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Marketing Junior Year > Chapter 8: Products > Flashcards

Chapter 8: Products Flashcards

1
Q

T or F: Some products win because of luck and not just talent.

A

True

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2
Q

a bundle of benefits

A

product

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3
Q

T or F: It’s appropriate to call products “benefit delivery systems”.

A

True

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4
Q

T or F: Most of the times, consumers buy products just to have them.

A

False; most of the time, consumers buy products for the benefits, not just to have them.

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5
Q

What are the 3 product levels? List them from the center to furthest out.

A
  1. Core Product (center)
  2. Actual Product (middle)
  3. Augmented Product (outer circle)
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6
Q

Which product level does this describe:
the essential motivating benefit the customer is purchasing; what the customer wants to get most. (ex: the fun, relaxation, adventure, and family time of a great vacation)

A

Core Product

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7
Q

Which product level does this describe:
the physical and intangible properties or characteristics the product takes on. This can include attributes such as the materials, styling, and branding. It’s what the customer actually gets to satisfy what they wanted most. (ex: A Carnival Cruise Lines family cruise package)

A

Actual Product (the form the benefit is taking)

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8
Q

Which product level does this describe:
extra attributes and features that are not part of the actual product but may be offered to make the offering more attractive, to speed purchase decisions, and to match or differentiate the actual product from competitors. (ex: deep discounts on airfare to the cruise port, hotel accommodations the night before departure, preferred boarding and check-in) (another ex: guaranteed warranty on kids kindle fire thing)

A

Augmented Product

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9
Q

What are the four categories of benefits (from bottom of pyramid to top)?

A
  1. Functional
  2. Emotional
  3. Life Changing
  4. Social Impact

(that is, products provide benefits that address four kinds of needs; benefits are split up into these groups depending on which need they meet)

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10
Q

How does the Elements of Value Pyramid relate to Maslow’s Hierarchy? (3 things)

A
  1. In both pyramids, the bottom stage starts with basic needs (mundane benefits) (ex: physiological in maslow’s, functional in this pyramid). As we move up, we move through higher order of things (at the top, we have more transcendent benefits).
  2. Start by fulfilling bottom needs
  3. As you move up the pyramid, the higher needs subsume the bottom needs.
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11
Q

How many total benefits that products provide are in the Elements of Value Pyramid? How many are in each category?

A
  • 30 total benefits
  • Functional Category: 14
  • Emotional Category: 10
  • Life Changing: 5
  • Social Impact: 1 (Self-Transcendence)
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12
Q

In general, which category must be fulfilled first of the Elements of Value Pyramid?

A

Functional

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13
Q

The more benefits/elements provided by a product, the greater customers’ ______ and the higher the company’s sustained ______ _______.

A

loyalty; revenue growth

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14
Q

What is the MINIMUM number of benefits your product needs to provide for you to be highly successful as a company?

A

4

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15
Q

In general, which category is most easily copied of the Elements of Value Pyramid?

A

Functional (the bottom category)

(This tells you that as you’re layering benefits over time, you should move up in the pyramid)
(Bottom category is like engineering stuff – higher category is like branding, which is harder to copy. )

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16
Q

What is the range of provided benefits for companies with highly loyal customers?

A

4 to 11 benefits

(11 = top number of benefits provided by a single product)

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17
Q

What is the benefit that is critically important in the pyramid?

A

Quality (quality comes FIRST).

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18
Q

T or F: Quality is a critical benefit that needs to be in the mix of a product. Your product must have the highest quality, or else all the other benefits provided by the product won’t matter.

A

False; It doesn’t have to be the HIGHEST quality, but it does need to be good enough quality (not have significant product defects), or else all the other benefits provided by the product won’t matter.

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19
Q

What does bad customer service (over phones) do to the benefits?

A

Quality (which would be quality customer service in this example) is the most critical benefit; without good quality, NONE of the other benefits matter.

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20
Q

T or F: You can make changes to your product that undermines everything. So, you have to be careful about what you add and take away from a product.

A

True

(think back to Delta Airlines example. If they take away their customer service (which is like a part of their quality), this can potentially undermine everything.

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21
Q

Answer the following T or F questions in relation to feature fatigue:
1. T or F: The more features a product has, the more people will buy them compared to competitors.
2. T or F: For consumers, the more benefits they can get from a product, the more satisfied they will be.

A
  1. True
  2. False; customers that have the product with LESS features are more satisfied. This is why we call it feature fatigue.
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22
Q

all the things your product can do.

A

features

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23
Q

What are the 2 things that explain feature fatigue (why customer satisfaction is lower when there is too many features involved with a product)?

A
  1. Expectations
  2. Disconfirmation (the difference between what you expected and what happened)
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24
Q

when a product has too many features, causing users to have decreased customer satisfaction

A

feature fatigue

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25
Q

How do you solve feature fatigue as a company?

