MKTG 409 Exam 3 Study Guide Lectures 17 24 Lecture 17 Chapter 12 Developing and Managing New Products Product line extensions development of a product that is closely related to existing products in the line but is designed specifically to meet different customer needs ex Triscuit adding new flavors to cracker lines or Kellogg s adding different flavors of cereal Phases of the new product development process o Kind of like a funnel each step eliminates products o Each step costs more than preceding step o Idea generation internal or external sources screening choosing most promising ideas for further review concept testing seeking potential buyers responses to product idea business analysis seeing how a new product will fir into the firm s sales costs and profits product development develop a prototype test marketing commercialization Test Marketing a limited introduction of a product in geographic areas chosen to represent the intended market used to make sure the product will not be a flop before it is widely released o Advantages exposes the product to the marketing environment and assesses its sales performance potential identifies weaknesses in the product or the marketing mix allows for experiments with variation in the marketing mix reduces the risk of failure o Disadvantages extremely expensive competitors may try to interfere or copy the product may be too heavily promoted before it is ready to be commercialized Lecture 18 Guest Lecturer Jackie Sierra district manager for Altria Altria parent company of Copenhagen Marlboro and Skoal Ranked 1 by Barron s in Top Performing Companies Challenges taxation responsible marketing declining cigarette use federal regulation Good businesses need innovation and leadership New product development line extension ex Wintergreen flavored or totally new product like Snus 5 P s of successful brand added presence to the ones we know Must continuously innovate or become obsolete Supported regulation aligned with societal values socially responsible company Lecture 19 Chapter 13 Supplement Great Service Service is a viable way to compete long term Great service differentiates your business solidifies customer relationships allows you to compete on value rather than price and is more profitable What do you do for your customers that they can t get elsewhere If your business failed would anyone care and why Value quality entertainment intangibles price time or value what I get what I pay Service leadership hire the right people emphasize the trust factor invest in employee success vision focus belief in coach rather than boss love of the business and integrity are required traits difference between keeping the job and excelling at it Build a service quality information system customer defines service quality transactional surveys of customers total market surveys employee surveys ask the right questions be willing to act on employee advice or explain why it s not feasible to do so Service strategy defines the company s reason for being Dimensions of service quality tangibles reliability underpromise and overdeliver responsiveness assurance do you know what you re doing empathy treat me as you want to be treated Reliability is considered most important as discussed in lecture Promises should be kept or the customer will not be happy Lecture 20 Great Service c d Reliability in service customers are buying a promise humans have good days and bad days so service will never be the same twice even if it s the exact same person at the exact same place o Separate personal life from service o Keep promises and homogenize quality Recovery second essential component of service Why Have to try to placate the people who didn t receive satisfactory service o Murphy s 6th Law if you see that there are four possible ways that something can go wrong and plan for these a fifth and unforeseen way will promptly develop o The Law of Divine Intervention All skill is in vain when an angel pees in the touchhole of your musket can t help it if some higher power decides you re screwed o Top 3 service complaints misplaced priorities lights on no one s home don t ask employees o Outcomes of dissatisfaction customer complains and is satisfied with recovery customer complains and is not satisfied or does not complain and remains dissatisfied most dangerous because the system still has the issue that upset the customer in the first place o Do the job right the first time but do it VERY right the second time to win customer back to your side Principles of recovery never argue with a customer you can t win make it easy to complain resolve quickly at the point of contact empower employees emphasize a fair solution repair the system Get the customer back and improve the system Fairness not the same as legality defined by the customer especially important for services the customer cannot see ex auto repair Reliability recovery fairness MUST HAVE Do awesome unexpected things for customers Spectrum of service adequate zone of tolerance and desired Ex Gallery Furniture no commissions everyone has a share same day delivery open 8 am 10 pm 7 days a week single location lots of advertising fun atmosphere customer friendly involved in community Chapter 14 Branding Branding terminology o Brand a name term design symbol or other feature that identifies the marketer s product from those of other marketers o Brand name the part of the brand that can be vocalized including letters words and numbers o Brand mark the part of a brand that is not made up of words such as a symbol or design o Trademark legal designation of exclusive use of brand o Trade name the full legal name of an organization Popular product the brand name can be metamorphosed into the product category if not trademarked ex band aids or aspirin Importance of branding o To buyers consumers identifies specific products reduces purchase time provides a form of self expression helps evaluate quality reduces perceived purchase risk offers potential psychological reward perceptions of products o To sellers marketers identifies the firm s products makes repeat purchasing easier so more profit assists in new product introduction assists in promotional efforts fosters brand loyalty increases profitability Brand loyalty a customer s favorable attitude toward a specific brand Degrees of brand loyalty o Brand recognition buyer is aware that the brand exists and considers it as an alternative if the preferred brand is not available o