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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
The four stages of the product life cycle
Introduction stage Growth stage Maturity stage Decline stage
26
Introduction
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
Growth
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
Maturity
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
Decline
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
Product Adoption Process
The stages buyers go through in accepting a product Awareness Evaluation Trial Adoption
31
Awareness
The buyer becomes aware of the product o Interest: The buyer seeks information & is receptive to learning about the product
32
Evaluation
The buyer 4considers the product’s benefits & decides whether to try the product
33
Trial
The buyer examines, tests, or tries the product to determine if it meets his/her needs
34
Adoption
The buyer purchases the new product & can be expected to use it again whenever the need for this general type of product arises
35
Reasons for Product Failure
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
Branding: Key Terms
* Brand * Brand Name * Brand Mark * Trademark * Trade Name
37
Brand
An identifying name, term, design, or symbol One item, family of items, or all items of a seller • Ex. Corvette, Chevrolet, General Motors
38
Brand Name
The part of a brand that can be spoken Words, letters, numbers • Ex. Union 76, NBA, 49’ers
39
Brand Mark
The part of a brand not made up of words Symbols or designs • Nike swoosh, Mercedes star, McDonald’s arches
40
Trademark
A legal designation of exclusive use of a brand • Coca-Cola®, Hewlett-Packard®
41
Trade Name
Full legal name of an organization • American Telephone and Telegraph Corporation (AT&T)
42
Requirements of an Effective Brand Name
Effective Brand Name: ``` Easy to say Easy to spell Easy to recall Communicates product benefits Suggests users or special features Distinctive ```
43
Value of Branding for Consumers
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
Value of Branding for Marketers
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
Major elements of Brand Equity
Brand name awareness Perceived brand equity Brand loyalty Brand association
46
Types of Brands
* Manufacturer Brands * Private Distributor Brands * Generic Brands
47
Manufacturer Brands
Brands initiated by producers
48
Private Distributor Brands
Brands initiated and owned by resellers • Ex. Dealer brands, private brands, store brands
49
Generic Brands
Brands indicating only the product category
50
Branding Policies
* Individual Branding * Family Branding * Brand-Extension Branding
51
Individual Branding
o A policy of naming each product differently | o Avoids stigmatizing all products due to a failed product
52
Family Branding
o Branding all of a firm’s products with the same name | o Promotion of one item also promotes all other products
53
Brand-Extension Branding
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
Branding Policies
* Individual Branding * Family Branding * Brand-Extension Branding
55
Individual Branding
o A policy of naming each product differently | o Avoids stigmatizing all products due to a failed product
56
Family Branding
o Branding all of a firm’s products with the same name | o Promotion of one item also promotes all other products
57
Brand-Extension Branding
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
Co-Branding
* 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
Brand Licensing
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
Packaging
Involves the development of a container and a graphic design for a product
61
Packaging Functions
``` 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
Major Packaging Considerations
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
Criticisms of Packaging
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
Purpose of labeling
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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