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Principles of Marketing > Ch. 10 M.K > Flashcards

Ch. 10 M.K Flashcards

1
Q

Classifying Products

A

Consumer Products

Business Products

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2
Q

Consumer Products

A

Products purchased to satisfy personal and family needs

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3
Q

Consumer Products:

A
  • Convenience Products
  • Shopping Products
  • Specialty Products
  • Unsought Products
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4
Q

Convenience Products

A

Relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort

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5
Q

Characteristics of Convenience products

A
  • Marketed through many retail outlets
  • Relatively low per-unit gross margins
  • Little promotional effort at the retail level
  • Packaging is important marketing mix element
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6
Q

Shopping Products

A

Items for which buyers are willing to expend considerable effort in planning and making purchases

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7
Q

Characteristics of Shopping products

A
  • Expected to last a long time; less frequently purchased
  • Do not have brand loyalty appeal
  • Require fewer retail outlets
  • Inventory turnover is lower
  • Gross margins are higher
  • More amenable to personal selling
  • Supported (servicing and promoting the product) by both the producer and channel members
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8
Q

Specialty Products

A

Items with unique characteristics that buyers are willing to expend considerable effort to obtain

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9
Q

Characteristics of Specialty Products

A

• Are preselected by the consumer
• Have no close substitutes or alternatives
• Are available in a limited number of retail outlets
• Purchased infrequently and represent a significant
and expensive investment
• Have high gross margins and low inventory turnover

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10
Q

Unsought Products

A

Products purchased to solve a sudden problem, products of which the customers are unaware, and products that people do not necessarily think about buying

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11
Q

Characteristics of Unsought products

A

• Speed and problem resolution of the utmost importance
• Price and other features not considered
• No consideration of substitutes
or alternatives
• Purchased infrequently

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12
Q

Business Products

A

Products bought to use in an organization’s operations, to resell, or to make other products(raw materials and components)

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13
Q

Business Products

A
  • Installations
  • Accessory Equipment
  • Raw Materials
  • Component Parts
  • Process Materials
  • MRO Supplies
  • Business Services
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14
Q

Installations

A

Facilities and non portable major equipment

• Ex. Office buildings, factories and warehouses, production lines, very large machines

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15
Q

Accessory Equipment

A

Equipment used in production or office activities

• Ex. File cabinets, small motors,
calculators, and tools

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16
Q

Raw Materials

A

Basic natural materials that become part of a physical product such as ores, water, lumber, grains, and eggs

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17
Q

Component Parts

A

Items that become part of the physical product

•	Finished items ready for assembly
•	Items needing little processing 
before assembly
•	Computer chips, engine blocks, 
girders, and paints
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18
Q

Process Materials

A

Materials that are not readily identifiable when used directly in the production of other products such as screws, knobs, and handles

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19
Q

MRO Supplies

A

Maintenance, repair, and operating items that facilitate production and do not become part of the finished product such as cleaners, rubber bands, and staples

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20
Q

Business Services

A

The intangible products that many organizations use in

their operations such as cleaning, legal, consulting, and repair service.

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21
Q

Product Line and Product Mix

A
  • Product Item
  • Product Line
  • Product Mix
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22
Q

Product Item

A

A specific version of a product

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23
Q

Product Line

A

A group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations

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24
Q

Product Mix

A

The total group of products that an organization makes available to customers

Width of product mix
• The number of product lines a company offers

Depth of product mix
• The average number of different products in each product line

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25
Q

The four stages of the product life cycle

A

Introduction stage
Growth stage
Maturity stage
Decline stage

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26
Q

Introduction

A

The initial stage of a product’s life cycle—its first appearance in the marketplace—when sales start at zero and profits are negative

Why new products fail
• Lack of resources, knowledge, and marketing skills to successfully launch the product
• High pricing to recoup research and development costs

27
Q

Growth

A

The stage of a product’s life cycle when sales rise rapidly and profits reach a peak and then start to decline

  • More competitors enter the market
  • Product pricing is aggressive
  • Brand loyalty becomes important
  • Gaps in market coverage are filled
  • Promotion expenditures moderate
  • Production efficiencies lower costs
28
Q

Maturity

A

The stage of a product’s life cycle when the sales curve peaks and starts to decline and profits continue to fall

  • Intense competition
  • Emphasis on improvements and differences in competitors’ products
  • Weaker competitors lose interest and exit the market
  • Advertising and dealer-oriented promotions predominate
  • Distribution sometimes expands to the global market

Strategic objectives for maturity stage

  • Generate cash flow
  • Maintain market share
  • Increase share of customer
29
Q

Decline

A

The stage of a product’s life cycle when sales fall rapidly

  • Pruning items from the product line
  • Cutting promotion expenditures
  • Eliminating marginal distributors
  • Planning to phase out the product

Strategic choices

  • Harvesting the product’s remaining value
  • Divesting the product when losses are sustained and a return to profitability is unlikely
30
Q

Product Adoption Process

A

The stages buyers go through in accepting a product

Awareness
Evaluation
Trial
Adoption

31
Q

Awareness

A

The buyer becomes aware of the product

o Interest: The buyer seeks information & is receptive to learning about the product

