MKTG 345-Exam 3

Product

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.

total logistics cost

expense associated with transportation, materials handling, and warehousing, inventory, stockouts (being out of inventory), order processing, and return products.

vertical marketing systems

professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact

Reverse logistics

a process of reclaiming recycable and reusable meterials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal

multichannel marketing

the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online.

vendor managed inventory

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

Disintermediation

a source of channel conflict that occurs when a channel member bypasses another member and sells or buys products direct

Target profit pricing

Setting an annual target of a specific dollar volume of profit

bullwhip effect

the tendency for supply chain managers at different levels of the supply chain to exaggerate the need to increase or decrease inventory in response to variation or lack of predictability in consumer demand.

blockchain technology

a decentralized digital system for recording, documenting, and facilitating transactions across all participants in a supply chain

direct to consumer marketing channels

allow consumers to buy products by interacting with various print or electonic media without a face to face meeting with a salesperson.

target return on investment pricing

setting a price to achieve an annual target return on investment (ROI)

target return on sales pricing

setting a price to achieve a profit that is a specified percentage of the sales volume

loss-leader pricing

deliberately selling a product below its customary price, not to increase sales, but to attract customers’ attention to it in hopes that they will buy other products with large markups as well.

customary pricing

setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors

above-,at-, or below-market pricing

setting a market price for a product or product class based on a subjective feel for the competitors’ price or market price as the benchmark

capacity management

integrating the service componement of the marketing mix with efforts to influence consumer demand

off-peak pricing

changing different prices during different seasons of the year and different times of the day or during different days of the week to reflect variations in demand for the service.

Product form

pertains to variations of a product within the product class

Seven Ps of services marketing

an expanded marketing mix concept for services that includes the four Ps (product, price, promotion, and place or distribution) as well as people, physical environment, and process.

mixed branding

a branding strategy where a firm markets products under its own name(s) and that of a reseller because th sgement attracted to the reseller is different from its own market.

Product Class

refers to the entire product category or industry

brand purpose

the reason why a brand exists, the place it has in consumers’ lives, the solution it provides to consumers, the brand’s role in making society better off.

Service

Intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value.

Nondurable good

an item consumed in one or a few uses, such as food products and fuel.

Durable good

one that usually lasts over many uses, such as appliances, cars, and smartphones

Consumer products

Products purchased by the ultimate consumer.

Business products

Products organizations buy that assist in providing other products for resale. Also called B2B products or industrial products.

Convenience

Items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort.

Shopping products

Items for which the consumer compares several alternatives on criteria such as price, quality, or style.

Unsought products

Items that the consumer does not know about or knows about but does not initially want.

Derived demand

sales of business products are derived from the sale of consumer products

Product item

A specific product that has a unique brand, size, or price.

Product line

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

Consists of all product lines offered by an organization.

Protocol

A statement that, before product development begins, identifies (1) a well-defined target market; (2) specific customers' needs, wants, and preferences; and (3) what the product will be and do to satisfy consumers.

Marketing reasons for new product failures

insignificant point of difference, incomplete market and product protocol before product development starts, failure to satisfy customer needs on critical factors, bad timing, no economical access to buyers, poor execution of the marketing mix, too little market attractiveness, poor product quality.

New product development process

The seven stages an organization goes through to identify opportunities and convert them into salable products or services.

New-product strategy development (step 1)

The stage of the new-product development process that defines the role for a new product in terms of the firm's overall objectives.

Idea generation (step 2)

The stage of the new-product development process that develops a pool of concepts to serve as candidates for new products, building upon the previous stage's results.

Screening and evaluation (step 3)

The stage of the new-product development process that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort.

Business analysis (step 4)

The stage of the new-product development process that specifies the features of the product or service and the marketing strategy needed to bring it to market and make financial projections.

Development (step 5)

The stage of the new-product development process that turns the idea on paper into a prototype.

