MARKETING FINAL STUDY GUIDE!!!

product

good, service, or idea received in an exchange

consumer products

products purchased to satisfy personal and family needs

convenience products

relatively inexpensive, frequently purchased items

bread, soft drinks, gas

what are examples of convenience products?

shopping products

buyers are willing to spend more effort in planning and purchasing

appliances, bicycles, furniture

what are examples of shopping products?

specialty products

items with unique characteristics that buyers are willing to expend considerable effort to obtain

fine jewelry, limited-edition collector’s items

what are examples of specialty products?

unsought products

purchased to solve a sudden problem

emergency medical services, automobile repairs

what are examples of unsought products?

business products

products bought to use in an organization's operations, to resell, or to make other products

installations

facilities and non-portable major equipment

buildings, factories, production lines, very large machines

what are examples of installations?

accessory equipment

equipment that does not become part of the final physical product but is used in production or office activities

file cabinets, tools, calculators

what are examples of accessory equipment?

raw materials

natural materials that become part of final product

minerals, chemicals

what are examples of raw materials?

component parts

items that become part of the physical product and are either finished items ready for assembly or products that need little processing before assembly

spark plugs, breaks, tires

what are examples of component parts?

vehicles

what are most component parts part of?

process materials

materials used directly in the production of other products but are not readily identifiable

an ingredient in salad dressing

what is an example of a process material?

mro supplies

maintenance, repair, and operating items that facilitate production and operations but do not become part of the finished product

paper, pencils, cleaning supples, paints

what are examples of mro supplies?

business services

intangible products that many organizations use in their operations

financial services, marketing research services

what are examples of business services?

product life cycle

progression of a product through 4 stages: introduction, growth, maturity, and decline

introduction, growth, maturity, decline

what are the 4 product life cycle stages?

introduction stage

product's first appearance in the marketplace

initial price may be high to offset research and development costs

what is another point to note about the introduction stage?

growth stage

stage of a product's life cycle where sales rise rapidly and profits reach a peak and then start to decline

profits declining as more competitors enter the market, working to strengthen market share and emphasize product benefits

what is the growth stage categorized by?

maturity stage

stage of a product's life where sales curve peaks and start to decline as profits continue to fall

intense competition and competitors emphasizing improvements and differences in their version of the product

what is the maturity stage categorized by?

decline stage

stage of a product's life where sales fall rapidly

cutting promotional efforts when product is no longer earning a profit

what is the decline stage categorized by?

brand recognition, brand preference, brand insistence

what are the 3 degrees of brand loyalty

brand recognition

customer's awareness that the brand exists and is an alternative purchase

brand preference

degree of brand loyalty in which a customer prefers one brand over competitive offerings

brand insistence

degree of brand loyalty in which a customer STRONGLY prefers a specific brand and will accept NO substitute

RPI(recognition, preference, insistence)

how to remember the 3 degrees of brand loyalty?

brand equity

the marketing and financial value associated with a brand's strength in the market

brand-name awareness, perceived brand quality, brand loyalty, and brand associations

what are the 4 major elements of brand equity?

protects and preserves the product, prevents damage, and may even prevent tampering or deter shoplifting

what is the purpose of packaging?

reusable packaging

packaging can make the product more desirable through the use of ________

cost, consistency, promotional role, needs of retailers

what are the 4 major packaging considerations?

family packaging

using similar packaging for all of a firm's products or packaging that has one common design element

the right type of packaging for a new product can help it gain market recognition very quickly

how is packaging related to the marketing strategy of a business?

product mix

total group of products that an organization makes available to customers

width of product mix

number of product lines(horizontal)

depth of product mix

average number of different product items offered in each product line(vertical)

awareness, interest, evaluation, trial, adoption

what are the 5 stages buyers go through in accepting a product?

pricing objectives

goals that describe what firms want to achieve through pricing

form the basis for decision for other stages of the pricing process

why are pricing objectives important?

fixed costs

costs that do not vary with changes in the number of units produced

variable costs

costs that vary directly with changes in the number of units produced or sold

total cost

sum of average fixed and average variable costs times the quantity produced

survival

temporarily setting prices low in order to attract more sales

profit

goal is to maximize revenue, set at levels that owners and top-level decision makers view as satisfactory and attainable

return on investment

pricing to attain a specified rate of return on the company's investment

market share

product's sales in relation to total industry sales

cash flow

setting prices so they can recover cash as quickly as possible

status quo

pricing method focused on several dimensions such as maintaining a certain market share, meeting competitor prices, achieving price stability, or maintaining a favorable public image, can also reduce a firm's risk

demand-based pricing

pricing based on the level of demand for the product

where companies have a fixed amount of available resources that are perishable

in what industries is demand-based pricing appropriate?

competition-based pricing

pricing influenced by competitors’ prices

similar products, different brands

between what types of products will you see competition-based pricing?

geographic pricing, transfer pricing, and discounting

what are the 3 types of pricing for business markets?

geographic pricing

reductions for transportation and other costs related to the physical distance between buyer and seller

FOB origin

price does not include freight charges

FOB destination

price does include freight charges

transfer pricing

prices charged in sales between an organization's units

price skimming

charging the highest possible price that buyers who most desire the product will pay

novelty or because of the prestige/status that ownership offers

when will customers purchase high priced goods?

offsets R&D costs, hold down demand when production is limited

what are the benefits of price skimming?

makes product appear more profitable, potential to misjudge demand and face low sales

what are the dangers of price skimming?

penetration pricing

setting prices below those of competing brands to penetrate a market and gain a sufficient market share quickly

if product gains market share, could discourage competitors

what is a benefit of penetration pricing?

puts firm in less flexible pricing position and difficult to raise prices

what are 2 disadvantages of penetration pricing?

differential pricing

charging different prices to different buyers for the same quality and quantity of product

psychological pricing

strategies that encourage purchases based on consumers emotional responses

odd-number pricing

setting prices using odd numbers that are slightly below whole-dollar amounts

multiple-unit pricing

setting a single price for 2 or more units

reference pricing

pricing a product at a moderate level and positioning it next to a more expensive model or brand

bundle pricing

packaging together 2 or more complementary products and selling them for a single price

everyday low prices

setting a low price for products on a consistent basis

customary pricing

pricing on the basis of tradition

25 cent gumballs

what is an example of customary pricing?

price leaders

products priced below the usual markup, near cost, or below cost, expectation that customers will purchase other items as well

special-event pricing

advertised sales or price cutting linked to a holiday, season, or event, used to increase sales volume

comparison discounting

setting a price at a specific level and comparing it with a higher price

distribution and communication with customers

in what 2 parts of the supply chain does marketing have the most impact?

distribution

decisions and activities that make products available to consumers when and where they want to purchase them

supply chain

all the organizations and activities involved with the flow and transformation of products from raw materials through to the end customer

procurement

processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information

logistics management

planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption in order to meet customers' needs and wants

operations management

total set of managerial activities used by an organization to transform resource inputs into goods, services, or both

supply chain management

the coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer

procurement, logistics management, operations management

what does the supply chain typically consist of?

by increasing brand equity

how do marketing channels create utility?