Marketing test 2

Product

The specific combination of goods, services, or ideas that a firm offers to consumers.

New-product development (NPD)

The process of conceiving, testing, and launching a new product in the marketplace.

New-product strategy development

The stage of new-product development in which the company determines the direction it will take when it develops a new product.

Idea generation

The stage of new-product development in which product concepts are generated to identify potentially viable new products.

Design thinking

An internal idea-generation process that encourages organizations to focus on the people they are creating products for.

Crowdsourcing

The practice of getting ideas by soliciting contributions from a large, online group of people rather than the traditional way of obtaining them from employees.

Open innovation

A way of generating new-product ideas by gathering both external ideas and internal ideas.

Idea screening

The stage of new-product development in which the firm evaluates ideas to determine their fit within the new-product strategy.

R-W-W strategy

A strategy used during idea screening that asks: Is it real? Can we win? Is it worth doing?

Business analysis

The process of analyzing a new product to determine its profitability.

Product development

The stage at which a firm determines that a good can be produced or a service can be offered in a way that meets customer needs and generates profits.

Test marketing

Introducing a new product in its final form to a geographically limited market to see how well the product sells and to get reactions from potential users.

Test marketing considerations

Testing takes time and costs money. The test market should mirror demographics, income levels, and lifestyles.

Product launch

Completing all final preparations for making a fully tested product available to the market.

Product launch considerations

When to launch and where to launch: a single location, region, national market, or international market.

Time to market

The speed with which a company launches a product.

New-category entries

Products that are new to a company but not new to the marketplace.

Product-line extensions

Products that extend and supplement a company's established product line.

Product line

A group of related products marketed by the same firm.

New-to-the-market products

Inventions that have never before been seen and create a new market.

Consumer adoption process

The stages consumers go through when deciding whether to adopt a product.

Stages of the consumer adoption process

Awareness, interest, evaluation, trial, adoption.

Diffusion

The process by which a product is adopted and spreads across various types of adopters.

Innovators

Consumers who adopt a product almost immediately after it is launched.

Early adopters

Consumers who purchase and use a product, but not as quickly as innovators.

Early majority

Consumers who gather more information and spend more time deciding whether to purchase.

Late majority

Consumers who rely on others for information or look to see whether others have already purchased.

Laggards

Consumers who dislike change and may remain loyal to an older product or technology.

Competitive advantage (innovation adoption)

The degree to which an innovation appears superior to existing products.

Compatibility

The degree to which an innovation fits the values and experiences of potential consumers.

Complexity

The degree to which an innovation is difficult to understand or use.

Trialability

The degree to which an innovation may be tried on a

Profit objectives

Pricing objectives focused on earning profits.

Return on Investment (ROI)

A profit objective based on the return earned on an investment.

Return on Assets (ROA)

A profit objective based on the return earned from a company's assets.

Managing for Long-Run Profits

A profit objective focused on achieving profitability over the long term.

Maximizing Current Profit Objective

A pricing objective focused on maximizing profits in the current period.

Target Return (Profit Goal)

A pricing objective in which a company sets prices to achieve a desired profit or rate of return.

Volume Maximization

Setting prices low to encourage a greater volume of purchases. Example: Amazon priced the Kindle Fire much lower than competitors’ tablets.

Survival Pricing

Lowering prices to the point at which revenue just covers costs, allowing the firm to survive during a difficult time. Example: Buick prices cars to break even in a highly competitive market.

Reference Prices

Prices that consumers consider reasonable and fair for a product. Example: Arizona Tea sells its tea for 99 cents, making other bottled teas seem expensive.

Underpricing

A strategy to avoid charging someone less than they are willing to pay. Example: Airlines charge more for last-minute flights because the expected value is greater.

Escalator Clause

A contractual agreement providing for price increases if specified conditions occur. It protects sellers from unreasonable financial hardship caused by uncontrollable factors. Example: A distributor can increase its price if fuel prices rise significantly.

Shrinkflation

When items shrink in size while prices remain the same or increase.

Odd Pricing

Setting a price a few cents below a dollar amount to create the feeling of receiving a deal. Example: $19.99 instead of $20.

Even Pricing

Setting prices at even dollar amounts to convey luxury or a non-discounted image. Example: $999 or $449.

Prestige Pricing

Pricing a product higher than competitors to signal that it is of higher quality.

Loss-Leader Pricing

Pricing products not to increase their own profit but to drive extra buying and sales of other related products.

Seasonal Discounts

Price reductions given to products or services during the off-season.

Price Bundling

Marketing two or more products together in a single price package, allowing customers to enjoy multiple options without making separate purchases.

Dynamic Pricing

Setting prices in real time based on supply and demand conditions. Example: Wasteless changes grocery prices as perishable items get closer to their expiration dates.