Market testing (step 6)

The stage of the new-product development process that exposes actual products to prospective consumers under realistic purchase conditions to see if they will buy.

Commercialization (step 7)

The stage of the new-product development process that positions and launches a new product in full-scale production and sales.

Product life cycle

Describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.

Skimming strategy

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product.

Repeat purchasers

people who tried the product, were satisfied, and bought again

Product deletion

dropping the product from the company's product line

Product harvesting

when a company retains the product but reduces marketing costs

Brand manager

manages the marketing efforts for a close-knit family of products or brand

Product modification

Involves altering one or more of a product's characteristics, such as its quality, performance, or appearance, to increase the product's value to customers and increase sales.

Product bundling

the sale of two or more separate products in one bundle

Market modification

Strategies by which a company tries to find new customers, increase a product's use among existing customers, or create new use situations.

Product repositioning

changes the place a product occupies in a consumer's mind relative to competitive producs

Trading up

Adding value to the product (or line) through additional features or higher-quality materials.

Trading down

Reducing a product's number of features, quality, or price.

Branding

A marketing decision in which an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors.

Brand name

Any word, device (design, sound, shape, or color), or combination of these used to distinguish a seller's products or services.

Trademark

identifies that a firm has legally registered its brand name or trade name

Brand personality

A set of human characteristics associated with a brand name.

Brand equity

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

Brand licensing

A contractual agreement whereby one company (licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another company (licensee) for a royalty or fee.

Multiproduct branding

A branding strategy in which a company uses one name for all its products in a product class.

Brand extension

the practice of using a current brand name to enter a different product class

Co-branding

the practice of pairing two or more strong brands to facilitate the marketing of a joint product or service

Multi-branding

A branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment.

Fighting brands

new products brands as defensive moves to counteract competition

Private branding

A branding strategy used when a company manufactures products but sells them under the brand name of a wholesaler or retailer. Also called private labeling or reseller (store) branding.

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.

Label

An integral part of the package that 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.

Price

The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service.

Barter

The practice of exchanging products and services for other products and services rather than for money.

Value

The ratio of perceived benefits to price; or Value = (Perceived benefits ÷ Price).

Value pricing

The practice of simultaneously increasing product and service benefits while maintaining or decreasing price.

Profit Equation

Profit = Total revenue − Total cost; or Profit = (Unit price × Quantity sold) − (Fixed cost + Variable cost).

Penetration pricing

Setting a low initial price on a new product to appeal immediately to the mass market.

Prestige

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.

Odd-even

Setting prices a few dollars or cents under an even number.

Bundle pricing

The marketing of two or more products in a single package price.

Standard markup pricing

Adding a fixed percentage to the cost of all items in a specific product class.

Cost plus pricing

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price.

Demand curve

A graph that relates the quantity sold and price, showing the maximum number of units that will be sold at a given price.

Price elasticity of demand

The percentage change in quantity demanded relative to a percentage change in price.

Elastic demand

a situation where consumers are highly responsive to price changes

Marketing channel

Consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.

Marketing Intermediaries

companies or individuals who assist producers in moving products and services from their origin to the final consumer

Intensive distribution

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

Exclusive distribution

A level of distribution density whereby only one retailer in a specific geographic area carries the firm's products.

Selective distribution

A level of distribution density whereby a firm selects a few retailers in a specific geographic area to carry its products.

Logistics

Those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.

Supply chain

The various firms involved in performing the activities required to create and deliver a product or service to consumers or industrial users.

Inelastic demand

when a consumer's demand for a good or service is not significantly affected by a change in its price

Total revenue

The total money received from the sales of a product.

Total cost

The total expense incurred by a firm in producing and marketing a product. Total cost is the sum of fixed cost and variable cost.

Fixed cost

the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold

Variable cost

expenses of a firm that vary directly with the quantity of a product that is produced and sold

Break-even point

the quantity at which total revenue and total cost are equal

Pricing objectives

Specifying the role of price in an organization's marketing and strategic plans.