Chapter 9 and 10 quiz notes

• **Apple III (1980)

• Apple Lisa (1983)

• Apple Newton (1987)

• Macintosh Portable (1989)**

Definition of Products and Services

Products

• Goods:

  • Nondurable: consumed quickly (e.g., food)

  • Durable: last over time (e.g., appliances)

• Services: Intangible activities leading to satisfaction.

• Ideas: Concepts leading to actions or new products.

Classification of Products

1. Consumer Products:

   • Convenience

   • Shopping

   • Specialty

   • Unsought

2. Business Products:

   • Components and support products

     • Installations (buildings, equipment)

     • Accessory equipment (tools, office supplies)

     • Supplies (maintenance items)

     • Industrial services (repair, maintenance)

Uniqueness of Services

Four I's of Services

• Intangibility: Cannot be seen/touched pre-purchase.

• Inconsistency: Quality varies based on service provider.

• Inseparability: Services are produced and consumed simultaneously.

• Inventory: Idle production capacity when service is available but unused.

Assessing Service Quality

Gap Analysis

• Compares customer expectations with actual experiences.

• Dimensions of service quality: Reliability, Tangibility, Responsiveness.

New Products and Success/Failure Factors

Definition of a New Product

• Newness Comparison:

  • Functionally different from existing products.

  • Revolutionary products can create new industries (e.g., smartphones).

Classification of New Products by Consumer Learning

• Continuous Innovation: No new learning required.

• Dynamically Continuous Innovation: Minor changes in behavior needed.

• Discontinuous Innovation: New learning and behavior required.

Reasons for New-Product Failure:

1. Insignificant differentiation

2. Flawed market and product protocols

3. Inadequate understanding of customer needs

4. Poor timing

5. Lack of market accessibility

6. Poor execution of marketing mix

7. Low product quality

New-Product Development Process

Seven Stages:

1. New-Product Strategy Development: Conduct SWOT analysis and define product strategy.

2. Idea Generation: Brainstorm internally and externally using employee suggestions, crowdsourcing, labs, and market research.

3. Screening and Evaluation: Use customer experience management and concept tests.

4. Business Analysis: Finalize financial projections and fit into business strategy.

5. Development: Create prototypes and conduct tests.

6. Market Testing: Test in real market conditions to gauge consumer response.

7. Commercialization: Full-scale launch and commercial production.

Examples of New Product Innovations and Failures

• Google Glass: Market test failures due to poor product execution.

• Research on GoPro products: Focuses on differentiation, target market, and innovative development processes to avoid common pitfalls.

Activity and Collaboration Methods

• Exercises like focus groups and “6-3-5” brainstorming can stimulate new ideas and assess product concepts efficiently.

Summary of Marketing Terms

• Product Class: Industry group (e.g., electronics, food).

• Product Item: Unique version of a product (SKU).

• Product Line: Closely related product items.

• Product Mix: Entire range of products offered by a company.

• Open Innovation: Utilizing both external and internal concepts in product development.

Conclusion

• Understanding product classifications, innovation processes, and quality assessments are essential for developing and marketing successful new products.

• Explain the product life cycle concept.

• Identify management strategies for a product’s life cycle.

• Recognize branding importance and alternative strategies.

• Describe packaging and labeling roles in marketing.

• Expand understanding of the four P’s in service marketing.

Product Life Cycle Concept

• Definition: The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.

• Each stage has distinct marketing objectives and actions.

Stages of the Product Life Cycle

Introduction Stage

• Objectives: Stimulate trial and create primary demand.

• Strategies:

  • Skimming pricing to recoup costs.

  • Penetration pricing to capture market share.

Growth Stage

• Characteristics: Rapid sales growth, increased competition, and peak profits.

• Focus on advertising for selective demand, new features, and broad distribution.

Maturity Stage

• Symptoms: Sales plateau, fewer new buyers, declining profits.

• Strategies: Product differentiation, improving quality, and brand loyalty.

• Examples: Soft drinks, breakfast cereals.

Decline Stage

• Outcomes: Industry and product sales drop, leading to price reductions.

• Strategies include product deletion or harvesting—cutting marketing costs but keeping the product available.

Three Aspects of the Product Life Cycle

1. Length of the life cycle.

2. Shape of the curve:

   • High-learning products require significant education.

   • Low-learning products have fewer barriers to adoption.

   • Fashion and fad products have different life cycles.

3. Difference between product class and form:

   • Product class: Entire category (e.g. prerecorded music).

   • Product form: Variations within a class (e.g. cassettes vs. CDs).

Role of Product/Brand Manager

• Responsible for managing product life cycle stages.

• Involved in new-product development and marketing program implementation.

• Utilizes marketing metrics like Category Development Index (CDI) and Brand Development Index (BDI).

Branding and Brand Management

• Definition of Branding: Marketing strategy involving a name, phrase, design, or symbols to distinguish products.

• Brand Equity: Added value a brand name provides beyond functional benefits.

• Brand Purpose: The rationale for the brand's existence and how it benefits society.

Picking a Good Brand Name

• Qualities:

  • Suggest product benefits.

  • Memorable, distinctive, positive.

  • Align with company image and avoid legal issues.

Branding Strategies

• Multiproduct Branding: One name for all products within a product class.

• Multibranding: Distinct names for each product targeting different segments.

• Private Branding: Products under a wholesaler’s name.

• Mixed Branding: Firm markets products under its own name and a reseller’s name.

Packaging and Labeling

• Definition: Packaging is any container that provides information about the product and its contents.

• Functions:

  • Communication: Provides information to consumers.

  • Functionality: Aids in storage and protection.

  • Perceptual: Builds brand image in consumer’s mind.

Challenges in Packaging and Labeling

1. Connection with customers through design and appeal.

2. Environmental Concerns: Reducing waste and eco-friendly packaging.

3. Health and Safety Issues: Ensuring product safety during storage.

4. Cost Reduction: Minimizing production costs while maintaining quality.

Services Marketing: The Seven P’s

1. Product: Intangible services need strong branding.

2. Price: Strategies like off-peak pricing to manage demand.

3. Place: Distribution strategies for services.

4. Promotion: Effective communication strategies for services.

5. People: Service delivery relies on human interaction.

6. Physical Environment: Influences customer perceptions of the service.

7. Process: Capacity management for service delivery.