chapter 14 Flashcards
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What is a total product offer or value package?
everything consumers evaluate when deciding to buy something
what is a product line?
group or set of products that are physically similar
what is the product mix?
the set of all products & items that a seller offers for sale
what is product differentiation?
The creation of real or perceived product differences
what are convenience goods and services?
products the consumer wants to purchase frequently and with a minimum of effort
what are specialty goods and services?
products with unique characteristics and brand identity
what are unsought goods and services?
Products consumers are unaware of, haven’t necessarily thought of buying, or suddenly find they need to solve an unexpected problem
marketing tasks for convenience goods
make them readily available & create the proper image
marketing task for shopping goods
promoted through a combination of price, quality and service
marketing task for specialty goods
reaching special market segments through advertising
marketing task for unsought goods
personal selling or online services
what are industrial goods/business goods/B2B goods
Products used in the production of other product
components of a total product offer
- packaging
- convenience
- brand name
- price
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what is packaging
the process of designing and creating the container or wrapper for a product
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why is packaging important
- Attract the buyer’s attention.
- Protect the goods inside from damage
- Describe and give information about the contents.
- Give some indication of price, value, and uses.
- Sustainability
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visual and sensory elements that can evoke emotions
- Color Psychology
- Typography and Visual Elements
- Structure, Form, Material and Texture
- Brand Storytelling
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Examples of companies with Sustainable, Biodegradable, and Eco-friendly Packaging
- nestle
- juhayna
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Juhayna uses which type of packaging for their products?
tetra pack
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Which company uses compostable bags made from plant-based materials?
egypt foods group
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Which multinational company has taken steps to reduce plastic waste by introducing eco-friendly refills for their products?
Unilever
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what is branding
the process of creating a unique identity and image for a product, company, or organization in the minds of consumers
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importance of brand name for buyer
quality
reduces search time
adds prestige to purchases
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importance of brand name for seller
help promotional efforts
add to repeat purchases
Emotional connection
differentiate products so that prices can be set higher
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what is brand equity
the intangible value and assets associated with a brand and related symbols
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what is brand awareness
how quickly or easily a brand name comes to mind when someone mentions a product category
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what contributes to brand equity
consistent branding efforts
positive customer experiences
delivering on brand promises
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what is a logo
a visual representation of a brand. It is a unique and recognizable symbol, icon, or design that represents the brand
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importance of a logo
1.brand identity
2.Memorability
3.Differentiation
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what is a slogan
A catchphrase representing a product and a company, communicating the key message you want consumers to associate with your brand
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What is the difference between Branding, logo, and Slogan?
Branding is the overall process of creating an identity and image for a product or company. A logo is a visual symbol that represents the brand; a slogan is a phrase that communicates the brand’s key image
What are the possible reasons for business failures?
Insufficient Marketing Research
lack of differentiation
Failure to have a competitive advantage
Poor packaging
what is new product development?
the step-by-step approach that companies follow to innovate and bring new products to the market.
new product development process
idea generation
product screening
product analysis
development
testing
commercialization
what happens in product screening?
In this step, the generated ideas are evaluated
what happens in product analysis
This step involves conducting a thorough analysis of the potential market
what happens in product development and testing
develop a prototype, or sample, so that consumers can try
example of product development and testing
KFC tested the market for 3 years the president says “we had to get it right”
what happens in commercialization
Promoting the product to distributors & retailers to get wide distribution
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what is the product life cycle
the stages a product goes through from its introduction to its eventual decline in the market.
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stages of product life cycle
Introduction
Growth
Maturity
Decline
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what happens in the introduction
The product is launched into the market.
Sales are typically low due to limited customer awareness and high marketing costs
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marketing mix in the introduction
Companies focus on creating product awareness and building brand recognition.
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what happens in growth
the product gains acceptance, and sales start to increase rapidly
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marketing mix in growth
Companies concentrate on building market share and increasing sales
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what happens in maturity
stabilized sales and intense competition.
Market saturation occurs, and competitive pricing becomes more common
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marketing mix in maturity
Companies focus on differentiation strategies, customer retention, and maximizing profitability.
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what happens in decline
sales and profits decline as the product loses relevance
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marketing mix in decline
Companies may choose to discontinue or reposition the product
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What is the primary marketing strategy in the decline stage of the product life cycle?
Focus on niche markets
what is pricing
the process of determining the value of a product or service and setting a price that customers are expected to pay
pricing objectives
obtain profit
building traffic
greater market share
what is breakeven analysis?
a financial tool used to determine the point at which a company’s total revenue equals its total costs, resulting in neither profit nor loss.
bep formula
fixed cost/price-variable cost
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what is cost-based pricing
adding a markup percentage to the cost of production to determine the selling price
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advantage of cost-based pricing
It ensures that costs are covered and provides a desired profit margin
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disadvantage of cost-based pricing
prices may be set too high, so customers won’t buy
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demand-based pricing
- estimating the selling price that customers would be willing to pay for a product
- the desired profit margin is subtracted from this price
- the remaining amount will be the maximum allowable cost for producing the item
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what is competition-based pricing
Is a strategy based on what all the other competitors are doing. the price can be at, above, or below competitors’ prices.
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what is price leadership
a strategy where one or more dominant firms set prices that all competitors in an industry follow.
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what is a skimming pricing strategy
setting higher prices for products or services to create a perception of superior quality, exclusivity, or luxury
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advantage of skimming pricing strategy
help recover R&D costs and make as much profit as possible
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the disadvantage of skimming pricing strategy
Once other companies notice the profitability of the product, they might introduce similar offerings or alternatives
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what is the penetration strategy
to price the new products at a lower price, then eventually increase it
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advantage of a penetration strategy
Low prices will attract more buyers
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what is everyday low pricing (EDLP)
Setting prices lower than competitors and then not having any special sales.
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what is a high-low pricing strategy
Setting prices that are higher than EDLP stores but having many special sales where the prices are lower than competitors.
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what is psychological pricing
Pricing goods and services at price points that make the product appear less expensive than it is
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what is bundle pricing
offering multiple products or services as a package for a lower price compared to purchasing them individually