32
Q

Evaluation

A

The buyer 4considers the product’s benefits & decides whether to try the product

33
Q

Trial

A

The buyer examines, tests, or tries the product to determine if it meets his/her needs

34
Q

Adoption

A

The buyer purchases the new product & can be expected to use it again whenever the need for this general type of product arises

35
Q

Reasons for Product Failure

A

o Product’s value or features did not match customer needs
o Ineffective or inconsistent branding that failed to convey the right message or image to customers
o Technical or design problems
o Poor market timing
o Overestimation of market size
o Ineffective promotion
o Insufficient distribution

36
Q

Branding: Key Terms

A
  • Brand
  • Brand Name
  • Brand Mark
  • Trademark
  • Trade Name
37
Q

Brand

A

An identifying name, term, design, or symbol

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

• Ex. Corvette, Chevrolet, General Motors

38
Q

Brand Name

A

The part of a brand that can be spoken

Words, letters, numbers

• Ex. Union 76, NBA, 49’ers

39
Q

Brand Mark

A

The part of a brand not made up of words

Symbols or designs

• Nike swoosh, Mercedes star, McDonald’s arches

40
Q

Trademark

A

A legal designation of exclusive use of a brand

• Coca-Cola®, Hewlett-Packard®

41
Q

Trade Name

A

Full legal name of an organization

• American Telephone and Telegraph Corporation (AT&T)

42
Q

Requirements of an Effective Brand Name

A

Effective Brand Name:

Easy to say
Easy to spell
Easy to recall
Communicates product benefits
Suggests users or special features
Distinctive
43
Q

Value of Branding for Consumers

A

o Helps speed consumer purchases by identifying specific preferred products
o Provides a form of self-expression and status
o Evaluates product quality to reduce the risk of purchase

44
Q

Value of Branding for Marketers

A

o Identifies and differentiates a firm’s products from competing products
o Helps in the introduction of new products
o Facilitates the promotion of all same-brand products
o Fosters the development of brand loyalty
o Can create valuable intangible assets

45
Q

Major elements of Brand Equity

A

Brand name awareness
Perceived brand equity
Brand loyalty
Brand association

46
Q

Types of Brands

A
  • Manufacturer Brands
  • Private Distributor Brands
  • Generic Brands
47
Q

Manufacturer Brands

A

Brands initiated by producers

48
Q

Private Distributor Brands

A

Brands initiated and owned by resellers

• Ex. Dealer brands, private brands,
store brands

49
Q

Generic Brands

A

Brands indicating only the product category

50
Q

Branding Policies

A
  • Individual Branding
  • Family Branding
  • Brand-Extension Branding
51
Q

Individual Branding

A

o A policy of naming each product differently

o Avoids stigmatizing all products due to a failed product

52
Q

Family Branding

A

o Branding all of a firm’s products with the same name

o Promotion of one item also promotes all other products

53
Q

Brand-Extension Branding

A

o Using an existing brand name for an improved or new product
o Provides support for new products through established brand name and image

54
Q

Branding Policies

A
  • Individual Branding
  • Family Branding
  • Brand-Extension Branding
55
Q

Individual Branding

A

o A policy of naming each product differently

o Avoids stigmatizing all products due to a failed product

56
Q

Family Branding

A

o Branding all of a firm’s products with the same name

o Promotion of one item also promotes all other products

57
Q

Brand-Extension Branding

A

o Using an existing brand name for an improved or new product
o Provides support for new products through established brand name and image

58
Q

Co-Branding

A
  • Using two or more brands on one product to capitalize on the brand equity (customer confidence and trust) of multiple brands
  • Brands involved must represent a complementary fit in the minds of consumers.
  • Helps differentiate a firm’s product from those of its competitors
  • Helps take advantage of distribution capabilities of co-branding partners
59
Q

Brand Licensing

A

An agreement whereby a company permits another organization to use its brand on other products for a licensing fee

Advantages
o Low-cost and/or free publicity
o Revenues from royalty fees

Disadvantages
o Lack of manufacturing control
o Creating too many unrelated products
o Licensing arrangements can fail

60
Q

Packaging

A

Involves the development of a container and a graphic design for a product

61
Q

Packaging Functions

A 
o	Protect the product from damage
o	Offer convenience to consumers
o	Prevent waste and make storage easier
o	Promote the product by communicating 
its features, uses, benefits, and image
62
Q

Major Packaging Considerations

A

Promotional Role (Informing the Consumer)
o Verbal and nonverbal symbols
o Size, shape, texture, color, and graphics

Reseller Needs
o Transportation, storage, and handling

Environmentally Responsible
o Biodegradable and recyclable

63
Q

Criticisms of Packaging

A

Lack of functionality
o Leak, difficult to open/close/seal, hard-to-use designs

Safety
o Sharp edges, broken glass, health hazards

Deceptive
o Shape, size, colors mask true nature of product

Cost of packaging
o What customers prefer is costly

64
Q

Purpose of labeling

A

Help identify the product
• Display brand name and unique graphics

Support promotional efforts for the product
• Coupons, discounts, product features

Provide legally required labeling information
• Fair Packaging and Labeling Act of 1966
• Nutrition Labeling Act of 1990

“Green Labeling” issues
• Labeling packaging as made of recyclable materials

Provide information on product origin
• “Made in the USA”

Principles of Marketing (3 decks)

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