MAR1011 Chapters 7-9

Product

Anything than can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or

Service

A form of product that consists of activities, benefits, or satisfaction offered for sale that are essentially intangible and do not result in the ownership of anything

Consumer product

Products and services bought by final consumers for personal consumption

Convenience product

Consumer products and services that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort

Shopping product

Less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and

Specialty product

Consumer products and services with unique characteristics or brand identifications for which a significant group of buyers is willing to make a special purchase effort

Unsought product

Consumer products that the consumer either does not know about or knows about but does not normally think of

Industrial product

Products purchased for further processing or for use in conducting a

Social marketing

The use of commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of

Product quality

Refers to the characteristics and features that determine a product's ability to meet customer needs and perform its intended function. Its two dimensions are level and consistency

Brand

A name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a particular product or service

Packaging

Involves designing and producing the container or wrapper for a product

Product line

A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges

Product mix

Consists of all the product lines and items that a particular seller offers for sale

Service intangibility

Services cannot be seen, tasted, felt, heard, or smelled before they are brought

Service Inseparability

Services cannot be separated from their providers, whether the providers are people or machines

Service perishability

Services cannot be stored for later sale or use

Service variability

The quality of services depends on who provides them as well as when, where, and how they are provided

Service profit chain

Consists of five links:

Internal service quality —> Satisfied and productive service employees —→ Greater service value —> Satisfied and loyal customers —> Healthy service profits and growth

Interactive marketing

Service quality depends heavily on the quality of the buyer-seller interaction during the service encounter

Internal marketing

The service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction

Brand equity

The different effect that knowing the brand name has on customer response to the product or its marketing

Store brand (Private brand)

When a retailer or wholesaler creates their own brand

Co-branding

When two established brand names of different companies are used on the same product

Line extension

Occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category

Brand extension

Extend a current brand name to new or modified products in a new category

New product development

The comprehensive process of creating, designing, planning, and launching a new product or service to market

Idea generation

The systematic search for new-product ideas

Crowdsourcing

When an organization invites broad communities of people into the new-product innovation process

Idea screening

The first idea-reducing stage. Helps spot good ideas and drop poor ones as soon as possible

Product concept

A detailed version of the idea stated in meaningful consumer terms

Concept testing

Testing new-product concepts with groups of target consumers.

Marketing strategy development

Involves designing an initial marketing strategy for a new product based on the product concept

Business analysis

Involves a review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's objectives

Product development

When R&D or engineering develops the product concept into a physical product

Test marketing

The stage at which the product and marketing program are introduced into realistic market settings

Commercialization

Involves introducing the new product into the market

Customer-centered new product development

Focuses on finding new ways to solve customer problems and create more customer-satisfying experiences

Team-based new product development

Company departments work closely in cross-functional teams, overlapping the steps in the product development process to save time and increase effectiveness

Product life cycle (PLC)

Describes the 5 stages (Product development, Introduction, Growth, Maturity, Decline) a product goes through from its initial development and introduction to the market until it's eventually withdrawn or declines.

Style

A basic and distinctive mode of expression

Fashion

A currently accepted or popular style in a given field

Fads

Temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity

Introduction stage

Starts when the new product is first launched

Growth stage

When sales begin to climb quickly

Maturity stage

Characterized by slowing product growth

Decline stage

When sales of a product or brand dip

Price

The sum of all the values that customers give up in order to gain the benefits of having or using a product or service

Customer value-based pricing

Uses buyers' perceptions of value, not the seller's cost, as the key to pricing

Good-value pricing

Offering just the right combination of quality and good service at a fair price

Value-added pricing

The strategy of attaching value-added features and services to differentiate a company's offers and thus support higher prices

Cost-based pricing

Setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk

Fixed costs (Overhead)

Costs that do not vary with production or sales level

Variable costs

Costs that vary directly with the level of production. Costs that vary with the number of units produced

Total costs

The sum of the fixed and variable costs for any given level of production

Cost-plus pricing (Markup pricing)

The simplest pricing method which consists of adding a standard markup to the cost of the product

Break-even pricing (Target return pricing)

When the firm tries to determine the price at which it will breakeven or make the target profit it is seeking

Competition-based pricing

Setting prices based on competitors' strategies, costs, prices, and market offerings

Target costing

Starts with an ideal selling price based on customer-value considerations, and then targets costs that will ensure that the price is met

Demand curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded by consumers

Price elasticity

How responsive demand will be to a change in price

Market-skimming pricing (Price skimming)

Setting high initial prices to "skim" revenues layer by layer from the market

Market-penetration pricing

Setting a low initial price in order to penetrate the market quickly and deeply--to attract a large number of buyers quickly and win a large market share

Product line pricing

When a company offers multiple products within a similar category at different price points, often based on features, quality, or target market

Optional-product pricing

Offering to sell optional or accessory products along with a main product

Captive-product pricing

When companies make products that must be used along with a main product

By-product pricing

When a company seeks a market for the by-products (incidental or secondary product) produced in the generation of some products and services

Product bundle pricing

When sellers combine several of their products and offer the complete compilation at a reduced price

Cash discount

A price reduction to buyers who pay their bills promptly

Quantity discount

Price reduction to buyers who buy large volumes

Functional discount (Trade discount)

Offered by the seller to trade-channel members who perform certain functions

Seasonal discount

Price reduction to buyers who buy merchandise or services out of season

Trade-in allowance

Price reductions given for turning in an old item when buying a new one

Promotional allowance

Payments or price reductions to reward dealers for participating in advertising and sales support programs

Segmented pricing

When a company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs

Psychological pricing

When sellers consider the psychology of prices and not simply the economics

Reference prices

An aspect of psychological pricing. Prices that buyers carry in their minds and refer to when looking at a given product

Promotional pricing

When companies temporarily price their products below list price and sometimes even below cost to create buying excitement and urgency

Dynamic pricing

Adjusting prices continually to meet the characteristics and needs of individual customers and situations