Swanson MKTG 330 Exam 3

Product

Everything, both favorable and unfavorable, that a person receives in an exchange
- more to exchange: not just physical, how were you treated when you bought the item
- good, service, idea

The core product

The product's fundamental utility or main benefit
- addresses the basic need of the consumer

Supplemental features

- provide the added value or attributes in addition to a product's core utility or benefit
- installation
- delivery
- training
- financing
- Helps differentiate one product brand from another

Convenience Products

consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort
- low cost
- needs to be everywhere
- mass marketing for brand awareness
- relies on self-service
- requires little research

Shopping products

consumer products and services that the customer compares carefully on suitability, quality, price, and style
- buyers expend more effort in planning and making purchases
- more research
- available substitutes
-

specialty products

consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
- willing to go anywhere to get it
- only product to satisfy a need

unsought products

consumer products that the consumer does not know about or knows about but does not normally think of buying
- no search
- price not important
- purchase compelled, impulse

Industrial Products

products purchased for further processing or for use in conducting a business
-to make a profit somehow

Product item

A specific version of a product that can be designated as a distinct offering among an organization's products
- individual items, different sizes

Brand

a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products and differentiates them from competitor's products.

Product Line

the number of product items in a product line
- depth: shallow or deep
- different product types
- doritos: nacho, cool ranch
a group of closely related product items
- multiple items form 1 brand

Product line extension

adding additional products to an existing product line in order to compete more broadly in the industry

Product Mix

all products that an organization sells

Product Mix width

the number of product lines an organization offers
- diversifies risk
- capitalizes on established reputations
- wide or narrow
- 16 different lines= wide

Manufacturer's Brand

the brand name of a manufacturer

Individual Branding

using different brand names for different products

Family Branding

marketing several different products under the same brand name

Brand Extension

when an organization uses one of its existing brands to brand a new product in a different product category

A positioning statement

a corporate statement that defines the benefit of your product/service to you target consumer, and states how you're different from you competitors.

Logo

A graphic mark or symbol commonly used by commercial enterprises, organizations and even individuals to aid and promote instant public recognition.

Packaging

a component of a product that refers to any container in which it is offered for sale and on which label information is conveyed.
- Contain + Protect
- Help promote the item
-facilitate storage + convenience

Brand Equity

the added value a brand name gives to a product beyond the functional benefits provided

Integrity of Brand

A brand is a promise. A promise to achieve certain results, deliver a certain experience, or act in a certain way. A promise that is conveyed by everything people see, hear, touch, taste or smell about your business.

Co-Branding

two or more well-known brands are combined with each other expecting the other brand name will strengthen purchase intentions

Private Brand

a brand name owned by a wholesaler or a retailer

Benefits of Branding (Consumer)

- Helps Identify Products
- Facilitates Evaluation
- Psychological Rewards

Benefits of Branding (seller)

- Exclusive Rights
- Premium Prices
- Facilitates new Introductions
- More trade leverage
- Encourages repeat purchases

Introduction stage

- High failure rates
- Little competition
- Frequent product modification
- Limited distribution
- High marketing and production costs
- Negative profits with slow sales increases
- Promotion focuses on awareness and information
- Intensive personal selling to channels

Growth stage

- Increasing rate of sales
- Entrance of competitors
- Market consolidation
- Initial healthy profits
- Aggressive advertising of the differences between brands
- Goal is Wider distribution
- prices normally fall
- Development costs are recovered

Maturity Stage

- declining sales growth
- saturated markets
- extending product line
- stylistic product changes: IPhone new colors
- heavy promotions to dealers and consumers
- marginal competitors drop out
- prices and profits fall
- niche marketers emerge
- growth peaks

Decline Stage

- long-run drop in sales
- large inventories of unsold items
- elimination of all nonessential marketing expenses

Product life cycle

the progression of a product through four stages
- introduction
- growth
- maturity
- decline
as a product moves through its life cycle, strategies must be periodically evaluated and possibly changed

Service Characteristics - Intangibility

Incapable of assessment by customers sense of taste, smell, feel, hearing, touch.

Service Characteristics - Inseparability

production + consumption occur simultaneously

Service Characteristics - Perishability

services are created as needed and cannot be stored

Service Characteristics - Heterogeneity

Each service is unique, making the creation of consistency a problem

Search Qualities

Tangible attributes (of a product) such as color, style, size, feel, or fit that can be judged before the purchase of a product

Experience Qualities

Attributes, such as taste, satisfaction, or pleasure, that can be assessed only during purchase and consumption of service

Credence Qualities

Attributes that customers may be unable to evaluate even after purchasing and consuming a service.

