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MKT 230: EXAM 2
Product |
is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value |
Consumer Products |
products purchased by the ultimate consumer |
1.) Convenience Products
2.) Shopping Products
3.) Specialty Products
4.) Unsought Products
|
Product Classifications |
Convenience Products |
are items that the consumer purchases frequently |
Shopping Products |
are items for which the consumer compares several alternatives on criteria such as price, quality or syle |
Specialty Products |
are items that the consumer makes a special effort to search out and buy |
Unsought Products |
are items that the consumer does not know about or knows about but does not initially want
|
Product Line |
is a group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range |
Product Mix |
all of the product lines offered by an organization |
New Product |
A product that is functionally different from existing products |
Continuous Innovation |
consumers don't need to learn new behaviors |
Dynamically Continuous Innovation |
only minor changes in behavior are required |
Discontinuous Innovation |
involves making the consumer learn entirely new consumption patterns to use the product |
1.) New-product strategy development
2.) Idea Generation
3.) Screening and evaluation
4.) Business analysis
5.) Development
6.) Marketing testing
7.) Commercialization |
New Product Strategy Development |
Product Life Cycle |
describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline |
Introduction Stage |
This stage occurs when a product is introduced to its intended target market |
Growth Stage |
This stage is characterized by rapid increases in sales |
Maturity Stage |
This stage is characterized by a slowing of total industry sales or product class revenue |
Decline Stage |
This stage occurs when sales drop |
Role of Competition |
Few: gain awareness
More: stress differentiation
Many: maintain brand loyalty
Reduced: harvesting deletion |
Branding |
is an organization that uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors |
They are able to recognize competing products by distinct trademarks, which allows them to be more efficient shoppers
|
How may customers benefit from branding? |
Brand Name |
is any word, device, or combination of these used to distinguish a seller's goods or services |
Brand Equity |
the added value a brand name gives to a product beyond the functional benefits provided
|
Brand Licensing |
is a contractual agreement whereby one company allows its brand names or trademarks to be used with products or services offered by another company for a royalty or fee |
1.) The name should suggest the product benefits
2.) The name should be memorable, distinctive, and positive
3.) The name should fit the company or product image
4.) The name should have no legal or regulatory restrictions
5.) The name should be simple |
Brand name selection process: |
Family Branding |
Also referred to as multiproduct branding, is a company that uses one name for all its products in a product class |
Co-branding |
the pairing of two brand names of two manufacturers on a single product |
Brand Extension |
the practice of using a current brand name to enter a different product class |
Multibranding |
involves giving each product a distinct name |
Private Branding |
also called reseller branding, when it manufactures products but sells them under the brand name of a wholesaler or retailer |
Packaging |
refers to any container in which it is offered for sale and on which label information is conveyed
|
Label |
is an integral part of the package and typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients
|
Services |
are intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value |
1.) Intangibility
2.) Inconsistency
3.) Inseparability
4.) Inventory |
The Four I's of Services: |
Intangibility |
services are this, they can't be held, touched, or seen before the purchase decision
|
Inconsistency |
is more of a problem with tangible goods |
Inseparability |
difference between services and goods, and related to problems of consistency
|
Inventory |
________ of services is different from that of goods |
The Purchase Process |
deal with many aspects of services that affect the consumer's evaluation of the purchase |
1.) Search properties
2.) Experience properties
3.) Credence properties |
Purchase Process properties for services include: |
Search Properties |
referred to as color, size, and style, which can be determined before purchase |
Experience Properties |
can be discerned only after purchase or during consumption |
Credence Properties |
also referred to as characteristics that the consumer may find impossible to evaluate even after purchase and consumption |
1.) Product
2.) Price
3.) Place
4.) Promotion
5.) People
6.) Physical Environment
7.) Process |
The seven Ps of services of marketing include: |
The Role of Pricing |
It's the place where all other business decisions come together. In the sense that customers must be willing to pay it; must generate enough sales dollars to pay for the cost of developing, producing, and marketing the product; and it must earn a profit for the company |
Price |
is the money or other considerations, exchanged for the ownership or use of a product or service
|
Non-Price Competition |
