MAR3023 Exam #3 (Brady - FSU)

What is a Product?

Good, service, or idea (or combination)

What is a Good?

Tangible, physical entity

What is a Service?

Intangible, result of application of human and mechanical efforts to people or objects

What is an Idea?

Concept, philosophy, image, or issue

What are the 2 types of Products?

1. Consumer Products

2. Business Products

What are Consumer Products?

Purchased to satisfy personal and family needs, and are classified according to how buyers generally behave when purchasing them

What are some Sub-Types of Consumer Products?

Convenience Proudcts- inexpensive and frequent

Shopping Products- planned efforts to purchase

Specialty Products- have unique characteristics

Unsought Products- tow truck, emergency room, etc

What are Business Products?

Purchased to use for operations to resell, or to use in manufacturing of another product (this is MOST COMMON product type) (ex- installations, raw materials, business services, MRO supplies)

What are Core Products?

Physical or intangible good or service that the customer receives (ex- acetaminophen, cola, beer)

What is a Branded Product?

Core Product plus the characteristics that allow the consumer to differentiate from similar products (Tylenol, Coca-Cola, Blue Moon)

What are Augmented Products?

Characteristics that enhance value beyond that of core and branded products (Think of Starbucks with its "third place" or certain features that make a product better)

What is the Product Mix?

All of the products a company sells (such as all of P&G's products)

What are Product Lines?

Closely related products marketed by an organization (such as all of Oreo's Different flavors)

What is Product Line Depth?

Number of items in a product line (Coke has 8 diferent flavors, so their depth is 8)

What is Product Line Width?

Number of different Product Lines a company makes (Ex- Proctor and Gamble has detergent, tooth paste, soap, etc)

What are the 4 Stages of the Product Life Cycle?

1. Introduction (Low Sales, High Cost, No Profit)- high failure rates

2. Growth (Increased Sales, Decreased Costs, Some Profit)- entrance of competitors

3. Maturity (Constant Sales, Decreased Costs, Increased Profit)

4. Decline (Decreased Sales, Constant Costs, Decreased Profit)

Different types of Product Life Cycles

1. High-technology products (iPhones)

2. Fads (silly bands)

3. Styles or fashions (skinny ties)

What are the 4 way to Extend a Product Life Cycle?

1. Sell to New Segments

2. Stimulate more Frequent Use

3. Encourage More Use per Occasion

4. Promoting More Varied Use

Reposition and improvements

Modifications to product formulas or service (Arm & Hammer changing to baking soda)

What are Line Extensions?

Products developed closely related to one or more successful products in existing product lines but specifically designed to meet a somewhat different need (

What are some examples of Up Market Extension and Down Market Extension?

Down Market: Expensive good has affordable option (Ex- Mercedes B Class)

Up Market: Cheap goods have a luxury option (Ex- Premium kit kat bar or McDonalds making a $12 burger)

What are Brand Extensions?

Products developed is not closely but still somewhat related to one or more products in existing product line (Ex- Reese's sells Peanut butter or Starbucks selling ice cream)

What is a Product Modification?

Changing one or more characteristics of a product and STOPS sales of older version- DIFFERENCE BETWEEN THIS and EXTENSIONS(Ex- New Car Models)

What is a Functional Modification?

Changes impact versatility, effectiveness, convenience- requires redesign of product (Ex- New Heinz ketchup packets)

What percentage of new products fail?

80%

What are the two goals and perspectives for NPD?

1. The firm's perspective

2. The customer's perspective

What are the 7 steps of developing a new product?

1. Idea generation

2. Idea screening (think Shark Tank)

3. Concept testing (focus groups)

4. Business analysis

5. Development of physical product

6. Beta and Market testing (test markets)

7. Product launch

Product Adoption Process (buyer's perspective)

1. Awareness

2. Interest

3. Evaluation

4. Trial

5. Adoption

What are the 5 types of product adopters?

-Innovators

-Early adopters

-Early majority (companies want them)

-Late majority (companies want them)

-Laggards

Why is Studying Service Marketing Important?

Services are 75% of US GDP (this is a global trend)

What are the factors leading to service growth?

-Aging populations

-Increased leisure time

-High discretionary income

-Changing sociocultural values

What does a service include?

