Chapter 7 verhage Flashcards
Product
A combination of tangible and intabible characterstics that enable an object or a service to satisfy a customer need.
marketers regard the product as a bundle of benefit to the purchaser
product level: Core product
Core product or Core benefit
refers to the basic function or problem solving benefits that a consumer is seeking in the exchange.
key question is what the customer is really buying.
Product level: Actual product
the second level of product development turns the core benefit into the actual product
considering the buyers expectations they must develop the product and services
features, design, quality level, brand name, packaging
that, combined deliver the core benefit of the customer.
Product level: Augmented product
this includes the intangible and psychological benefits and service based on features that make the total product more attractive from the customers viewpoint.
Product attributes
usually product attributes make a difference in a purchase decision or the choice between brands.
product attributes are for example, user friendliness, quality of instructions, level of customer service etc…
Consumer goods
are sold to individuals and their families for their personal use or consumption.
These buyers are known as ultimate consumers or end users of the product
business products
are sold to organizations, including companies, government agencies and non profit institutions, that either resell them or use them to make products or provide a service.
Convenience products
items the consumers buy frequently, immediately and with a minimum shopping effort. because most brands are fairly similar the consumer spends little time comparing the prices and quality.
convenience products can be categorised in
- frequently bought
staples or fastmoving consumer goods (for example bread) - spontaneously bought
impulse goods purchased with no pre-planning or carefull decision making (adding chewing gum while standing in the line to pay) - emergency goods
purchased when the customer urgently needs the item
(for example a new umbrella while its raining)
Shopping products
items for which the consumer normally compares the quality, price and style of a number of alternatives, often visiting several stores before making a purchase decision.
(camera’s, carpeting, clothes)
can be either homogeneous (focussing on the lowest price)
or heterogeneous. (focussing on product attributes for difference between the offerings)
Specialty products
items or services for which consumers are willing to make a special effort to acquire. The purchase is characterised as high involvement.
Unsought products
products or services of which the consumers are unaware, haven’t necessarily thought of buying or discover they need in order to solve an unexpected problem.
Non-durable products
products that have relatively short life cycle, like clothing and footwear, they rarely last longer than about three years.
products like soft drinks and shampoo can also be called fast moving consumer goods.
Product mix
the total assortment of products and services that the company sells, including the various product lines, products, product types and brands.
Product line
is a group of closely related items in the organisations assortment or product mix.
example: all razors Gillette sells represent one product line, these products in the same product category often meet the same need.
Soft drinks is a product line that includes products such as cola and fruit juice at the same time fruit juice is a product that includes product types such as apple juice and grape juice.
Product type
is an individual product or a specific version of a service that differs from other types of the same product because of certain attributes.
it is also referred to as product item if it can be designates as a distinct offering within the company’s products or is listen in the firms catalogue or on its website with specific article number
Product mix width
refers to the number of product lines that a company sells. the more product lines the wider the product mix
product mix lenght
refers to the total number of articles that a company offers within all of its product lines, and thus is a measure of the total number of items that the company sells
product line length
this is the number of items in a product line.
product line depth
refers to the number of product items (brands, types, models and container sizes) in a product line.
Product mix consistency
when companies add product lines that are related to the current products they carry
if they add unrelated products it is counter-productive
This trend, where stores not traditionally associated with particular products offer them, is reffered to as scrambled merchandising.
assortment height
if the products fall within the same price range, this can also be established for each product line by calculating the average price level of the product items or brands in a line.
product mix pricing strategy
when deciding how the different products in the product lines or in the assortment should be prices to maximise profits on the total mix, there are several options that must be considered
Price lining
when all of the items they offer in each product line at a limited number of specific price points such as clothing stores that sell suits only at
€199, €249 and €329
product line pricing
Different parts of the product mix which are consumption related or complementary in their use are priced in relation to one another
20/80 rule
approximately 20 percent of the product offered by a company account for about 80 percent of its total sale
this 20 percent makes up the core assortment, they form an important part of the retailers store image and ambience, they cannot simply be removed from the merchandise mix
the remaining 80 percent is known as the peripheral assortment. These products have a relatively low turnover rate.