Competition involving the advertising of a products appearance, quality, or design, rather than it's price. |
Demand Curve |
is a graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price |
Movement along demand curve |
assumes that other factors remain unchanged on demand curve |
shift of demand curve |
where the demand curve literally shifts |
1.) Total cost
2.) Fixed cost
3.) Variable cost
4.) Unit variable cost
5.) Marginal cost |
Cost relationships include: |
1.) Demand oriented approaches
2.) Cost oriented approaches
3.) Profit oriented approaches
4.) Competition oriented approaches |
Select an approximate price level |
-Skimming
-Penetration
-Prestige
-Price lining |
Demand Oriented Approaches: |
-Standard markup
-Cost-plus
-Experience curve |
Cost-oriented Approaches |
-Target profit
-Target return on sales
-Target return on investment |
Profit-oriented approaches |
Customary
-Above, at, or below market
-Loss leader |
Competition-oriented approaches |
Company Effects |
One of the effects on pricing is a decision on the price of a single product must consider the price of other items in its product line or related product lines in its product mix |
Customer Effects |
One of the effects on pricing, is where marketers weigh factors heavily that satisfy the perceptions or expectations of ultimate consumers, such as the customary prices for a variety of consumer products |
Competitive Effects |
One of the effects on pricing, which is a manager's pricing decision is immediately apparent to the most competitors, who may retaliate with price changes of their own |
Marginal Analysis |
involves a continuing, concise tradeoff of incremental costs against incremental revenues |
1.) Discounts
2.) Allowances
3.) Geographical Adjustments |
Special adjustments to the list or quoted price |
-Quantity (cumulative/ noncumulative)
-Seasonal
-Trade
-Cash |
Discounts |
-Trade-in
-Promotional |
Allowances |
-FOB origin pricing
-Delivered pricing (single zone pricing, multiple zone pricing,FOB with freight-allowed pricing, basing point pricing) |
Geographical Adjustments |
1.) price fixing
2.) price discrimination
3.) deceptive pricing
4.) geographical pricing
5.) predatory pricing |
Legal and Regulatory aspects of pricing: |
Channel Functions |
1.) Transactional Function
2.) Logistical function
3.) Facilitating function
|
They help create value for consumers through the four utilities (time, place, form, and possession) |
Importance of marketing channels |
1.) Direct channel
2.) Indirect channel |
Marketing channels for consumer products/services |
Firms using direct channel maintain their own salesforce and perform all channel functions
Firms using indirect channel deal with one or more intermediaries between the producer and the industrial user |
Marketing channels for business products and services |
Multichannel marketing |
is the blending of different communication and delivering channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy traditional intermediaries and online |
strategic channel alliance |
a cooperative agreement between business firms to use the other's already established distribution channel |
Intensive Distribution |
this distribution means that a firm tries to place it products and services in as many outlets as possible |
Exclusive Distribution |
This distribution is where only one retailer in a specified geographical area carries the firm's products |
Selective Distribution |
Is a form of distribution that lies between these two extremes and means that a firm selects a few retailers in a specific geographical area to carry its products |
Dual distribution |
legal issue that can be viewed as anticompetitive in some situations |
Vertical integration |
a legal issue that is sometimes subject to legal action under the Clayton Act if it has the potential to less competition or foster monopoly |
Exclusive dealing |
Legal issue that exists when a supplier requires channel members to sell only its products or restricts distributors from selling directly competitive products |
Tying Arrangements |
Legal issue that occurs when a supplier requires a distributor purchasing some products to buy others from the supplier |
Full line forcing |
a legal issue that is a special kind of tying arrangement |
Supply-chain management |
is the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering products and services that provide value to consumers |
Supply chain management and marketing strategy |
The goals to be achieved by a firm's marketing strategy determine whether its supply chain needs to be more responsive or efficient in meeting customer requirements |
Logistics management |
is to minimize total logistics costs while delivering the appropriate level of customer service
|
1.) Time
2.) Dependability
3.) Communication
4.) Convenience |
Logistics management functions: (4) |
Retailing |
Includes all activities involved in selling, renting, and providing products and services to ultimate consumers for personal, family, or household use |
1.) Wells Fargo
2.) CarMax
3.) Ralph Lauren
4.) Sports Authority |
Major types of retail stores: |
Retailing Strategy |
Not only do producers and consumers meet through retailing actions, but retailing also creates customer value and has a significant impact on the economy |
Wholesaling |
All activities involeved in selling good and services to those buying for resale or business use. |