CFMP Marketing Components 30% Flashcards
Define product
Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or a need. All banking services including checking and savings accounts, CDs, safety deposit boxes, online banking, cash management services, and loans our products.
Define product item
A specific version of a product
Define product expansion
The addition of a new product to an existing productline or of new product lines to an existing product mix. See also diversification.
Define product line
A group of products that have similar characteristics or serve related functions. In banking, the savings product line includes passbook, statement, and money market savings accounts.
Define product lifecycle
The successive stages of a product sales and profits. The four stages, which vary in length from product to product, include INTRODUCTION which provide slow sales growth and loss and profits, GROWTH which indicates rapid growth in sales and profitability, MATURITY which is a slowed sales growth rate and reduced profits, and DECLINE
Define product management organization
The assignment of an individual or department to be responsible for introducing, marketing, and ensuring profitable sales of a product or product line.
Define promotion mix
Do you need combination of for promotional activities: advertising, sales promotion, public relations, personal selling, that results in a profitable demand for products
Define promotion
Activities that communicate the availability of products or services to the target market to increase customer awareness and demand
Define public relations
A coordinated program of policies, conduct, and communication designed to foster goodwill and gain esteem from an organization’s Publics, which focuses on nonrevenue generating activity
Define publicity
Any form of unpaid communication about goods or services that informs and persuade consumers to buy. The media reports persuade Publicity at no cost to the seller because it is judged to have news or human interest value. As a result, consumers find publicity to be a more credible source of information then paid advertising. For the issuing organization, the disadvantage of publicity is the loss of control over how the information is edited, and when and where it appears.
Define product mix
The full range of products offered for sale by a company
Service packaging
The practice of marketing a group of services as a single product.
Define service
And intangible activity or benefit performed by a business that satisfies a customers need. In banking, this term is often used interchangeably with product.
The characteristics of services are intangibility, inseparability, variability, perishability.
Define marketing mix
The combination of four marketing activities: product development, pricing, promotion, distribution. These are aimed at satisfying demand in the target market.
What are the product lifecycle stages?
Introduction. Slow growth in sales as the product is introduced and the market becomes aware
Growth. Acceleration in sales as more people become aware and buy the product, competition enters the market
Maturity. The profitability of a product in the growth stage attracts intense competition as the maturity stage approaches maturity is characterized by its load rate of sales growth as many have already purchased it also by aggressive advertising to boost demand which booze costs and reduce his profit.
Decline. When the total sales of the product take a marked down turn.
What are the product mix strategies
Product expansion and contraction, product modification, repositioning, trading up or trading down.
What are the four product failures?
Failure to see the new product from the buyers viewpoint. Failure to research the needs of the market segments creatively. Failure to consider the degree of behavioral change required. Failure to communicate benefits clearly.
What are the eight objectives to consider when setting the price of a product
Survival: adjust price levels so that the firm can increase sales volumes to match expenses.
Profit: identify price and cost levels that allow the firm to maximize profit.
Return on investment: identify price levels that enable the firm to produce targeted ROI.
Marketshare: Adjust price levels so that the firm can maintain or increase sales relative to competitors sales.
Cash flow: set price levels to encourage rapid sales.
Status quo: identify price levels that help stabilize demand and sales.
Product quality: set prices to recover research and development expenditures and establish a high-quality image.
Image: the price should communicate an image.
Define price
What must be exchanged in return for receiving a good or service
Define price elasticity of demand
The degree to which demand for a product decreases as the price for it increases.
Define Price sensitivity
The degree to which changes in price will affect the demand for a product
A number of factors affect price sensitivity:
existence of close substitutes.
Consumer awareness of price differences.
Length of time a price difference persists.
Range of use.
Significance and frequency of purchase.
Nonprice benefits
Define skimming pricing
Setting a high initial price for a product to attract the cream of the market. Consumers who will buy regardless of the price.
Defined relationship pricing
Setting prices that provide an incentive for consumers to use multiple products
Define penetration pricing
Setting a low initial price in order to attract a large marketshare quickly
Behavior modification pricing
Setting a price that encourages consumers to alter their buying behavior
Encourages the customer to take certain actions to reduce the cost for the bank. For example, a bank in an ATM network pays interchange fees when the customer uses another banks ATM. Discourages customers from using other banks ATMs, a bank charges customers more to use other banks ATMs than their own.
Define repositioning
The implicit change of perception of product use, benefit, or value in the mind of the consumer
Define fully allocated cost
The change in expenses resulting from increased production or added services, including both incremental cost of each service and the fair share of indirect expenses and other fixed costs
Define early majority
Consumers who, unlike innovators and early adopters, are deliberate and cautious in their willingness to accept and use a new product before it has established mass appeal
Define early adopter
A consumer who, after innovators but before the early majority, accept and uses a new product before it has established mass appeal.
Define laggard
The relatively small number of consumers who are among the last to except and use a new product. Laggards tend to be from a lower socioeconomic standing, older, and more conservative.
Define late majority
Consumers who are likely to accept and use a new product only after the majority of the population has found it satisfactory.
Define innovators
The small number of consumers who are the first to accept and use a new product. Innovators tend to be younger and from higher socioeconomic groups.
Define new product development
The process of taking ideas for new or enhanced products and developing them into actual goods and services that can be sold profitably. The eight basic steps in this process include idea generation, screening out ideas that are not viable or likely to succeed, concept testing, a business analysis to forecast sales and profitability, product development including production of prototypes or samples forms procedures and programming modifications, test marketing to determine consumer acceptance, Introduction or commercialization of the new product, evaluation.
Define Pareto principle
The theory that states that 80% of a businesses profits come from 20% of its customers
Define value pricing
To set a price for a product based on perceived value to the consumer, not on the basis of its cost to the producer
What are some of the delivery channels for a bank
Bank branches, ATM, automated loan machine, telephone, Call Ctr., Internet, mobile banking, plastic cards, virtual Banks
Define advertising
Any form of communication paid by a sponsor for the purpose of informing and persuading the target market about products, services, organizations, or ideas. By using advertising an organization can control what is said about its products or services, and when and where the information appears.
Bank elasticity
The likelihood that customers will change banks in response to a change in the price of services
What is the AIDAS formula?
An acronym for the five successive stages of consumer responsiveness in the selling process. The letters of the acronym stand for attention, interest, desire, action, satisfaction.