Reliability

Perform dependably and accurately

Responsive

Willingness to help customers and provide prompt service

Assurance

Ability to inspire trust and confidence

Empathy

caring, individualized attention

Tangibles

Appearance of physical facilities, equipment, personnel, and communications material

Service

An intangible product that often involves human or mechanical effort

Service Recovery

- resolve problems quickly
- provide a fair solution
- increase service recovery (the faster you respond, the better)
- listen to the customer

Listening to the customer

- customers get emotional over a service failure
- often customers just want someone to listen

Finding a fair solution

- distribute fairness
- procedural fairness

Acquisition

refers to the buying of a whole company, a patent, or a license to produce someone else's product

New Product Development

refers to the original products, product improvement, product modifications, and new brands developed from the firm's own research and developmen

New-product development process

the systemic search for new product ideas; involves developing a pool of concepts as candidates for new products
- idea generation
- idea screening
-concept test
- business analysis
- prototyping
- test marketing
- commercialization
- new product

Brainstorming

- Groups work together to generate ideas
- no idea can be immediately dismissed

Competitors products

"Me too" or copycat products

Customer Input

- as much as 85% of new business to business products come from customers
- lead users modify exiting products according to their own specific needs

Idea Screening

the first filter in the product development process, which eliminates idea that are inconsistent with the organization's mission, objectives, competitive advantage, and image or are inappropriate for some other reason

Concept test

refers to testing new-product concepts with groups of target customers
- no product- no service
- just the idea; brief written description of the product
- customer's reaction determine whether or not it goes forward
- triggers the marketing research process

Business Analysis

Involves specifying the product features and marketing strategy making necessary financial projections needed to commercialize a product

Product Development

the stage of the new-product process that involves turning the idea on paper into a prototype

Test Marketing

stage of the new-product process that involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy

Types of Tests

- standard test market
- controlled test market; don't want competitors to know what we are doing
- simulated test markets: advantages: less expensive, faster, restrict access by competitors. Disadvantages: not considered as reliable and accurate due to the controlled setting

commercialization

stage of the new-product process that involves positioning and launching a new product in full-scale production and sales
- when to launch; where to launch; planned market rollout

improving new- product success

New- product success depends on having
- unique superior product (one with higher quality, features, and value in use)
- Well defined product concept (a defined target market, product requirements, and benefits)

Getting Smart about new products

- ask your customers
- set realistic goals
- break down walls
- create gateways
- do your post- mortem

Supply Chain

Consists of a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users.

Supply Chain Management

the integration and organization of information and logistic activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to consumers.

Types of Intermediaries (Wholesalers)

- sell goods/services to those who buy for resale or business use.

Types of Intermediaries (Retailers)

- sell goods/services directly to final consumers for their personal, non-business use.

Agents

Represents either buyer or seller usually on permanent basis

Broker

Bring buyers and sellers together on a temporary basis

The Nature and Importance of Marketing Channels

From an economic view, intermediaries transform the assortment of products into assortments wanted by consumers.

Discrepancy of Quantity

The difference between the amount of product produced and the amount an end user wants to buy

Discrepancy of Assortment

The lack of all the items a customer needs to receive full satisfaction from a product or products.

Temporal Discrepancy

A situation that occurs when a product is produced but a costumer is not ready to buy it.

Spatial Discrepancy

The difference between the location of a producer and the location of widely scattered markets

Conventional Distribution Systems

Consists of one or more independent producers, wholesalers, and retailers. Each seeks to maximize its own profits, and there is little control over the other members and no formal means for assigning roles and resolving conflict.

Vertical Marketing System (VMS)

provide channel leadership and consists of producers, wholesalers, and retailers acting as a unified system and consists of

Corporate Vertical Marketing System

integrates successive stages of production and distribution under single ownership

Contractual Vertical Marketing System

Consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone.
- The most common form is the franchise organization

Franchise Organization

a business whereby the owner licenses its operations - along with its products, branding, and knowledge - in exchange for a franchise tag.

Administered Vertical Marketing System

Has a few dominant channel members without common ownership. Leadership comes from size and power.

Horizontal Marketing System

are when two or more companies at one level join together to follow a new marketing opportunity.
- Companies combine financial, production, or marketing resources to accomplish more than any one company could alone.

Disintermediation

Occurs when product or service producers cut out intermediaries and go directly to final buyers, or when radically new types of channel intermediaries displace traditional ones.

Intensive Distribution

Is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible.

Selective Distribution

Is a level of distribution density whereby a firm selects a few retail outlets in a specific geographical area to carry its products

Exclusive Distribution

Is a level of distribution density whereby only one retail outlet in a specific geographical area carries the firm's products.

Channel Power

The ability (usually held by the channel leader) to influence another channel member's goal achievement.
-Reward Based
- Derived from Coercion
-Legitimate Power
- Referent Power
- Expert Power

Channel Conflict

Arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goal.

Channel Conflict Examples

- Goal Incompatibility
- Role Incongruence
- Communication Breakdown
- Different Perceptions of Reality
- Great Dependence

Marketing Logistics

(physical distribution) involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet consumer requirements at a profit

Functions of Material Handling

- Receive goods into warehouse
- Identify, sort and label goods
- Dispatch the goods to temporary storage
- Recall, select, or pick the goods for shipment

Inventory Control System

A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer's or a customer's demand

Just-In-Time Concept (JIT)

an inventory supply system that operates with very low inventories and requires fast, on-time delivery

Physical Distribution

an integrated set of activities that deal with managing the movement of products within firms and through marketing channels

Transportation

Affects the pricing of products, delivery performance, and condition of the goods when they arrive

Logistics Information Management

The management of the flow of information, including customer orders, billing, inventory levels, and customer data.

Electronic Data Interchanges (EDI's)

Combines proprietary computer and telecommunication technologies to exchanges electronic invoices, payments, and information among suppliers, manufactures, and retailers.

Vendor Managed Inventory (VMI)

is an inventory-management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.

Reverse Logistics

A process of reclaiming recyclable an reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal