Chapter 7 - Done Flashcards
What is a product?
A good, service or idea that is offered to the market for exchange
What are goods?
Physical, tangible offerings that are capable of being delivered to a customer
What is a service?
Intangible offerings to the market
What is an idea?
Something that is offered to the market in the form of a concept, idea or philosophy
What is the total product concept?
The total product concept is a way of viewing a product as the totality of value and benefits it provides to the customer
It describes the product in terms of its 4 levels: core product, expected product, augmented product and potential product
What is the core product?
The core product comprises the fundamental benefit that responds to the customer’s problem of an unsatisfied need or want
What is the expected product?
The expected product describes those attributes that actually deliver the benefit that forms the core product
What is the augmented product?
At the augmented product level, the product delivers a bundle of benefits that the buyer may not require as part of the basic fulfillment of their needs
What is the potential product?
The potential product comprises all possibilities that could become part of the expected or augmented product
What is a product item?
A particular version of a product that can be differentiated from the organisation’s other product items by characteristics such as brand, ingredients, style or price
What is a product line?
a set of closely related product items. The close relationship is usually in terms of end use, target market, technology or raw materials
What is the product mix?
The set of all products that an organisation makes available to customers
What are consumer products?
Those products that are purchased by households and individuals for their own private consumption
Can be classified into Shopping, Convenience, Specialty and Unsought products
What are shopping products?
Irregularly purchased items that involve moderate to high engagement with the decision‐making process
What are convenience products?
Also known as fast moving consumer goods, are inexpensive, frequently purchased consumer products that are bought with little engagement in the decision‐making process
Can be divided into Staple products, Impulse products, and Emergency products
What are staple products?
Products that are bought and used by consumers regularly, such as milk, bread, rice and soap
What are impulse products?
Products that are bought with little planning, often purchased only after seeing the item at the retail store
What are emergency products?
Products that are bought when the product is needed in an ‘emergency’
What are specialty products?
Products that have unique characteristics that are highly desired by their buyers
The main characteristics of these products are
* They are pre-selected by the customer
* There are no close substitutes or alternatives
* They are available in a limited number of outlets
* They are purchased infrequently
* They sell in low volumes
* They usually have high profit margins
What are unsought products?
Products which a consumers either
- Knows about but doesn’t normally consider purchasing
- Doesn’t even know about
What is a business-to-business product?
The intention to use the product as part of business operations
Can be classified into Part & Materials, Equipment and Services & Supplies
What are raw materials?
Unprocessed natural materials that are used in the production process to form part of the business’s products
What are components?
Processed items that form part of a business’s product
What is equipment?
Refers to those business‐to‐business products that are used in the production of the business’s products
What is capital equipment?
Installations such as buildings (e.g. offices, factories and warehouses) and machinery (e.g. generators, furnaces and conveyor belts)
What is accessory equipment?
Smaller items that support the production of a product but that do not form part of the product (e.g. forklifts, drills, computers and filing cabinets)
What are services and supplies?
Refers to the business‐to‐business products that are essential to business operations, but that do not directly form part of the production process
What are business services?
Specialized services, such as financial, legal, market research and office cleaning services, that support the company’s operations and are often provided by external suppliers, such as banks and solicitors
What are maintenance, repair and operating supplies
Items that assist in the company’s production and operations but do not form part of the product, including engine oil (for maintenance), rivets (for repair) and paper (for operations)
What are the five steps in the product lifecycle?
New product development (Loss) Introduction (Loss) Growth (Profit) Maturity (Profit) (Maximum sales revenue) Decline (Profit)
What is the new product development?
The first stage of a product’s life cycle occurs when the organisation develops the idea, undertakes research, prepares prototypes, pre‐tests the product, and makes modifications before the product launch
What are the steps in new product development?
Idea generation
Screening - Process to eliminate those ideas that are not feasible, and to help identify the most promising of those that are
Concept evaluation - This process is designed to determine whether the product could satisfy a customer need or want and to identify those attributes which offer the most value
Marketing strategy
Business analysis - A business analysis reviews how the new product will affect the organisation’s costs, sales and profit projections
Product development - The next stage is to convert the product concept into an actual product
Test marketing - Test marketing activities enable a ‘real world’ assessment of the entire marketing mix that supports the product
Commercialisation - If all has gone well for the previous phases, it is time to launch the new product into the market
What is in the introduction stage?
This stage marks the first appearance of the product in the marketplace
The market is likely to know little or nothing about the product, and so the organisation must often make a considerable investment in promotional activities in order to build awareness
What is the growth stage?
The growth stage sees increasing popularity, sales and profits. It depends, of course, on the product being welcomed by the marketplace and potential customers deciding to actually purchase the product
What occurs in the maturation stage?
As competitors enter the market with similar products, the novelty of the product wears off, alternative — potentially superior — products become available, and the product’s sales and profitability peak and start to fall
* It is at this point where the organisation/marketer needs to decide whether to change things up or abandon ship
What is the decline stage?
The decline stage of a product’s life cycle sees sales and profits fall
What is the product adoption process
Awareness - Consumer becomes aware of the product Product Interest Product Evaluation Product Trial Product Purchase INSERT THE IMAGE FROM THE NOTES
What is the theory of diffusion of innovation?