EVERY INTERACTION between any customer and anyone representing the company (there can never be a product w/o service)

What are the 4 Characteristics of a Service?

1. Intangibility- you buy a series before seeing/receiving the service, which differs from goods

2. Heterogeneity- services vary EVERY TIME, depending on location, employee, customer variance (unlike products)

3. Inseparability- Production and consumption happen simultaneously

4. Perishability- Service cannot be saved, and its unused capacity cannot be reserved nor inventoried (difficult for supply and demand)

Consumer Evaluation Processes

-search qualities: attributes a customer can determine before purchase

-Experience qualities: attributes a customer can only determine during or after consumption (restaurants, haircuts)

-Credence qualities: may be impossible to evaluate after consumption (legal/medical services)

What are the 3 Additional P's in the Expanded Service Marketing Mix?

1. People- "who"- human factors who play a role in service delivery, and influence buyer perception (employees)

2. Physical Evidence- "where"- ENVIRONMENT in which the service is provided, where the firm and customer interact, and any tangible components that facilitate performance or communication of the service (servicescapes)

3. Process- "how"- actual procedures, mechanisms, flow of activities by the services is delivered (service delivery and operating systems)

How does Satisfaction and Loyalty play a role in Service Marketing?

Satisfaction and Loyalty are directly correlated.

Loyalty leads to increased customer retention, positive word of mouth, higher willingness to pay, and overall INCREASED PROFITS.

What are the 5 Dimensions of Service Quality?

1. Reliability- ability to perform at promised time

2. Assurance- knowledge and courtesy in employee ability which inspires trust and confidence

3. Empathy- caring, individualized attention customers receive

4. Responsiveness- willingness to help customers and provided prompt service

5. Tangibles- appearance of physical facilities, equipment, written materials, and appearance of personnel

What is a Brand?

Name, term, design, symbol, or other feature that identifies the marketers product as distinct from other products

Why is branding so important?

Remember Ralph Lifshitz (Ralph Lauren)

What is a Brand Mark?

Design or symbol not made of words

What is a Trademark?

legal designation of exclusive use of brand (words, symbols, or even packaging)

What are Logos?

Mental shortcuts for the brand, often have hidden messages

What are the 3 Levels of Brand Loyalty?

1. Recognition- buyer is aware of brand and considered it as alternative if preferred brand is not available (Southern Tide)

2. Preference (Ralph Lauren)

3. Insistence- product is strongly preferred and will not accept substitute (Double Stuf Oreos)

** my examples, think of your own personal ones

What is Brand Equity and its 4 Components?

The value of a brand

1. Brand Name Awareness

2. Perceived Brand Loyalty

3. Brand Associations

4. Brand Loyalty

What are the 3 Branding Policies?

1. Family Brands (Heinz sauces)

2. Individual Brands (particular type of sauce)

3. Private Label Brands (store's generic sauces- Great Value)

Manufacturer vs. store brands

Most people believe the quality of store brand is same as the manufacturer (except for beverages)

What is Brand Stretching?

Using established brand in unrelated market (Ex- Yamaha makes motors, and now instruments too)

What is Co-Branding?

When two brands are represented together (ex- Hershey's and Betty Crocker's brownies)

What are Genericized Brands?

Company names represents entire product category (Kleenex, Zamboni, Band-Aid)

What are the Estimated Losses from Brand Counterfeits?

250-350 BILLION (ex- fake Louis Vutton or Ray Bans)

What is Packaging?

Development of container and graphic design for a product, which gets the customer's attention and sends signals about product attributes and quality

What Fraction of Decision Making is based on Packaging?

1/3

Why is packaging so important?

Getting it wrong can significantly hurt your sales (ex- Tropicana redesigning their package for a brief period)

What are the 5 Packaging Approaches?

1. Luxury Appeal- high quality bottle signifies high quality liquor

2. Green Washing- some use recycled paper, and will upcharge for it

3. Utility- stride gum has no tinfoil, butter with own knife

4. Space Saving- Noodles that have collapsable bowls

5. Space Taking- gray goose has a bottle so tall it has to go on top shelf

What is Supply Chain Management?

Ensure products are produced and distributed to the right customers and in the right quantities, to the right locations, at the time the customer needs them

What is a Distribution Channel?

