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TAMU MKTG 409 - Exam 3 Study Guide
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MKTG 409 Exam 3 Study Guide: Lectures: 17-24Lecture 17Chapter 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 processo Kind of like a funnel, each step eliminates productso Each step costs more than preceding stepo 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 releasedo 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 failureo Disadvantages: extremely expensive, competitors may try to interfere or copy theproduct, may be too heavily promoted before it is ready to be commercializedLecture 18Guest 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 companyLecture 19Chapter 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 happyLecture 20Great 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 placeo Separate personal life from serviceo Keep promises and homogenize quality- Recovery: second essential component of service. Why? Have to try to placate the people who didn’t receive satisfactory serviceo Murphy’s 6th Law: if you see that there are four possible ways that something cango wrong and plan for these, a fifth and unforeseen way will promptly developo 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-askemployeeso 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 placeo 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 fairsolution; 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 8am-10 pm 7 days a week, single location, lots of advertising, fun atmosphere, customer friendly, involved in communityChapter 14: Branding- Branding terminology:o Brand: a name, term, design, symbol, or other feature that identifies the marketer’s product from those of other marketerso Brand name: the part of the brand that can be vocalized, including letters, words,and numberso Brand mark: the part of a brand that is not made up of words, such as a symbol or designo Trademark: legal designation of exclusive use of brando 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 brandingo 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 productso To sellers/marketers: identifies the firm’s products, makes repeat purchasing easier (so more profit), assists in new product


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TAMU MKTG 409 - Exam 3 Study Guide

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