marketing 10

product life cycle

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

two curves shown in the product life cycle

total industry sales revenue and total industry profit

trial

the initial purchase of a product by a consumer

primary demand

the desire for the product class rather than for a specific brand, since there are few competitors with the same product

selective demand

the preference for a specific brand

skimming strategy

high initial price to help the company recover the costs of development as well as capitalize on the price insensitivity of early buyers

penetration pricing

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

introduction stage

the PLC stage in which a new product is first distributed and made available for purchase

growth stage

the PLC stage in which a product's sales start climbing quickly, changes appear in the product, broadened distribution

products in the introduction stage

virtual reality devices and electric-powered automobiles

products in the growth stage

e-book readers and 3D printers

repeat purchasers

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

maturity stage

the PLC stage characterized by a slowing of total industry sales or product class revenue

products in the maturity stage

carbonated soft drinks and presweetened breakfast cereals

decline stage

stage of the product life cycle when sales decline and the product eventually exits the market

two strategies to handle a declining product

deletion and harvesting

deletion

dropping the product from the company's product line

harvesting

when a company retains the product but reduces marketing costs

three aspects of the product life cycle

(1) their length, (2) the shape of their sales curves, and (3) the rate at which consumers adopt products.

high learning product

significant customer education is required and there is an extended introductory period

low learning product

sales begin immediately because little learning is required by the consumer and the benefits of purchase are readily understood

fashion product

style of the times. Introduced, decline, and then seem to return.

fad product

experiences rapid sales on introduction and then an equally rapid decline

product class

the entire product category or industry

product form

pertains to variations of a product within the product class

diffusion of innovation

the process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters

five profiles of product adopters

innovators, early adopters, early majority, late majority, and laggards

innovators (2.5%)

venturesome, higher educated, use multiple information sources

Early Adopters (13.5%)

leaders in social setting, slightly above average education

Early Majority (34%)

deliberate, many informal social contacts

Late Majority (34%)

skeptical, below average social status

Laggards (16%)

fear of debt, neighbors and friends are information sources

common reasons for resisting a product in the introduction stage

usage barriers, value barriers, risk barriers, and psychological barriers

usage barriers

the product is not compatible with existing habits

value barriers

the product provides no incentive to change

risk barriers

physical, economic, or social

psychological barriers

cultural differences or image

product manager

also brand manager, manages the marketing efforts for a close-knit family of products or brands

CDI

category development index

BDI

brand development index

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 package

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

changing the place a product occupies in a consumer's mind relative to competitive products

trading up

involves 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

shrinkflation/downsizing

reducing the package content without changing package size and maintaining or increasing the package 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, shape, sound, or color), or combination of these used to distinguish a seller's goods or services

trademark

a symbol, word, or words legally registered or established by use as representing a company or product.

brand personality

a set of human characteristics associated with a brand name

types of brand personality

traditional, romantic, rugged, sophisticated, rebellious

brand equity

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

brand purpose

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

customer-based brand equity pyramid

/ Consumer-brand Connection \

/Consumer Judgments / Consumer Feelings \

/ Brand Performance / Brand Imagery \

/ Brand Awareness \

brand licensing

a contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiated fee

criteria for selecting a good brand name

-suggest the product benefits

-memorable, distinctive, and positive

-fit the product image

-have no legal or regulatory restrictions

-simple and emotional

-favorable phonetic and semantic associations in other languages

Multiproduct Branding Strategy

a branding strategy in which a company uses one name for all its products in a product class; family branding or corporate branding; makes product line extensions possible

subbranding

combines a corporate or family brand with a new brand, to distinguish a part of its product line from others

brand extension

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

co-branding

the practice of using the established brand names of two different companies on the same product

brand dilution

occurs when a brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold

multibranding strategy

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

fighting brands

chief purpose is to confront competitor brands

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 branding

Mixed Branding Strategy

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

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

benefits of packaging

communication, functional, perceptual

challenges packages and label designers face

continuing need to connect with customers; environmental concerns; health, safety, and security issues; and cost reduction

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.

roles price plays

1) to affect consumer perceptions and 2) to be used in capacity management

off-peak pricing

charging different prices during different times of the day or days of the week to reflect variations in demand for the service

public service announcement (PSA)

free and nonprofit groups tend to rely on these as the foundation of their media plan

capacity management

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

advertising plays a major role in the _____________ stage of the product life cycle, and __________________ plays a major role in the maturity stage

introduction; product differentiation

how do marketing executives manage a product’s life cycle?

modify product, modify market, reposition product

“creating a new use situation”

finding new uses or applications for an existing product

how do service businesses use off-peak pricing?

charge different prices during different days or days of the week to reflect variations in demand for the service