A

You have to put enough features in the product that make people want it, but not enough to where it causes customer dissatisfaction and is overwhelming.

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26
Q

actions or activities performed by the seller for the buyer.

A

services

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27
Q

______ & ________ are both products. Products is just the umbrella term for these.

A

goods; services

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28
Q

T or F: Manufacturing employees in the U.S. are steadily increasing, as well as our % of GDP for manufacturing.

A

False; both manufacturing employees and our % of GDP is going down for manufacturing and up for services contributing to GDP.

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29
Q

What are the 3 reasons why the amount of manufacturing employees in the U.S. and our % of manufacturing that contributes to GDP is decreasing? In other words, why is the U.S. a service-based economy?

A
  1. Automation (we build things now with far fewer people; ex: assembly lines)
  2. Outsourcing (cheaper to manufacture out of the country)
  3. We can make services around products very easily. (a new product is more likely to be a service rather than a good)
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30
Q

T or F: It’s easy to transform a service into a good.

A

False; easy to transform a GOOD into a SERVICE

(ex: everyone used to mow their lawns. Now, almost everybody gets services from someone to mow their lawns)

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31
Q

Services have started to (increase/decrease) as a part of our GDP. Goods have started to (increase/decrease) as a part of our GDP.

A

increase; decrease

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32
Q

The U.S. is a (service/goods)-based economy.

A

service

(bc majority of what the U.S. produces is “intangble” bc of automation, outsourcing, and its easier for us to make services around products rather than goods around products)

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33
Q

T or F: There are clean categories that differentiate goods from services.

A

False; every single one has pieces of the other (goods and services don’t cleanly fit one way or the other)

(this is why it’s useful to think of goods and services as a continuum rather than categories bc they like overlap)

34
Q

What does the continuum for goods and services look like going from left to right? (3 parts)

A
  1. Mostly Goods (ex: furniture purchased cash and carry)
  2. Balanced Goods-Services (ex: furniture reupholstery) (a mix of both)
  3. Mostly Services (ex: furniture movers)
35
Q

Tailoring clothes would fall into which part of the continuum for goods and services:
a. mostly goods
b. balanced goods-services
c. mostly services

A

b. balanced goods-services

(bc someone is tailoring your clothes (a service), but you are walking away with tailored clothes (a good))

36
Q

What are the 4 service characteristics (that is, how are services different from goods)?

A
  1. Intangibility
  2. Variability
  3. Inseparability
  4. Perishability

(think IVIP; the more of these characteristics you have, the more a product is a service rather than a good)

37
Q

Match each of the following to which characteristic of services they describe:
1. services cannot be separated from their providers; people have to be there at the time of production (producers and consumers are inseparable)
2. quality of services depends on who provides them and when, where, and how
3. services cannot be stored (ex: every seat that isn’t filled on an airplane is lost money) for later sale or use, and you cannot return the product (ex: if something bad happens on your flight, can they give you the flight back? no.)
4. services cannot be seen, tasted, felt, heard, or smelled before purchase.

A
  1. inseparability (Do people have to be in the mix for it to be produced? (ex: haircut– person needs to be there for this) (ex: education– used to be inseparable; people had to be there. But now, online has caused that to change) (whereas with goods, we don’t even know half the time where the good is manufactured; the producer and consumer are separated)
  2. variability (Think like does the product change across customers (ex: education. Does it change based on employees? That is, does it change based on who’s teaching the class? → Yes)
  3. perishability (ex: if you get a bad haircut, what do you do?, or ex: if you go to a restaurant and get a bad meal, what do you do?)
  4. intangibility
38
Q

How does the intangibility service characteristic affect marketing?

A

Intangible products make it HARDER TO ASSESS PRODUCT QUALITY. So, the benefits of intangible products must be made tangible. Tangible products often push intangible benefits to take advantage of the lasting power of abstract concepts in memory.

So, intangible products are hard to judge for consumer. So, you try to make these things tangible.

39
Q

How does the variability service characteristic affect marketing?

A

A heterogeneous product has greater employee and customer input and therefore QUALITY IS HARDER TO CONTROL. Greater customization = greater variability. So REDUCING OPTIONS HELPS CONTROL QUALITY (think Chipotle)
The more variable, the harder it is to control quality.

40
Q

How does the inseparability service characteristic affect marketing?

A

an inseparable product must be produced in front of and along with customers. QUALITY IS HARD TO ACHIEVE AND ASSESS FOR THE ORGANIZATION. Also, the customer must be accommodated within the servicescape creating capacity issues. Customers impact each other.

41
Q

On average, which has higher quality: goods or services?

Therefore, which has higher satisfaction: goods or services?