Product line extension
involves adding a closely related product to the current product line so as to compete more broadly in the industry
trading up
with this strategy the product line is stretched upward beyond the original price range, also referred to as upward stretch.
trading down
to tap a new price sensitive segment at the lower end of the market, by introducing a lower priced item.
downgrading
is a product assortment strategy but a positioning strategy designed to influence the customers perception, through quality and price modifications or by cutting bakc on the facilities and decor in the store, a company deliberately tries to reduce the quality and serivce levels of a product line or store format and ambience
when a company does the opposite it is called upgrading.
Line filling
the lengthening of the product line beyond its original range, this is done by adding more products within the existing range of products and prices.
Brand stretching
when a new product has been well received by the target market the company may launch other products or product items under the same brand name, possibly in a new market segment
Line extention
the company uses existing brand names for new product items in the same product line.
Brand extention
the existing- well established brand name is now applied to a new product in a different product class or category.
Product life cycle
a graphic visualisation of the stages that a new product passes through over time in the marketplace, from birth to death.
- introduction
- rapid growth
- turbulence
- maturity
- decline
product life cycle: introduction stage
the consumers are initially not even aware of the product and its potential uses.
company should invest in advertising and promotion
concentrate its communication on stimulating primary demand by convincing the target group that it should use the type of product
after establishing primary demand the company can focus its communication effort to selective demand, which is demand for its own brand.
product life cycle: growth
in rapid growth stage sales typically grow at an increasing rate and faster than during any other part. the product flies as more and more consumers buy it.
positive word of mouth creates a snowball effect.
product life cycle: turbulence
sales continue to increase, but not as quickly as in rapid growth. by now all potential buyers are aware of the product and by the end of this stage they will have tried or purchased it at least once, the product reached it maximum penetration ratio.
product life cycle: Maturity
in the beginning sales still increase slightly, then starts to decline, while profits continue to fall. The company should start thinking about the future of the product
the primary goal in this stage is to defend the firms market share against competition.
product life cycle: Decline
usually enters the decline stage because of changes in the environment, and not as a result of the companies ineffective strategy common causes for falling sales are
- saturated market (most households have one mobile phone)
- consumers changing taste or social values (no longer fur)
- new technologie
retrenchment stategy
if enough competitors leave the market (in the decline stage) so a firm can profitably continue to serve those customers who still want to the product
Product class
or product category: all of the product lines in the entire industry or a group of products, such as cars, motorbikes, scooters, which may be considered substitutes for each other, from which consumers may choose to meet a certain need such as transportation
market stretching
many companies try to stretch out the life of a product in the maturity stage of the PLC through a series of sequential measures. this can be done through
- stimulate more frequent use of the product among current users
- tap new markets
- suggest alternate uses for the product.
product quality
a collection of attributes and features of a product or service that influence its ability to meet customers stated or implied needs, wants and expectations
six sigma
a quality management system designed to satisfy customers by achieving quality through a high disciplined process that focuses on developing and delivering near perfect products and services.
Quality management
devote a great deal of attention to the analysis, planning, implementation and evaluation of all activities that improve the (technical) quality of their products and production processes.
price/quality ratio
successful companies do not necessarily compete on the basis of the best quality, but on better price/quality ratio
warranty
a written statement of what a seller promises to do if a product turns out to be defective or fail to perform properly within a certain period after being purchased
guarantee
assurance that the product is as presented and that it will price the expected performance
customer service
every form of assistance before, during and after the purchase that makes it easier for customers to buy and use the product and increase the likelihood of repeat purchases, provided by a company to differentiate its products from competitive offering and to build long-term relationships with its clients.
vertical marketing system
working together with other organisations in a professionally managed and centrally coordinated network with an agreement on customers service task responsibilities. this is, in effect, a form of integration in the distribution channels.
satisfier
companies are constantly trying to uncover which product attributes motivate buyers to choose a particular brand in a product category. Things that cause satisfaction. these things significantly improve its quality and are major reason to buy the product.
