UF MAR3023 Exam 2

Product

a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value

Good

has tangible attributes that a consumer's five senses can perceive (ex: iPad); it may also have intangible attributes consisting of its delivery or warranties and embody more abstract concepts, such as becoming healthier or wealthier

Nondurable good

an item consumed in one or a few uses, such as food products and fuel

Durable good

one that usually lasts over many uses, such as appliances, cars, and mobile phones

Idea

a thought that leads to a product or action, such as a concept for a new invention or getting people to vote

Consumer products

products purchased by the ultimate consumer

Convenience products

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

Shopping products

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

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

Business products

products organizations buy that assist in providing other products for resale

Derived demand

sales of business products frequently result (or are derived) from the sale of consumer products

Components

items that become part of the final product (ex: raw materials or parts)

Support products

items used to assist in producing other goods and services

Product item

a specific product that has a unique brand, size, or price

Stock keeping unit (SKU)

a unique identification number that defines an item for ordering or inventory purposes

Product line

a group of product or service items that are closely related because they satisfy a class of needs, a used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range

Product mix

consists of all of the product lines offered by an organization

Continuous innovation

product that requires no new learning by consumers

Dynamically continuous innovation

product that disrupts consumer's normal routine but does not require totally new learning

Discontinuous innovation

product that requires new learning and consumption patterns by consumers

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

New-Product Process

the seven stages an organization goes through to identify business opportunities and convert them into salable products or services

New-product strategy development

defines the role for a new product in terms of the firm's overall objectives

Idea generation

involves developing a pool of concepts to serve as candidates for new products, building upon the previous stage's results

Open innovation

where an organization finds and executes creative new-product ideas by developing strategic relationships with outside individuals and organizations

Crowdsourcing

involves generating insights leading to actions based on massive numbers of people's ideas

Screening and evaluation

the stage that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort

Feasibility screen

internal approach where the firm's employees evaluate the technical feasibility of a proposed new product idea to determine whether it meets the objectives defined in the new-product strategy development stage

Concept test

external evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual product; more useful with minor modification of existing products rather than new, innovative products

Business analysis

specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections

Development

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

Market testing

the stage of the new-product process that involves exposing actual products to prospective customers under realistic purchase conditions to see if they will buy

Commercialization

the stage of the new-product process that positions and launches a new product in full-scale production and sales; most expensive stage

Parallel development

an approach where cross-functional team members who conduct the simultaneous development of both the product and the production process stay with the product from conception to production; helps speed up TtM

Fast prototyping

a "do it, try it, fix it" approach used in software development that encourages continuing improvement even after the initial design

Slotting fees

a payment a manufacturer makes to place a new item on a retailer's shelf; used in grocery products

Failure fee

a penalty payment a manufacturer makes to compensate a retailer for devoting valuable shelf space to a product that failed to sell

Product Life Cycle

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

Primary demand

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

Selective demand

the preference for a specific brand

Skimming

a pricing strategy where a company offers a high initial price to help it recover the costs of development as well as capitalize on the price insensitivity of early buyers

Penetration pricing

a pricing strategy to discourage competitive entry where a company prices low to help build unit volume; but, must monitor costs

Deletion

dropping the product from the company's product line

Harvesting

when the company retains the product but reduces marketing costs

High-learning product

products where significant consumer education is required and there is an extended introductory period

Low-learning product

products where the sales curve begins immediately because little learning is required by the consumer, and the benefits of purchase are readily understood; the product is also easily imitated by competitors, so marketers must broaden distribution quickly

Fashion product

products that are a style of the times; will be introduced, decline, and then return

Fad

products that experience rapid sales on introduction and then equally rapid decline

Product class

refers to the entire product category or industry, such as prerecorded music

Product form

pertains to variations within the product class

Diffusion of innovation

the way a product spreads through the population

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

Market modification

a company tries to find new customers, increase a product's use among existing customers, or create new use situations

Product repositioning

changes the place a product occupies in the mind relative to competitive products; can do this by changing one or more of the four marketing mix elements

Trading up

involves adding value to the product (or line) through additional features or higher quality materials

Trading down

involves reducing the number of features, quality, or price of a product

Downsizing

reducing the package content without changing package size and maintaining or increasing package price

Branding

using a name, phrase, design, symbols, or combination of these to identify a company's products and distinguish them from those of competitors; is a basic decision in marketing products

Brand name

any word, device (design, sound, shape or color), or combination of these used to distinguish a seller's goods or services

Trade name

a commercial, legal name under which a company does business

Trademark

identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use, thereby preventing others form using it

Brand personality

a set of human characteristics associated with a brand name; research shows that consumers assign personality traits to products (traditional, rugged, etc.) and choose brands that are consistent with their own or desired self-image

Brand equity

the added value a brand name gives to a product beyond the functional benefits provided; provides 1) a competitive advantage and 2) consumers are willing to pay a higher price for a product with brand equity

Brand licensing

a contractual agreement whereby one company (licensor) allows its brand name or trademark to be used with products or services offered by another company (licensee) for a royalty or fee

Multiproduct branding

a type of branding where a company uses one name for all its products in a product class (sometimes called family branding or corporate branding)

Multibranding

involves giving each product a distinct name

Private branding

used when a company manufactures products but sells them under the brand name of a wholesaler or retailer

Mixed branding

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

Product line extensions

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

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 pairing of two brand names of two manufacturers on a single product

Packaging

any container in which a product 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

Warranty

a statement indicating the liability of the manufacturer for product deficiencies

Magnussen-Moss Warranty/FTC Improvement Act (1975)

regulates the content of consumer warranties and so has strengthened consumer rights with regard to warranties

Services

intangible activities or benefits (such as airline trips, financial advice, or automobile repair) that an organization provides to satisfy consumers' needs in exchange for money or something else of value

Four I's of Services

intangibility, inconsistency, inseparability, and inventory

Idle production capacity

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

Service continuum

the range of product-dominant to service-dominant offerings for a company

Gap analysis

identification of the differences between the consumer's expectations and experience with a service offering; this type of analysis asks consumers to assess their expectations and experiences on dimensions of service quality such as reliability, tangibles, responsiveness, assurance, and empathy

Customer contact audit

a flowchart of the points of interaction between consumer and service provider

Seven P's of services marketing

includes the 4 P's of the marketing mix (product, price, place, and promotion), as well as people, physical environment, and process

Off-peak pricing

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

Internal marketing

based on the notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at consumers

Customer experience management (CEM)

the process of managing the entire customer experience with the company

Capacity management

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

Advertising

any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor

Product Advertisements

advertisements that focus on selling a good or service and which take three forms: 1) pioneering (or informational), 2) competitive (or persuasive), and 3) reminder

Pioneering advertisements

tell people what a product is, what it can do, and where it can be found (informational)

Competitive advertisements

promotes a specific brand's features and benefits (persuasive)

Reminder advertisements

used to reinforce previous knowledge of a product

Reinforcement advertisements

used to assure current users they made the right choice

Institutional advertisements

advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service

Fear appeals

appeals that suggest to the consumer that he or she can avoid some negative experience through the purchase and use of a product or service, a change in behavior, or a reduction in the use of a product

Sex appeals

appeals that suggest to the audience that the product will increase the attractiveness of the user

Humorous appeals

appeals that imply either directly or subtly that the product is more fun or exciting than the competitor's offerings

Reach

the number of different people or households exposed to an advertisement

Rating

the percentage of households in a market that are tuned to a particular TV show or radio station