Marketing Final

product

• anything of value to consumer, offered through marketing exchange

• goods, services, places, ideas, organizations, people, communities

innovation

• process of ideas transformed into new products to help firm grow

why are there changing customer needs?

• create/deliver value more effective

• prevent boredom

• identify products customers didn’t know they need

• make product better

• protection of ideas, secrecy

• growing market = aging population

• legislation changes

market saturation

• value of firm will decline

• opportunity to adopt new process

• when in marketplace long time

managing risk through diversity

• broader portfolio enhance value

• withstand external shocks, changes in consumer preferences, and intense competitive activity

improving business relationships

• improve w supplier rather than consumer

• help supply missing products faster

• easy to develop new products

adoption of innovation

• diffusion of innovation: spread throughout market group over time

• rate which consumers likely to adopt new product

• identify potential markets, predict sales

pioneers/breakthroughs

• new-to-world products

• establish new market/radically change competition + consumer preferences

disruptive innovations

• simpler, less expensive than existing

first movers

• pioneers first to create market/product category

• most recognizable, have early commanding market share lead

• less marketing effort to create demand

• space for better products, lower prices, imitators can capitalize

reasons for high failure of new products

• fail to assess market, neglect testing, wrong target, poor positioning

• offer few benefits, too complex, require substantial learning/effort to use

• bad timing

• overextend abilities, inconsistent w brand image/value proposition

Adoption of Innovation Timeline Curve Cycle

• investors

• early adopters

• early majority

• late majority

• laggards

• predict customers, help develop effective promotion, price, marketing

innovators

• first to buy 2.5%

• take risks, not price sensitive, highly informed

• help market acceptance

early adopters

• less risk, wait for reviews 13.5%

• enjoy novelty, opinion leaders, spread word

opinion leader

• individuals who exert unequal influence on decisions of others because theyre knowledgeable

early majority

• make products profitable 34%

• dont take risks, wait for improvements

• peak no. of competitors

• best price + quality choices

late majority

• last to enter market 34%

• achieved full market potential

• sales level off/decline

laggards

• will not buy unless no choice 16%

• avoid change, rely on traditional

product diffusion factors

• relative advantage: perceived as better

• compatibility: customized based on consumer features

• observability: easily communicated (nature of product type)

• complexity + trialability: can try before buy

Product Life Cycle

• for strategic planning, differs for each product

• faster acceptance = faster life cycle

• cannot use to predict

• introduction

• growth

• maturity

• decline

introduction stage

• innovators start buying

• single firm, others follow viability

• initial loss, high start-up cost, low sales revenue

growth stage

• product gains acceptance

• increasing demand, sales, competitors, product versions, profit

• more segmented market, more preferences

• try to reach new consumers

industry shakeout

• exit market when fail to establish stronghold

maturity stage

• sales peak

• late majority purchasers

• intense competition for market share, saturated

• increasing marketing costs

• prices fall, profit margins decreases

• must rejuvenate, stay relevant, reposition, enter into new market, develop new, find new uses

decline stage

• exit market

• position for small niche segment of special needs/die-hard consumers

• laggards

complexity of products

• core customer value: basic benefits

• actual product: brand name, packaging, quality level, features/design

• associated services: financing, product warranty, product support

types of products

• for consumers or businesses

• specialty: strong preference, considerable effort to find best

• shopping: will spend time comparing alternatives

• convenience: not spend effort to evaluate, frequent/commodity

• unsought: do not know about

product mix

• all products offered by firm (breadth + depth)

product line

• group of associated items

• eg. oral care

product category

• items seen as reasonable substitutes

• same or different brands

• eg. toothpastes

brand

• name, design, symbol to identify good as distinct

product mix breadth

• variety (no. of product lines offered)

product line depth

• no. of product categories in each line

stock keeping units (SKU)

• individual items

• size, flavour, etc

• smallest unit for inventory control

• one universal product code per SKU (UPC)

category depth

• no. of SKU in each category

problem with too much variety

• costly to maintain

• dilute overall reputation

how can you change the product mix

• +/- from product line (breadth)

  • + capture new markets, increase sales

  • - address changing market, meet internal priorities

• +/- depth

  • address changing preferences, boost sales, preempt competitors

  • realign resources, eliminate unprofitable, refocus efforts

branding

• consumers mush know product exists

• differentiate from competitors

• logos, symbols, characters, slogans, jingles, packages

value of branding

• facilitate purchasing: easily recognize, signify quality, help quick decision

• establish loyalty: strong affinity/familiarity, will buy within product mix

• protect from competition: loyal, high quality can maintain high price

• reduce marketing costs: can spend less, sell itself, sponsorships, wordofmouth

• are assets: legally protected, counterfeits/unauthorized dealers won’t dilute

• impact market value: overall value of company

brand equity

• assets/liabilities linked to brand

• +/- value of product

• brand awareness, perceived value, brand associations, brand loyalty

brand awareness

• how many consumers in market familiar w brand

• what brand stands for, have an opinion

• more awareness = faster decision-making

• can dominate market = synonymous w product

• requires repeated exposure of brand elements

perceived value

• relationship bet