A
  • Goods (bc quality is easier to control and assess than with services)
  • Goods
42
Q

How does the perishability service characteristic affect marketing?

A

a perishable product cannot be produced ahead of time, so DEMAND MUST BE FORECAST. A perishable product cannot be returned for a comparable product and therefore, ADDITIONAL REMEDIES MUST BE OFFERED.

43
Q

T or F: It is harder to create a high quality service product that continuously operates at that level than it is to create a high quality good that operates at that level.

A

True

44
Q

The marble floors of a bank, meant to convey stability, are an example of marketing for which service characteristic?
a. Intangibility
b. Heterogeneity
c. Inseparability
d. Perishability

A

a. Intangibility

45
Q

The inability to return a haircut is an example of which service characteristic?
a. Intangibility
b. Heterogeneity
c. Inseparability
d. Perishability

A

d. Perishability

46
Q

Starbucks trying to simplify their menu to reduce complexity and increase their control of quality is an example of the ________ service characteristic.

A

variability

(they’re trying to reduce variability so they can have better control of quality)

47
Q

Does employee satisfaction relate to customer satisfaction for all products? Why or why not?

A

Not all products; the rule of “happy employees make happy customers” DOESN’T apply to companies where employees don’t have direct contact (face-to-face interaction) with customers (ex: like website or manufacturing companies)

However, it DOES apply to inseparable services, when employees are directly interacting with the customer (even if it’s just a little bit of interaction, it still affects customer satisfaction)

48
Q

the pattern of growing and declining sales in a product category

A

product life cycle

(taking a product and looking at its overall sales across its life cycle)

49
Q

Product life cycles are affected by the ________ that comes from multiple ______, which is why explaining them at the ______ category level is the preferred approach.

A

competition; brands; product

50
Q

T or F: The product life cycle looks different for every product.

A

True (there are variations depending on the product)

51
Q

What are the 5 stages of the Product Life Cycle?

A
  1. Development (like R&D; getting everything together)
  2. Introduction
  3. Growth
  4. Maturity
  5. Decline
52
Q

What happens to sales, profits, competitors, and marketing in the Development stage of the Product Life Cycle?

A
  • Sales: None
  • Profits: Decrease bc they’re investing in a product
  • Competitors: Not mentioned
  • Marketing: Not mentioned
53
Q

T or F: The Development stage of the product life cycle is always very short.

A

False; it can be VERY long

54
Q

What happens to sales, profits, competitors, and marketing in the Introduction stage of the Product Life Cycle?

A
  • Sales: Slowly increase
  • Profits: sink (hits its lowest point) due to continuous investment, paying off costs for creating the product, and marketing of the product; by the end of this stage, profit starts to increase bc more money is coming in from sales
  • Competitors: pioneering brand often has the brief advantage of facing no rivals; by the end of this stage, a few other companies may introduce rival brands into the marketplace if the product appeals to customers
  • Marketing: only innovators and a few early adopters are purchasing in this stage; focus on stimulating PRIMARY demand which relies heavily on advertising (getting the word out), promotion, and establishing distribution for the product (which can be difficult and expensive)
55
Q

Which stage of the Product Life Cycle is when the product starts to get adopted widely?

A

Growth Stage

56
Q

What are the 2 reasons why sales dramatically increase in the growth stage of the Product Life Cycle?

A
  1. target markets become aware of the product and—assuming it’s a good product—begin to buy it.
  2. more and more competitors will see the success of the category pioneer and will enter the marketplace and increase category awareness and sales through their own marketing efforts.
57
Q

What happens to sales, profits, competitors, and marketing in the Growth stage of the Product Life Cycle?

A
  • Sales: increase dramatically
  • Profits: levels off due to increased competition (when you make a new product, people will copy it)
  • Competitors: increases a lot
  • Marketing: not mentioned
58
Q

What happens to sales, profits, competitors, and marketing in the Maturity stage of the Product Life Cycle?

A
  • Sales: level off
  • Profitability: decreases, but not by a lot
  • Competitors: the market weeds out the weak competition (so slightly less competition); competition between the main players is still very strong though
  • Marketing: remaining companies can take two approaches to product marketing in a mature category:
    1. They can try to extend the life of the category by making incremental improvements to the product or by extending it to new markets.
    2. They can attempt to reduce the costs of competition in order to maximize the profitability of their brands. They frequently do this by focusing on brand-loyal customers who cost less to keep than acquiring new customers.
59
Q

What happens to sales, profits, competitors, and marketing in the Decline stage of the Product Life Cycle?

A
  • Sales: decrease
  • Profits: decrease
  • Competitors: decrease bc customers are looking towards new products (out with the old, in with the new)
  • Marketing: companies should start focusing on new products to market
60
Q

T or F: Any of the stages in the Product Life Cycle can be elongated.

