MKTG 304 - Comprehensive Study Guide for Exam 2: Product Life Cycle Stages and Adoption

What happens in the development stage of the product life cycle?

-Firm preparing to launch product

-Negative revenue

-Zero sales

-Lots of money out, none in!

What are the different types of products?

Consumer and Business

What are some examples of consumer products?

- Convenience product, milk

-Shopping product, concert ticket

-Specialty product, car

-Unsought product, snickers bar

What are Business Products?

Products bought & used in organizational operations, to resell, or to make other products (raw materials and components)

What is the product item?

specific version of a product

What is the product mix depth?

number of versions offered of each product in the line

What are the five stages of the product life cycle?

-Development

-Introduction

-Growth

-Maturity

-Decline

What happens in the introductory stage of the product life cycle?

-Little competition

-High failure rates

-Limited distribution

-Frequent product modification

-High marketing & production costs

-Negative profits with slow sales increases

- Focus on creating awareness

-Stimulate primary demand

What happens in the growth stage of the product life cycle?

-Increasing rate of sales

-Increasing competition

-Market consolidation

-Initial healthy profits

-Aggressive advertising

-Wider distribution

What happens in the decline stage of the product life cycle?

-Long-run drop in sales

-Large inventories of unsold product

-Elimination of all nonessential marketing expenses

-"Organized abandonment"

What is the product adoption process?

awareness, interest, evaluation, trial, adoption

What is the interest stage of the product adoption process?

seeks information & is receptive to learning about product

What is the trial stage of the product adoption process?

examines, tests, or tries product to determine if it meets needs

How do products diffuse?

-Eliminating products from the product mix

-Culling weak products helps firm use resources more effectively /efficiently

-Slow sales, higher unit-production costs, inventory costs, & distribution costs

-Avoid customer negative feelings from affecting the company's other products

What happens in the business analysis part of the new product development?

Concerns:

-Is overall demand significant?

-Are costs reasonably low?

-Adequate firm sales forecast?

-Appropriate MKTG mix?

-Can the firm make a profit?

What happens in the test marketing part of the new product development?

-Introducing product on a limited basis to measure the extent to which potential customers will actually buy it

-Limited, sample launch of entire failure

-Reduces risk of larger market failure

-Expensive

What happens in the commercialization part of the new product development?

-Production

-Inventory Buildup

-Distribution Shipments

-Sales Training

-Trade Announcements

-Customer Advertising

What are the various types of brands?

-Generic: plain label, no advertising, no brand

-Manufacturers': owned by manufacturer, sold by others

-Private: owned by wholesalers & retailers

-Captive: sold exclusively by a retailer

-Family: brand unites/identifies relates products

-Individual: unique brand not grouped under family brand

-Brand extension: application of brand name to a new product

What is brand preference?

degree of partiality for one brand over another

What is brand recognition?

awareness that brand exist and is an alternative purchase

What happens in each stage of the new product development process?

What is a product?

-Anything received in an exchange to satisfy a need or want

-It may be tangible (a good), intangible (a service or an idea), or a combination of both

-It may include functional, social, and psychological utilities or benefits

What are Consumer Products?

Product purchased to satisfy personal & family needs.

What are some examples of business products?

-Installations

-Accessory equipment

-Raw materials

-Component parts

-Process materials

-MRO Supplies

-Business services

What is a product line?

group of closely- related product items

What is the product mix?

all products an organization sells

What is the product mix width?

the number of product lines an organization offers

What is the product life cycle?

-describes sales patterns over time

-standard in form, but variations occur

What happens in the maturity stage of the product life cycle?

-Saturated markets

-Sales increase at a decreasing rate

-Annual models appear

-Lengthened product lines

-Service & repair become important

-Heavy promotion to consumers & dealers

-Weak competitors drop out

-Niche marketers emerge

What is the awareness stage of the product adoption process?

customer must first become cognizant product exist

What is the evaluation stage of the product adoption process?

considers product's benefit & decides whether to try it

What is the adoption stage of the product adoption process?

purchases product, & can be expected to repeat purchase when need arises again

What are the types of adopters?

-Innovators

-Early adopters

-Early majority

-Late majority

-Laggards

What are the stages of new product development?

-idea generation

-idea screening

-business analysis

-development

-test marketing

-commercialization

What happens in the idea generation part of the new product development?

-Internal: marketing managers, researchers, sales personnel, engineers, etc.

-External: customers, competitors, ad agencies, consultants, etc.

What happens in the idea screening part of the new product development?

- First filter in product development process

-Concept test: assess buyer's likely responses to ideas

-Eliminate ideas inconsistent with the firm's new-product strategy

-Look at possible cannibalization issues

-Choose the most promising ideas for further review

-Firm capabilities to produce & market product

-Explore match with customer needs & and wants

What happens in the development part of the new product development?

-Can product actually be made?

-Prototype/ working model

-Test prototype's functionally

-Can product be mass produced?

-Determining product quality level

-Branding, packaging, labeling, promotion decisions

What is a brand?

-An identifying name, term, design, or symbol

-One item, family of items, or all items of a seller

How valuable are the leading brands?

What is brand loyalty?

favorable attitude toward a specific brand

What is brand equity?

the overall measure we use to characterize the strength and health of a brand

What is brand insistence?

strength of customer resolve to have a specific brand and no other

What are services?

-An intangible and perishable product offered by a provider

-Application of human and/or mechanical efforts directed at people or objects

How do services differ from goods?

Services are inseparable, perishable, intangible, and variable.

Goods are nonperishable, production & consumption separate, tangible, and standardized.

What are the key services attributes?

How does nonprofit marketing differ from for-profit marketing?

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