MAR3023 Exam 2 Review

University of Florida

product life cycle

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

Marketing Objectives

competition, product, price, place, promotion

Primary demand

Demand for the specific product class rather than the specific brand.

selective demand

preference for a specific brand

skimming strategy

A high initial product price

Penetration pricing

A low initial product price

Introduction Stage

Creating awareness for the product

Growth Stage

A rapid increase in sales

Maturity

A slowing of total industry sales or product class revenue

Decline

Occurs when product sales drop

Harvesting

When a company retains a product but reduces marketing cost

Diffusion of Innovation

a social science theory explaining how, why, and at what rate new ideas, products, or practices spread through a population or social system

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

IP Protected under the Lanham Act

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 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.

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.

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.

Mixed Branding

A 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.

Multibranding

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

multiproduct branding

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

Shopping Products

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

Convenience Products

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

specialty products

Items that the consumer makes a special effort to search out and buy.

unsought products

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

Continuous Innovation

consumers don’t need to learn new behaviors.

Dynamically Continuous Innovation

Only minor changes in behavior are required

Discontinuous Innovation

Making the consumer learn completely new consumption patterns to use the product.

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.

Open Innovation

Practices and processes that encourage the use of external as well as internal ideas and internal as well as external collaboration when conceiving, producing, and marketing new products and services.

Idea Generation

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

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

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

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

Market Testing

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

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

The Four I’s of Services

Intangibility

Inconsistency

Inseparability

Inventory

idle production capacity

Occurs when the service provider is available but there is no demand for the service.

service continuum

The range of offerings companies bring to the market, from the tangible to the intangible or the product-dominant to the service-dominant.

Credence properties

Characteristics that the consumer may find impossible to differentiate. Rely heavily on friends and family for information.

gap analysis

A type of analysis that compares the differences between the consumer’s expectations about and experiences with a service based on dimensions of service quality.

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.

Internal Marketing

The notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers.

capacity management

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

Receivers

Consumers who read, hear, or see the message sent by a source during the communication process.

Feedback

In the feedback loop, the sender’s interpretation of the response, which indicates whether a message was decoded and understood as intended during the communication process.

Response

In the feedback loop, the impact the message had on the receiver’s knowledge, attitudes, or behaviors during the communication process.

Advertising

Any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor.

Personal Selling

The two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision.

Public Relations

A form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services.

Publicity

A nonpersonal, indirectly paid presentation of an organization, product, or service. A perk of publicity is credibility

Sales Promotion

A short-term inducement of value offered to arouse interest in buying a product or service.

Direct Marketing

A promotion alternative that uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet.

The stage which sales promotions are most used

Maturity Stage

The stage which publicity are most used

Introduction Stage

The stage which advertising are most used

Growth Stage

Ancillary Services

supportive functions or secondary offerings that supplement a primary product, service, or core operation across different industries.

hierarchy of effects

1. Awareness

2. Interest

3. Evaluation

4. Trial

5. Adoption

Hierarchy of Effects

The sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action that includes awareness, interest, evaluation, trial, and adoption of the product.

percentage of sales budgeting

Allocating funds to promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold.

competitive parity budgeting

Allocating funds to promotion by matching the competitor’s absolute level of spending or the proportion per point of market share. Also called matching competitors or share of market.

all-you-can-afford budgeting

Allocating funds to promotion only after all other budget items are covered.

objective and task budgeting

The best approach, allocating funds to promotion whereby the company (1) determines its promotion objectives, (2) outlines the tasks to accomplish those objectives, and (3) determines the promotion cost of performing those tasks.

Pioneering Advertisements

Used in the introductory stage, they tell the consumer what the product is, what it can do and where it can be found

Competitive Advertisements

Persuade the target market to select the firm’s brand rather than that of a competitor.

Reminder Advertisements

Used to reinforce previous knowledge of a product

institutional advertisements

Advertisements designed to build goodwill or an image for an organization rather than promote a specific product or service.

Portfolio Tests

Used to test ad copy alternatives

Jury Tests

Showing the ad copy to a panel of consumers and asking how they liked it, how much it drew their attention and how attractive they thought it was

Theater tests

Consumers are invited to view new television shows or movies in which test commercials are also shown

consumer-oriented sales promotions

Sales tools used to support a company’s advertising and personal selling directed to ultimate consumers. Also called consumer promotions.

cooperative advertising

Advertising programs whereby a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products.

Publicity tools

Methods of obtaining nonpersonal presentation of an organization, product, or service without direct cost, such as news releases, news conferences, and public service announcements (PSAs).

order taker

Processes routine orders or reorders for products that were already sold by the company.

order getter

Sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers’ use of a product or service.

Personal Selling Process

Sales activities occurring before, during, and after the sale itself, consisting of six stages: (1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up.

Sales Plan

A statement describing what is to be achieved and where and how the selling effort of salespeople is to be deployed.

Account Management Policies

Policies that specify whom salespeople should contact, what kinds of selling and customer service activities should be engaged in, and how these activities should be carried out.

Which product is easily copied by opponents

Low Learning Products

Product Line Extension

The practice of using current brand name to enter a new market segment in its product class

Brand Extension

using a current brand name to enter a different product class

Which type of demand is used in the introduction stage

Primary demand

Three primary ways to manage a product in its life cycle

1. Repositioning the product

2. Modifying the market

3. Modifying the product

Product modification strategies include increasing a products

use

During the introduction stage sales are ________ and profit is ________.

growing slowly; minimal

Steps to building brand equity

1. Develop positive brand awareness.

2. Establish a brand's meaning in consumers' minds.

3. Elicit proper consumer responses to a brand's identity.

4. Create a consumer-brand connection.

The practice of marketing two or more brands together on the same package or promotion

cobranding

Support Product

Used to assist in producing other goods and services.

Product Mix

all of the product lines offered by an organization

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.

A version of a customer contact audit that includes all employee actions and acknowledges that services are designed to be "experiences."

service blueprint

In services marketing, netnography is the use of ________.

online information about consumer opinions, experiences, and behaviors in order to better understand service consumers

Used to encourage first time or repeat purchases

personal selling

Within an Integrated Marketing Communications (IMC) program, customizing communication with _________ results in improved attitudes and thus solidifies customer relationships.

direct marketing

field of experience

A mutually shared understanding and knowledge that the sender and receiver apply to the message so that it can be communicated effectively during the communication process.