Describes how innovations are adopted by the market over time and suggests that the influence of social groups on the decisions made by individuals determines the way in which new products and ideas are adopted
What are innovators?
Are the first adopters of new products
What are early adopters?
- Are the next group to adopt
- They are likely to be careful choosers of new products and are often opinion leaders, respected by peers and people in the other categories
Who are the early majority?
Tend to be more deliberate in their choice of new product and try to avoid taking risks
Who are the late majority?
They are more cautious and skeptical about new products and technologies but will eventually adopt the new product after most people have purchased it, and due to economic necessity or social pressure
Who are the laggards?
- They are the last adopters
* They are often wary of new products and ideas, and generally prefer products that are familiar
What is a low-context and high-context society?
A low‐context society is one that desires explicit information; whereas a high‐context society relies more heavily on implicit and observed information from the environment
What is product differentiation?
The creation of products and product attributes that distinguish one product from another
What is a Brand?
Refers to a collection of symbols, such as the name, logo, slogan and design, intended to create an image in the customer’s mind that differentiates a product from competitors’ products
What are some of the advantages of a brand?
- A brand can identify one item, a family of items, or all the items of a seller
- A customer will prefer a well-known or more familiar brand
- The brand can provide a form of self‐expression and status, as well as denote product quality
What is brand equity?
The added value that a brand gives a product
When does brand loyalty occur?
When the customer:
- Shows a highly favorable attitude towards a specific brand
- Would prefer to buy a specific brand over any other brand in the market
What are the different branding strategies?
Individual branding
Family branding
Brand extension
What is individual branding?
Using a different brand on each product, giving each its own specific identity
For example, Smith’s Snackfood Company has a number of brands in addition to Smith’s in its product mix, including Doritos, Twisties, Parker’s, Nobby’s, Grain Waves, Cheetos and Burger Rings, yet these are all known by their individual brand
What is family branding?
Using the same brand on several of the organisation’s products
Ford - Each different type of car has a different name
What is brand extension?
Giving an existing brand name to a new product in a different category
* For example, Redheads, a company that was only known for making matches, relaunched itself with an expansion into a range of BBQ products including firelighters, fuel, cleaners and scourers
What are manufacturer brands?
Brands that are owned by producers and are the most common type of brand
* The Murray Goulburn Co‐operative Co. Ltd, for example, manufactures cheese, butter and other dairy products branded as ‘Devondale’ in both consumer and business markets
What are private label brands?
They are owned by resellers, such as wholesalers or retailers, and are not identified with the manufacturer
* Woolworths has been expanding its private label brands (Woolworths Fresh, Woolworths Select, Woolworths HomeBrand and Macro Wholefoods Market) and substantially reducing the shelf space given to manufacturer brands
What are generic brands?
Are products that only indicate the product category.
They do not promote a specific brand name, but state what the product is
What is licensing?
It is an agreement to use the names and symbols of other brands for a fee
* For example, a toy manufacturer can become the licensee in a licensing agreement with the owners of the ‘Star Wars’ or ‘The Simpsons’ brand names and thus sell merchandise such as plush toys, figurines, clothes or school stationery branded with the licensor’s brand
What is franchising?
In a franchise agreement, the franchisor permits the franchisee to use its business model, including products, brands, processes and suppliers, and to benefit from coordinated promotional activities
Gloria Jeans is an example
What is co-branding?
It is the use of two or more brand names on the same product
* Domino’s Pizza and The Biggest Loser is an example, forming an unlikely co‐branding alliance in recent times to launch a ‘Good Choice Range’ of individual meals
What should packaging do?
In summary, effective packaging should be designed to ‘protect what it sells and to sell what it protects’
What are the 3 main types of packaging and what do they do?
Primary Package: Holds the actual product, such as the curve‐shaped plastic bottle for S.C. Johnson’s Toilet Duck cleaning product
Secondary Package: The material used to hold or protect the product. It can be removed and discarded after purchase. For example, the seal on the Toilet Duck bottle that prevents the product leaking
Shipping Package: The packaging used to carry the product out of the factory, and through the channel of distribution (e.g. wholesalers and transporters), to the retailer
What is labelling?
It usually forms part of the package and provides identifying, promotional, legal and other information
What is the Ansoff matrix?
A management planning tool that can help a business determine its growth strategy
What are the 4 different growth strategies presented in the Ansoff matrix?
Market penetration - Occurs when a business increases market share within the existing marketplace - Current market/current customer
Product development - Involves developing new products for the current markets - New product/current market
Market development - When a business finds new markets for its existing products - New market/current product
Diversification - When a business introduces new products into new markets - New product/new market
What is a line extension?
A variation or derivative of an existing product can be added to the product line, rather than superseding the original product
What is product obsolescence?
A planned or unplanned removal of a product from the product line
Planned - done by the organisation
Unplanned - Due to social/technological change rendering the product no longer wanted
What is product deletion?
The process of eliminating a product from the product mix
How to make a brand name?
Product’s benefits and qualities
Easily recognisable and sayable
Should be distinct
Should easily translate to other languages
Should be capable of registration and legal protection