Name-Your-Own-Price Auction

A pricing method in which a consumer submits a bid at the maximum price they are willing to pay. A match is created if a seller is willing to sell at that price.

Grey Market

Selling branded products through legal but unauthorized distribution channels. Higher price in another country

Tariffs

Taxes on imports and exports between countries. They aim to protect domestic industries and typically lead to price increases on products in the affected category.

Dumping

When a company sells its exports to another country at a lower price than it charges for the same product in its domestic market.

Price Discrimination

Charging different customers different prices for the same product. It is illegal only if it injures competition. Example: Different prices for adults, seniors, and children.

Price Fixing

When two or more companies collude to set a product's price.

Predatory Pricing

Setting prices extremely low to attract a broad mass market and stifle competition.

Deceptive Pricing

Illegally and intentionally misleading customers with price promotions.

Brand

The name, term, symbol, design, or combination of these that identifies and differentiates a firm’s products.

Brand Loyalty

A consumer’s steadfast allegiance to a brand, shown through repeated purchases.

Brand Recognition

The degree to which customers can identify a brand under a variety of circumstances.

Brand Marks

Brand elements not expressed in words that consumers instantly recognize, such as a symbol, color, or design.

Brand Image

The unique set of associations that target customers or stakeholders make with a brand.

Brand Value

The total financial value of a brand.

Brand Equity

The value a firm derives from consumers’ positive perceptions of its products.

Differentiation

A brand’s point of difference.

Relevance

How appropriate a brand is to a consumer.

Esteem

How well regarded a brand is.

Knowledge

An intimate understanding of a brand.

Qualitative Research

Research that is particularly helpful in identifying the sources of brand equity and its role in consumer decisions.

Customer Equity

The value of customer relationships that a brand creates.

Customer Lifetime Value

The total amount a customer will spend from acquisition through the end of their relationship with a brand.

Choosing a Brand Strategy

Marketers should make sure the brand strategy aligns with the firm’s overall marketing strategy.

Brand Extension

The process of broadening the use of an organization’s current brand to include new products.

Brand Revitalization (Rebranding)

A strategy to recapture lost sources of brand equity, establish new sources of brand equity, and rebuild trust with consumers.

Co-Branding

A strategy in which two or more companies issue a single product to capitalize on the equity of each company’s brand.

Private-Label Brands (Store Brands)

Products developed by a retailer and sold only by that specific retailer.

Manufacturer Brands

Brands owned and managed by the manufacturer.

Packaging

All activities involved in designing and producing a product’s container.

Supply Chain

The linked set of companies that perform or support the delivery of a company’s goods or services to customers.

Push Strategy

A supply chain strategy in which a company builds goods based on a sales forecast, stores the goods, and waits for customers to order. It handles large volumes of products.

Push Strategy: Advantages

Can achieve economies of scale and improve customer service because goods are in stock.

Push Strategy: Disadvantages

Risks inaccurate sales forecasts, responds slowly to changes in demand, and has high inventory carrying costs.

Pull Strategy

A supply chain strategy in which customer orders drive manufacturing and distribution operations. Also called a responsive supply chain.

Pull Strategy: Advantages

Less risk of unwanted products, more customization, lower inventory carrying costs, and faster responses to market changes.

Pull Strategy: Disadvantages

Less ability to benefit from economies of scale; production and distribution must be flexible.

Pull Strategy Example

A customer ordering customized Nike shoes; the customer’s order drives production.

Hybrid (Push-Pull) Strategy

A supply chain strategy in which the initial stages operate on a push system, but product completion is based on a pull system.

Upstream Partners

Partners that supply the parts, raw materials, and information needed to produce a product or service.

Downstream Partners

Partners that look toward the customer and connect the firm to customers, including marketing channels.

Channel Level

A layer of intermediaries that performs work to bring a product and its ownership closer to the final buyer.

Direct Marketing Channel

A marketing channel with no intermediary levels.

Indirect Marketing Channel

A marketing channel with one or more intermediary levels.

Logistics

The part of supply chain management that plans, implements, and controls the flow of goods, services, and information between the point of origin and the final customer.

Logistics Operations

Supply chain functions that source materials and finished goods, warehouse and manage inventory, move products through supply chain stages, and distribute products to business customers or consumers.

Supply Chain Orientation

A management philosophy that guides company members to actively manage upstream and downstream flows of goods, services, finances, and information across the supply chain.

Supply Chain Orientation Example

Custom Floor Works shares supply and demand information with its cotton and wool suppliers and sewing manufacturers to manage made-to-order carpet orders more effectively.

Supply Chain Management

The actions a firm takes to coordinate the various flows within a supply chain.

Three Key Supply Chain Management Concepts

Resilience, logistics operations, and supply chain process integration.