People and firms that direct the flow of good from manufacturer to consumer within the supply chain

What are Logistics?

Involves the movement and storage of products from Manufacturer to Consumer

What is Operations Management?

Transforming raw materials into products

Why do we need intermediaries (retailers. wholesalers)?

We would shopping all day if not

What are the 4 Supply Chain Configurations?

1. Direct: Producer-Consumer

2. Retail: Producer-Retail-Consumer

3. Traditional: Producer-Wholesale-Retail-Consumer

4. Large Quantity Products: Producer-Agent/Broker-Wholesale-Retail-Consumer

What 3 Forms of Utility does Proper Supply Chain Management Provide?

1. Time Utility- having products WHEN customers want them

2. Place Utility- having products WHERE customers want to buy it

3. Form Utility- product is in quantity and package that best suits needs of customer-HOW

What are the implications of a Stockout?

21-43% will go to another store

25% will not buy good at all

Remainder find cheaper substitute

What is Multichannel Marketing?

When firms use several distribution channels to get products to consumers (store, website, mail order, vending machine)

What are the 3 Channel Strategies?

1. Intensive- convenience products such as Coke, Pringles, Duracell (available in many retail outlets)

2. Selective- shopping products such as iPods, TV's, Shoes (available in some outlets)

3. Exclusive- specialty products such as BMW's, Rolex, Versace (available in very few stores)

MUST MATCH BRAND

What is Channel Power?

Channel ,members ability to influence another channel members, (high channel power comes with low prices, favorable terms, and customized delivery)

Walmart has greatest channel power

What is Vertical Integration?

When one channel member expands to operate a new part of the channel (manufacturer such as Tommy Hilfiger opens retail shop)

What is a Vertical Marketing System?

Marketing channel that a single member coordinates which retains markups (GAP makes clothes and retails it)

What is Horizontal Integration?

Channel members at the same level acquire other channel members (airlines acquiring each other)

What is Physical Distribution?

Activities to move products from producers to consumers

What is Intermodal Transportation?

Integrated approach in which 2 or modes of transportation are used

Piggyback- trains and trucks

Fishyback- ships and trucks

Birdyback- planes and trucks

What is Radio Frequency Identification (RFID)?

Microchips in product containers to TRACK products and inventory levels

What is Just In Time?

Inventory management approach in which supplies arrive just when needed for production/resale

Avoids wasted inventory, associated with Toyota

What is Retailing?

2nd Largest Industry in US (90% are mom and pop shops but contribute 50% sales)

Leading Retailers: Walmart, Kroger, Costco, Home Depot, Walgreens

**Wholesale sells to retail

What is the Wheel of Retailing?

1. Outlet has low prices/margins/status

2. As time passes, outlet has higher prices/margins/status (MCdonalds becoming McCafe)

3. As more time passes, outlet has even higher prices/margins/status

4. New form of outlet enters retailing environment

What is the retail life cycle?

Increased market share and profit over time and then a slow decline after accelerated development and maturity

What are Big Box Retailers?

Wide variety of ice,s at discount prices

Includes:

General Merchandise- Target, Walmart, Kmart

Specialty Merchandise- limited to one market (Staples, Barnes & Noble)

What are Category Killers?

Big box retailers that focus on one category and make it hard for small business to compete

What are the 5 types of Retail Stores?

1. Department Stores (Macy's)

2. Discount Stores (Wal-Mart)

3. Off Price Stores (TJ Maxx)

4. Apparel Stores (The Gap)

5. Extreme Value Stores (Dollar Tree)

What is Franchising?

Using/leasing/buying the business model of a successful firm for a certain location AND certain time

What are Atmospherics?

The things that surround you in a retail environment, such as scent, music, and colors- contributes to the atmosphere and can affect sales

What are Slotting Fees?

Charge to manufacturers to have their products placed on shelves, end caps and higher spots sold at a premium

What is the Concept of Waiting Time?

Waiting time is last thing people remember, so managing wait time is critical. However, in certain businesses wait time has a positive impact (such as clubs)

What are Nontraditional retailers?

Mail, telephone, internet, catalogs, telemarketing, vending

What is the Future of Retailing?

Big box stores will shrink, and retail will be for touch and feel only, not actual purchase. 3D printers will change things, and cash will be reduced. Things will change a lot