Exam 2 Flashcards
Product
A good, service or idea consisting of tangible and intangible attributes that satisfy a customers needs in exchange for money.
7 steps in product development
- new product strategy development - sets the direction or focus for new products or steps to revise existing ones
- idea generation - creative process, generation, development, and communication of new thoughts
- screening and evaluation - rate product ideas, low scored ideas will be dropped
- business analysis - a combination of gaining insight from data and performing tasks to identify the needs of the business, then recommending changes
- development - introducing product to market, product design, etc.
- market testing - explore customer response to a product - limited availability
- commercialization - full distribution of a product
why products fail
- insignificant point of difference
- incomplete market and product protocol
- not satisfying customer needs
- bad timing
- no economical access to buyers
- poor execution of the marketing mix
- too little market attractiveness
- poor product quality
product life cycle
the course of a product’s sales and profits over its lifetime
stages of product life cycle
- introduction - create awareness and trial
- growth - maximize market share
- maturity - maximize profits, product repositioning
- decline - reduce expenditures
downsizing
reducing content in package
removing a marginal amount of volume
Trade Name
the name your business is commonly known as or the name you use when advertising or doing business
harvesting
cut off expenditures of a product to profit from it
ex. cutting marketing but still retaining product
deletion
when a manufacturer permanently stops selling a product
brand extension
using well established company name to introduce new products
Price
the money or other considerations exchanged for ownership or use or a product
only P that produces revenue
price constraints
- demand for the product
- stage in the product life cycle
- cost of producing and marketing the product
- cost of changing prices
- single product versus a product line
- type of competition in the market
- pure competition
- monopolistic competition
- oligopoly - several buyers but few sellers ( sellers make a fixed price and buyers have no where else to go for a better price)
- pure monopoly - several buyers and only one seller
- competitors’ prices and customers’ awareness
- legal and ethical considerations
Slotting Fees
a payment made to a retailer to guarantee your product will be shown on their shelves
demand-oriented pricing approaches
skimming pricing - start at a high price and gradually decrease the price
penetration pricing - start low price and gradually increase price
prestige pricing - start with a high price and keep it high (exclusive product)
Price lining - give different pricing to different levels of qualities of the product
odd even pricing - instead of $20 charge $19.99 giving buyers the illusion that they are getting a bargain
Target pricing - when the manufacturer prices to wholesalers based on the final customers’ acceptable price
yield management pricing - revenue maximization with rate fences (qualify to get the deal price, ie. children pay less) and price bucket
Bundle pricing - complimentary products are put together for one price making consumers belive they are getting a bargain (consumers will buy something they otherwise would not have bought
Cost-oriented pricing approaches
standard markup price - percentage markup from manufacturer price
cost plus pricing - dollar markup from manufacturers’ price
experience curve pricing - unit cost declines by (10%-30%) each time a firm experiences doubles
deceptive pricing
see chart*
Gimics
bait and switch
Price fixing
vertical price fixing - agreement between producers and retailers to maintain the producers’ recommended retail price
horizontal price fixing- occurs when two or more competitors conspire to set prices, price levels, or price-related terms for their goods or services.
Functions intermediaries perform
transactional function - buying selling and risk-taking
logistical function - assorting; soring (breaking bulk); storing (transporting)
facilitating function - financing; grading; supplying; marketing info and research
types of vertical marketing systems
producers, wholesalers, and retailers acting as a unified system for common goals
- corporate - example GAP
- contractual - example franchises
- administered - informal arrangements by size and power of a dominant channel member (Walmart; P&G)
channel conflict
It typically occurs when a brand begins selling its products directly to consumers, disrupting channel partnerships with distributors, retailers, and agents who typically serve as intermediaries.
reverse logistics
a type of supply chain management that moves goods from customers back to the sellers or manufacturers.
types of retailers (classifications)
Levels of service:
Self-service - customers perform functions (gas station)
limited service - provide some services only
full service - provide all services to consumers
merchandise management
sales per square foot
= total sales/selling area in square feet
same-store sales growth
= (store sales in year 2 - store sales in year 1/ store sales in year 1 ) * 100
Integrated marketing communication
to ensure whatever tools of promotion you use give a clear and consistent message
communication process
source (marketer)
message-encoding (signs and symbols) channel of communication
decoding
receiver (target audience)
feedback (in the form of sales)
noise - any interruption in the communication process
types of advertisements
product advertisements
1. pioneering or information - introduction stage
2. competitive or persuasive - growth stage
3. reminder - maturity stage
sales promotion
coupons
deals
premiums - when you ask consumers to buy a product at full price and the second would be discounted or free
contests
sweepstakes
samples
loyalty programs
point of purchase displays
rebates - manufacturer gives you money back
product placement - use of brand name products in movies
public relation tools
news release
news conference
public service announcements (PSA)
prominent examples of social media
facebook
twitter
LinkedIn
Youtube
Media richness
High - medium - low
the extent of acoustic, visual, and personal contact of the network
Cost per click
how much do you pay to the owner of (network, website, etc.) each time someone clicks on your ad whether they buy or not
share of voice
% of all the online social media chatter
