Product launch o Know the 5 steps and order of the product adoption process 1 Awareness buyer becomes aware of product 2 Interest buyer seeks information and is receptive to learning about the product 3 Evaluation buyer considers products benefits and decides whether to try it 4 Trial buyer examines tests or tries the product to determine if it meets his or her needs 5 Adoption 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 1 Innovators first to adopt a new product 2 Early adopters choose new products carefully help spread word of mouth 3 Early majority adopt just prior to average person 4 Late majority skeptics who adopt new products when they feel it is necessary 5 Laggards last to adopt new product Branding and Packaging 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 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 Ralph Lifshitz Ralph Lauren symbol of a design FSU head Trademark a legal designation of exclusive use of brand FSU trademarks symbols 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 is unavailable Entry stage Preference buyer prefers product over competitive offerings Wouldn t go out of your way to chose it Insistence product is strongly preferred buyer will accept no substitute What companies want Diet coke at restaurant vs Diet Pepsi o Understand brand equity and what makes up brand equity Brand Equity the marketing and financial value associated with a brands strength in a
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