A

True

61
Q

When talking about product-life cycle we are talking about product _______ sales.

A

category (the overall category sales)

62
Q

What are the two relatively common variations of the Product Life Cycle?

A
  1. Fashions
  2. Fads
63
Q

Very short-lived product life cycles; occur very quickly, so the PLC resembles something like a spike; the stages occur in very rapid succession

A

Fads

(ex: Silly Bandz)

64
Q

T or F: One of the sure signs of a fad is a rapid rise in sales followed by a sharp decline within a relatively short time period.

A

True

65
Q

T or F: Fads typically occur with expensive products that are cheap to make and cheap to sell.

A

False; INEXPENSIVE products

(That way investors can recoup their money quickly before sales tumble as the fad fades away)

66
Q

Fashions (a common variation of the PLC) are frequently _______, meaning that category sales may rise and fall several times before the fashion disappears altogether. The reappearance of a fashion once thought to be out of style is often termed a ______ look. Generally, the second or third iterations of retro styles tend to be very (short/long)-lived compared to the first.

A

cyclical; retro; short

(ex: flannels)

67
Q

The pattern of technology spreading through markets over time.

A

Diffusion of Innovation (categorizing customers into how/when they buy new products)

68
Q

What are the four diffusion of innovation adopter categories (which means like when people buy a new product when it comes out (categories of people))?
What are the percentages given for each category of people?

A
  1. Innovators and Early Adopters (17-18% altogether)
  2. Early Majority (35%)
  3. Late Majority (35%)
  4. Laggards (12%)
69
Q

Which diffusion of innovation adopter category does this describe:
people who want the new product right away as soon as it comes out, and they spend time, resources, and money to acquire it.

A

Innovators and Early Adopters

70
Q

What are the demographics and psychographics like for Early Adopters and Innovators?

A
  • Demographics: tend to be very young, well-educated, and wealthy
  • Psychographics: risk-takers, tend to be social, and have high levels of opinion leadership
71
Q

Why do early adopters and innovators adopt early? (2 things)
Which reason is the leading reason? (Put a star next to the leading reason)

A
  1. They like to get products early
  2. They like the social status/fame it gives them (telling other people about the product; they like the social capital they get from it) **
72
Q

Which diffusion of innovation adopter category does this describe:
they like to be early, but they want the product to be successful (want to get the proven products; they get info from the early adopters about which things are worthwhile); marketers consider them to be value seekers who evaluate products based on the usefulness and functionality of the product.

A

Early Majority

(psychographic/motivation for this category of people: want the product to be proven successful before they buy it)

73
Q

If we’re moving from right (laggards) to left (early adopters and innovators), as we move through each category, the category we get into is: ________, ________, more _______, and more ______ ______

A

younger; wealthier; educated; social standing (more socially connected)

74
Q

Which of the early adopter categories is the riskiest? Which category is most risk-averse?

A
  • Riskiest: innovators/early adopters
  • Risk-averse: laggards
75
Q

Early majority adopters are most likely to buy a new product in which stage of the Product Life Cycle?

A

Growth (when sales are flying)

76
Q

Which diffusion of innovation adopter category does this describe:
They get the product because they eventually have to; they’re pretty risk averse and want “all the wrinkles ironed out”; tend to be skeptical of change

A

Late Majority

77
Q

The (late/early) majority value consistency and will only purchase proven products once the price of the new product has dropped significantly; they often purchase new products at discount stores.

A

late

78
Q

Which diffusion of innovation adopter category does this describe:
they get the product out of necessity/when there’s no other option; very risk-averse; purchase habits often driven by a sense of tradition; willing to spend very little money on new products

A

Laggards

(ex: people who are dragged into getting a smartphone instead of using their flip phone)

79
Q

What happens if Early Adopters and Innovators don’t adopt? (2 parts to this answer)

A
  • If EA & I can’t get a product early, they are much less likely to adopt.
  • If EA & I don’t adopt, this significantly affects the overall adoption rate. (so like it affects if early and late majority, as well as laggards adopt the innovation)

That is, DIFFUSION doesn’t still happen. (they don’t serve the communication purpose to the early majority group)

80
Q

Using the diffusion of innovation adopter categories and considering that 53% of Alabama citizens fully vaccinated against Covid-19, those who are NOT vaccinated for Covid-19 as compared to those who are vaccinated, are probably _______.
a. less bound by tradition
b. less educated
c. Younger
d. higher social standing
e. less skeptical

A

b. less educated

81
Q

Which of the following is TRUE about early adopters?
a. If early adopters do not adopt, then the early majority will make up for them.
b. Early adopters sometimes care more about being early than having the product.
c. Early adopters tend to be older.
d. Early adopters are rarely opinion leaders.

A

b. Early adopters sometimes care more about being early than having the product.

Marketing Junior Year (11 decks)

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