chapter 9 Flashcards
incremental innovation
entering new markets by tweaking products for new customers, using variations on a core product.
disruptive technologies
cheaper and more likely to alter competitive space.
crowdsourcing
occurs when outsiders can offer needed expertise or a different perspective on a new product project that might otherwise be overlooked.
idea screening
“is the product idea compatible with company objectives, strategies, and resources?”
product idea
a possible product the company might offer to the market.
product concept
an elaborated version of the idea expressed in consumer terms.
product-positioning map
brand-positioning map
a perceptual map showing the current positions of existing brands.
business analysis
“will this product meet our profit goal?”
quality function deployment (QFD)
methodology that takes the list of desired customer attributes (CAs) generated by market research and turns it into a list of engineering attributes (EAs) that engineers can use.
alpha testing
tests the product within the firm to see how it performs in different applications. after refining the prototype, the company moves to beta testing with customers.
consumer-products tests
seek to estimate four variables: trial, first repeat, adoption, and purchase frequency.
first entry
firm could have first mover advantages. one of three options for commercialisation.
parallel entry
timing its entry to coincide with the competitor’s entry. one of three options for commercialisation.
late entry
delaying the launch until after the competitor has borne the cost of educating the market. one of three options for commercialisation.
adoption
an individual’s decision to become a regular user of a product and is followed by the consumer-loyalty process. new-product marketers typically aim at early adopters and use the theory of innovation diffusion and consumer adoption to identify them.
innovation
any good, service, or idea that someone perceives as new, no matter how long its history is.
innovation diffusion process
the spread of a new idea from its source of invention or creation to its ultimate users or adopters.
consumer-adoption process
the mental steps through which an individual passes from first hearing about an innovation to final adoption. the five steps are awareness, interest, evaluation, trial, and adoption.
personal influence
the effect one person has on another’s attitude or purchase probability, has greater significance in some situations and for some individuals than others, and is more important in evaluation than in the other stages. it has more power over late than early adopters and in risky situations.
relative advantage
the degree to which an innovation appears superior to existing products.
compatibility
the degree to which the innovation matches consumers’ values and experiences.
complexity
the degree to which the innovation is difficult to understand or use.
divisibility
the degree to which the innovation can be tried on a limited basis.
communicability
the degree to which the benefits of use are observable or describable to others.
product life cycle (PLC) assertions
- products have a limited life.
- product sales pass through distinct stages, each posing different marketing challenges and opportunities.
- profits rise and fall at different stages.
- products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage.
product
anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, etc.
customer-value-hierarchy
the marketer needs to address five product levels when planning its market offering. each level adds more customer value and together constitute the customer-value-hierarchy. five levels:
1. core benefit
2. basic product
3. expected product
4. augmented product
5. potential product
core benefit
the service or benefit the customer is really buying. eg. a hotel guest is buying rest and sleep.
basic product
the core benefit turned into a product.
expected product
a set of attributes and conditions buyers normally expect when they purchase this product.
augmented product
a product that exceeds customer expectations.
potential product
encompasses all the possible argumentations and transformations the product or offering might undergo in the future.
nondurable goods
tangible goods that are normally consumed in one or a few uses, eg. beer and shampoo. the goods are frequently purchased, so the appropriate strategy is to make them available in many locations.
durable goods
tangible goods that normally survive many uses, eg. clothing. they normally require more personal selling and service.
services
intangible, inseparable, variable, and perishable products that normally require more quality control, supplier credibility, and adaptability.
convenience goods
goods which consumers purchase frequently, immediately, and with minimal effort, such as soft drinks, soap, and newspapers.
shopping goods
goods the consumer characteristically compares on bases as suitability, quality, price, and style, such as furniture, clothing, and major appliances.
specialty goods
have unique characteristics or brand identification for which enough buyers are willing to make a special purchasing effort, such as cars.
unsought goods
goods the consumer does not know about or normally think of buying, eg. smoke detectors.
