Marketing Unit 6

Product

Product

anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want.

service

form of product that consists of activities, benefits, or satisfactions and that is essentially intangible and does not result in the ownership of anything.

Brand Equity

the differential effect that knowing the brand name has on customer response to the product or its marketing.

Brand Value

the total financial value of a brand.

Circles in logos

symbolizes friendship, care, and support.

Triangles in logos

symbolizes action, conflict, and tension.

Squares in logos

Symbolizes stability, honesty, and equality

Brand Mark

a unique symbol, coloring, lettering, or other design element. It is recognizable visually and does not need to be pronounced.

Trade Name

(or corporate brand) identifies and promotes a company or a division of a particular corporation.

Trade Character

brand mark that has human form or characteristics.

Brand Positioning

Refers to the process of developing a product or brand image in the consumer’s mind. Based on consumers’ perceptions of product features

Characteristics of a god brand name

• Suggests something about the product’s benefits (Lean Cuisine, Mop & Glo)

• Short and simple

• Easy to spell, read, and pronounce

• Pleasant sounding

• Distinctive and memorable

• Appropriate to new products that may be added to the line at a later date. •

• Legally available for use.

National Brands

are owned and initiated by national manufacturers or by companies that provide services, such as: coke, Tropicana, oreo

Private Distributor

developed and owned by wholesalers and retailers. The manufacturer’s name does not appear on the product.

Generic Brands

products that do not carry a company identity. They are generally sold in supermarkets and discount stores

Brand Liscensing

a legal licensing agreement for which the licensing company receives a fee, such as a royalty, in return for allowing another company to use its brand/brand mark/trade character

Co-Branding

combines one or more brands in the manufacture of a product or in the delivery of a service. It can also happen when two or more retailers share the same location.

Line Extension

Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category. This strategy’s risk is overextending a product line and diluting the brand with too many products. ALSO CALLED PRODUCT LINE FILLING

Brand Extension

Extending an existing brand name to new product categories. Extend a current brand name to new or modified products in a new category.

Mixed Brand strategy

They offer a combination of manufacturer, private distributor, and generic brands. For example, a manufacturer of a national brand might agree to make a product for sale under another company’s brand.

convenience(customer buying behavior)

Frequent purchase; little planning, little comparison or shopping effort; low customer Involvement

Shopping (customer buying behavior)

Less frequent purchase; much planning and shopping effort; comparison of brands on price, quality, and style

Specialty(customer buying behavior)

Strong brand preference and loyalty; special purchase effort; little comparison of brands; low price sensitivity

unsought(customer buying behavior)

Little product awareness or knowledge (or, if aware, little or even negative interest) not known abut unless you need it

Consumer products

products and services bought by final consumers for personal consumption.

4 Types of consumer products

Convenience products, Shopping products, Specialty products, Unsought products

industrial products

hose products purchased for further processing or for use in conducting a business.

Organization marketing

activities undertaken to create, maintain, or change the attitudes and behaviors of target consumers toward an organization.

person marketing

activities undertaken to create, maintain, or change the attitudes or behavior of target consumers toward particular people.

Place Marketing

activities undertaken to create, maintain, or change attitudes and behavior toward particular places.

social marketing

uses commercial marketing concepts to influence individuals’ behavior to improve their well-being and that of society

Product line

a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

Product Mix

all the product lines and items that a particular seller offers for sale.

Types of service industries

Government, Private not-for-profit organizations, Business organizations

4 service characteristics

Intangibility, variability, inseparability, and perishability

Intangibility(4 service characteristics)

services cannot be tasted, felt, heard, or smelled before purchase.

Variability(4 service characteristics)

quality depends on who serves then, when, where, and how.

Inseparability(4 service characteristics)

services cannot be separated from their providers.

Perishability(4 service characteristics)

services cannot be stores for later use or sale

Marketing strategies for service firms

Service-profit chain, Internal marketing, and Interactive marketing

Service-profit chain

links service firm profits with employee and customer satisfaction. (greater service quality leads to more satisfied and loyal customers)

Internal marketing

the service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction.

Interactive Marketing

service quality depends heavily on the quality of the buyer-seller interaction during the service encounter.

Managing service quality

enables a service firm to differentiate itself by delivering consistently higher quality than its competitors provide.

Managing service productivity

the cost side of marketing strategies for service firms.

Packaging

IS THE PHYSICAL CONTAINER OR WRAPPING FOR A PRODUCT.

Functions of packaging

• PROMOTING AND SELLING THE PRODUCT

• DEFINING PRODUCT IDENTITY (BRAND)

• PROVIDING INFORMATION (NUTRITION, INGREDIENTS)

• MEET CUSTOMER NEEDS-PACKAGE VARIATIONS

• ENSURING SAFE USE FOR CONSUMER

• PROTECT THE PRODUCT

Three Kinds of Labels

BRAND, DESCRIPTIVE, GRADE

Brand Label

GIVES THE BRAND NAME, TRADEMARK, OR LOGO. IT DOES NOT SUPPLY SUFFICIENT PRODUCT INFORMATION.

descriptive label

GIVES INFORMATION ABOUT THE PRODUCT’S USE, CONSTRUCTION, CARE, PERFORMANCE, AND OTHER FEATURES.

grade label

STATES THE QUALITY OF THE PRODUCT

FAIR PACKAGING AND LABELING ACT (FPLA) OF 1966

ESTABLISHED MANDATORY LABELING REQUIREMENTS.

THE FEDERAL NUTRITION LABELING AND EDUCATION ACT 994

REQUIRES THAT LABELS GIVE NUTRITIONAL INFORMATION ON HOW A FOOD FITS INTO AN OVERALL DAILY DIET.

FEDERAL TRADE COMMISSION ACT 1914

ESTABLISHED THE FEDERAL TRADE COMMISSION (FTC) TO MONITOR LABELS AND ADVERTISING FOR FALSE OR MISLEADING CLAIMS.

U.S. DEPARTMENT OF AGRICULTURE (USDA)

ISSUES LEGAL STANDARDS AND CERTIFICATION REQUIREMENTS FOR ORGANIC LABELS.

ASEPTIC PACKAGING

SEPARATELY STERILIZING THE PACKAGE AND THE FOOD PRODUCT, AND FILLING AND SEALING THE PACKAGE IN A STERILE ENVIRONMENT. CANNING AND BOTTLING ARE EXAMPLES OF THIS METHOD, WHICH KEEPS FOOD FRESH FOR UP TO SIX MONTHS.

Acquisition

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

New Product development

original products, product improvements, product modifications, and new brands developed from the firm’s own research and development.

Idea Generation

is the systematic search for new product ideas.

Internal sources

company’s own formal research and development, management and staff, and intrapreneurial programs.

External sources

refer to sources outside the company such as customers, competitors, distributors, suppliers, and outside design firms.

Crowdsourcing

inviting broad communities of people— customers, employees, independent scientists and researchers, and even the public at large—into the new product innovation process.

Product concept

is a detailed version of the idea stated in meaningful consumer terms.

concept testing

testing new product concepts with groups of target consumers.

Marketing strategy development

designing an initial marketing strategy for a new product based on the product concept.

Business analysis

review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives.

Test marketing

stage of new product development in which the product and its proposed marketing program are tested in realistic market settings.

commercialization

introducing a new product into the market.

product development

developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering.