Chapter 8 Flashcards
What is a product?
Anything that can be offered to a market for attention, acquisition, use, or consumptions that might satisfy a want for need
What are services?
Form of a product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in ownership of anything
True or false: is a product a key element in the overall market offering?
TRUE. A company’s market offering often includes both tangible goods & services
What is organization marketing?
Consists of activities undertaken to create, maintain, or change attitudes & behaviour of customers & the general public toward an organization
True or false: can people be thought of as products?
TRUE. Person marketing consists of activities undertaken to create, maintain, or change attitudes or behaviour toward particular people
True or false: can ideas be marketed?
TRUE. For example, Molson runs an ad warning of the dangers of drunk driving
What are the three levels a product marketer needs to think about when thinking about a product?
- Core customer value
- Actual product
- Augmented product
What does core customer value mean?
When designing products, marketers must first define core problem-solving benefits or services that consumers really want (what is the buyer really buying?). For example, the core product of a smartphone is constant connectivity
What does an actual product mean?
Physical device with all of its features and associated brand name and packaging. For example, the actual product is an iPhone
What is an augmented product?
Additional services and benefits that go along with the product. For example, an augmented product is the iPhone plus a calling and data plan
What are the two broad classes that products and services fall into?
Consumer products and industrial products
What are consumer products?
Consumer products are purchased by consumers for personal use
What are convenience products?
Consumer products and services that customers usually buy frequently, immediately, and with minimum comparison and buying effort (drugstores, grocery stores, convenience stores)
What are shopping products?
Less frequently purchased consumer products and services that shoppers compare carefully on suitability, quality, price, & style
What are speciality products?
Consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
What are unsought products?
Consumer products that the consumer either does not know about or knows about but does not normally think of buying (life insurance, preplanned funeral services, blood donations)
What are industrial products?
Those purchased for further processing or for use in conducting a business
What are the three groups of industrial products?
Materials and parts, capital items, and supplies and services
What are materials and parts?
Include raw materials and manufactured materials and parts
What are capital items?
Aid in buyer’s production or operations, including installations and accessory equipment
What are supplies?
Include operations supplies and repair and maintenance items. Supplies are convenience products of an industrial field because they are typically purchased with minimum effort or comparison
How can a firm obtain new products?
Two ways:
- Acquisition
- Buying a whole company, a patent, or a license to produce someone else’s product - New-product development efforts
- Developing of original or “new to the world” products, product improvements, product modifications, and new brands through a firm’s own product development efforts
True or false: new products are typically new to the world only once
TRUE. For example, the first mouse and keyboard
What is the biggest problem with new products?
They lack differentiation
What is the diffusion of innovation theory?
Social sciences theory that divides members of social groups into segments according to how likely they are to adopt a new idea. It suggests that a new idea must be diffused through a group via various forms of communications, and that because each group has very different motivations and beliefs, diffusion is much more difficult than it may seem
What is the Technology Adopting Life Cycle?
A sociological model that describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups
What are innovators?
They pursue new technology for its own sake. For example, innovators are the kind of people who line up overnight to be the first ones to buy a new iPhone
What are early adopters?
They will purchase new technology soon after it is realized, but only if they have a use or purpose for it
Who are the early majority?
They are a more practical group. They might want new technology but they wait until they have a real need for it or the price becomes more affordable
Who are the late majority?
Those who wait until new technology has been proven and has more or less become a standard
What are laggards?
People who are not comfortable with technology or have no interest in it and are not a valuable market to pursue
What is idea-generation?
Systematic search for new-product ideas
Companies can obtain new-product ideas from any number of external resources such as…
Distributors and suppliers
What is the most important source of new product ideas?
Customers. A company can analyze customer questions and complaints to find new products that better solve consumer problems
What is the “idea market?”
Any employee can submit suggestions for solving a problem, or for a new product, in return for a reward
What is crowdsourcing?
Inviting broad communities of people such as customers, employees, independent scientists and researchers, and even the public at large into the new-product innovation process
What is idea-screening?
Helps spot good ideas and drop poor ones as soon as possible
What is a product concept?
Detailed description, drawing, or prototype of that idea that can be shown to potential customers
What is a marketing strategy development?
Designing an initial marketing strategy for a new product based on the product concept
What does the marketing strategy begin with?
A detailed description of the target market for a new product
True or false: the strategy must state goals market share goals and profit goals
TRUE
What is a business analysis?
A review of sales, costs, and profit projections for a new product to find out whether they satisfy a company’s objectives
What is test marketing?
The stage at which the product and marketing program are introduced into realistic market settings
What is commercialization?
Full-scale introduction of the product into the market
What is the product life cycle?
The course that a product’s sales and profits take over its lifetime
What are the five stages of the product life cycle?
Product development, introduction, growth, maturity, and decline
What is the introduction stage?
Stars when the new product is first launched. Many products fail during the introduction stage but some products take off quickly such as Apple’s iPod
What is the growth stage?
A product’s sales start climbing quickly and competitions will begin to release their versions of a new product
What is the maturity stage?
At some point, a product’s sales growth will slow down and enter the maturity stage and this is where sales growth slows down or levels off
What is the decline stage?
A product’s sales start to decline
What is a style?
A basic and distinctive mode of expression
What is a fashion?
A currently accepted or popular style of design, colour, or theme
What is a fad?
New products that are extremely popular for a short period of time then disappear
What is product quality?
Characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs
What is packaging?
Activities of designing and producing container or wrapper for product
What is sustainable packaging?
Packaging that meets the requirements of a product while minimizing environmental, economic, and social impacts of a product and its package
What is the closed loop system?
Idea that packaging can be recycled and thereby reused over and over again
What is labelling?
Labels can describe several things about products like who made it, where it was made, when it was made, its contents, how it is used, and how to use it safely
True or false: companies do not use the internet to provide support services
FALSE. Many companies use the Internet to provide support services but sometimes human touch is necessary i.e. Apple’s Genius Bar
What is a product line?
A group of products that are closely related because they function in a similar way, sold to the same customer groups, are marked through the same type of outlets, or fall within given price ranges
What is the product line length?
The product line length is the user of items in the product line and is influenced by company objectives and resources
What are the two ways a company can expand its product line?
- Line filling
- Involves adding more items within the present range of the line - Line stretching
- Occurs when a company lengthens its product line beyond its current range
What is a product mix?
Consists of all product lines and items that a company markets
What are the four dimensions of a company’s product mix?
- Width
- Length
- Depth
- Consistency
What does a product mix depth refer to?
Refers to number of versions offered of each product line
What does consistency of a product mix refer to?
Refers to how closely related various product lines are in end use, production requirements, distribution channels, or some other way
What is a service sector?
Single most important industry in Canada’s economy. Includes all government services, hospitals, military, police and fire department, Canada Post, schools, colleges, and universities
What is service intangibility?
Services that cannot be seen, tasted, felt, heard, or smelled before they are bought (ex: cosmetic surgery).
What is evidence management?
The service organization presents its customers with organized, honest evidence of its capabilities
What is service inseparability?
Services cannot be separated from their providers, whether providers are people or machines
True or false: if a service employee provides service, does the employee become part of the service?
TRUE. Provider-customer interaction is a special feature of services marketing
What is service variability?
The quality of services depends on who provides them as well as when, where, and how they are provided
What is service perishability?
Services cannot be stored for later sale or use
What is the service-profit chain?
Links service firm profits with employee and customer satisfaction
What are the five links of a service-profit chain?
- Internal service quality
- Superior employee selection and training - Satisfied and productive service employees
- More satisfied, loyal, and hard-working employees - Greater service value
- More effective and efficient customer value creation and service delivery - Satisfied and loyal customers
- Satisfied customers who remain loyal, repeat purchase, and refer other customers - Healthy service profits and growth
- Superior service firm performance
What is internal marketing?
Orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction
What at the three major marketing tasks service companies face?
- Want to increase service differentiation
- Service quality
- Service productivity