materials and parts
goods that enter the manufacturer’s product completely. consist of raw materials (farm products and natural products) and manufactured materials and parts (component materials and component parts).
capital items
long-lasting goods that facilitate developing or managing the finished product. consists of installations and equipment.
supplies and business services
short-term goods and services that facilitate developing or managing the supplies.
features
supplement the basic functions of the product.
means of differentiation
- form
- features
- performance quality
- conformance quality
- durability
- reliability
- repairability
- style
- customisation
performance quality
the level at which the product’s primary characteristics operate.
conformance quality
the degree to which all produced units are identical and meet promised specifications.
durability
a measure of the product’s expected operating life under natural or stressful conditions.
reliability
a measure of the probability that a product will not malfunction or fail within a specific time period.
repairability
measures the ease of fixing a product when it malfunctions or fails.
style
describes the product’s look and feel to the buyer and creates distinctiveness that is hard to copy.
customisation
finding out what a person really wants, which is increasingly important for the differentiation of products.
service differentiations
- ordering ease
- delivery
- installation
- customer training
- customer consulting
- maintenance and repair
customer training
how does the supplier teach a customer’s employees to use new equipment properly and efficiently?
customer consulting
includes data, information systems, and advice services the seller offers to buyers.
design
the totality of features that affect the way a product looks, feels, and functions to a consumer. design should penetrate all aspects of the marketing program so that all design aspects work together.
product system
a group of diverse but related items that function in a compatible manner. eg. an iPod includes headphones and cables.
product mix/product assortment
a set of all products and items a particular seller offers for sale. can be described in terms of width (how many product lines), length (total number of items), depth (how many variants of each product in the line), and consistency (how closely related the product lines are in end use, production requirements, distribution channels, or some other way).
product map
used to see which competitors’ items are competing against their own items and to identify market segments so they can gauge how well their items are positioned to serve the needs of each segment.
line stretching
occurs when a company lengthens its product line beyond its current range, whether down-market, up-market, or both ways.
line filling
a firm lengthens its product line by adding more items within the present range.
product mix pricing
the firms searches for a set of prices that maximises profits on the total mix. there are six situations that call for it:
1. product line pricing
2. optional-feature pricing
3. captive-product pricing
4. two-part pricing
5. by-product pricing
6. product-bundling pricing
product line pricing
developing product lines rather than single products.
optional-feature pricing
the offering of optional products, features, and services with main products.
captive-product pricing
low price for the main product, higher price for the captive product.
two-part pricing
consists of a fixed fee plus a variable usage fee.
by-product pricing
the product of certain goods often yields by-products that should be priced on their value.
product-bundling pricing
sellers often bundle products and features. two types of bundling: pure bundling and mixed bundling.
pure bundling
a firm offers its product only as a bundle
mixed bundling
a firm offers its product both individually and in bundles.
co-branding
two well-known brands are combined into a joint product or marketed together in some fashion. for co-branding to succeed the brands must separately have brand equity - adequate brand awareness and positive brand image. there are three advantages and three disadvantages.
ingredient branding
creates brand equity for materials, components, or parts that are necessarily contained within other branded products. requirements:
1. consumers must believe the ingredient matters to the performance and success of the product.
2. consumers must be convinced that not all ingredient brands are the same and that it is superior.
3. a distinctive symbol or logo must clearly signal that the host product contains the ingredient.
4. coordinated pull and push program to help consumers understand the advantages of the ingredient.
packaging
includes all the activities of designing and producing the container for a product. it is considered important as it is the buyer’s first encounter with the product. it must achieve objectives:
1. identify the brand
2. convey descriptive and persuasive information
3. facilitate product transportation and protection
4. assist at-home storage
5. aid product consumption
label
can be a simple tag or elaborately designed. it performs several functions:
1. it identifies the product or brand.
2. it grades the product.
3. it might describe the product.
4. it might promote the product through attractive graphs.
guaranties
suggest the product is of high quality and that the company and its service performance are dependable, which reduces perceived risk.
warranties
formal statements of expected product performance by the manufacturer.