dissatisfiers
satisfiers often turn into dissatisfiers: the satisfying features absence from a product will be a reason for consumers not to choose that brand.
network
by reinforcing its social ties with customers and its economic or technical ties with other organisations, the firm can improve mutual understanding between these parties and develop a solid marketing network.
mass customisation
allows marketers to offer individually tailored products and services to a large number of customers cost-effectively.
one-to-one marketing
this marketing strategy is customised to create long-term relationships with individual customers
a higher level of loyalty can be achieved.
brand
may be defined as a name, term, symbol, design or any other feature that a firm uses to identify its products or services and differentiate them from those of other sellers.
brand name
is part of a brand that ban be spoken - including letters, words and numbers-
brand mark
or logo, is the element of a brand that cannot be vocalised. (mcdonalds golden arches)
trademark
is a brand, especially one that is officially registered and protected by law, which a company or individual uses as identification on goods made or sold by them. the trademark must be legally registered.
battle of the brands
manufactures and retail distributors have ben competing for power in the supply chain. this is actually fought over control of the distribution channel because whoever controls distribution largely controls profits.
the outcome of this battle determines who - as channel captain - will have most influence on the marketing strategies implemented by other parties in the distribution channel
manufacturer brand
is owned by the products maker, is sometimes called a national brand, because it is often advertised nationwide,
referring to a brand as a manufacturer brand really indicates the brands owner.
premium brands
brands in the highest perceived quality and price level are known as premium brands
standard brands
are brands that that lack at least one of the characteristics of premium brands these products may be less widely distributed or advertised regionally rather than nationally.
distributors brands or private labels
are owned and controlled by a retailer, wholesaler or other type of reseller these brands are often referred to as private labels, private brands, store brands or dealer brands.
Generic brands
are right at the bottom of the price ladder, these products are sold in plain packaging and named only generic class (such as tea) without a specific brand name.
Co-branding
involves putting two or more brand names on their product.
store format
retail organisations try to connect to their target markets with well sought out store formats, which include a product assortment that differs from their competitors
brand equity
the long-term value of the brand or the value that a particular brand name adds to a product in the marketplace.
family brand
involve selling most, if not all of its products in a product line under the umbrella of a single brand name.
yamaha motorcycles and pianos
individual brands
three reasons why companies would sell their products under separate brand names
- to protect existing products
- to increase sales through market segmentation
- to stimulate internal competition.
styling
the physical appearance of the product
product features
specific design characteristics that enables a product to perform certain tasks.
example: safety, comfort, user friendliness
reverse engineering
the process of disassembling a competitor’s product piece by piece to take a close look at its components and get clues about the production process, with the objective of making a stripped down product at reduced costs.
package
the wrapper or container of a product used to protect, promote, transport and identify a product.
packaging
the first thing customers see in a store, even before they the actual product, is more important to consumers than you might think.
like the product brand image, packaging evokes certain feelings in the consumer
packing functions
were expanded with the arrival of fully automatic packing methods and self service supermarkets. because customers could examine and compare at convenience.
label
usually identifies the name of the product, the brand, the name and the address of the manufacturer, distributor or importer, the net contents , the country of origin, the ingredients and nutrition values.
other legally requires product information displayed on the packaging are directions on how to use the product, storage instructions and expiration date.
universal product code
a numerical barcode printed on packaged that can be read by optical scanner systems and processed by computers.
product differentiation
packing plays a important role in product differentiation, packing can be used to reinforce the brands positioning. it can also help the firm target a particular customer segment.
service
is an intangible activity that gives users a certain level of satisfaction but that does not involve ownership and cannot be stored.
services marketing
defined as systematically stimulating sales of intangible activities by facilitating the exchange process between service providers and buyers.
services are intangible, customers can not physically examine, touch or taste a service before making a purchase decision.
service continuum
a classification of products according to their tangibility.
services are subject to inseparability
this means that services are produced and received at the same time and are inseparable from the service provider
pershability
a firm’s surplus service capacity cannot be stored for future use.
heterogeneity
or variation in quality
usually increases as the degree of labour intensiveness increases.
