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.
