Final Exam Flashcards
Augmented Product
The associated services of a product. They extend the value of a product with things like warranties financing and product support.
Consumer Products
Products and services used by people for their personal use
Specialty Products/Services
are those for which customers express such a strong preference that they will expend considerable effort to search for the best suppliers (designer apparel, luxuary cars etc)
Shopping Products/ Services
products or services for which consumers will spend a fair amount of time comparing alternatives such as furniture, aparel, fragrances, apliances, and travel alternatives
Conveinence Products/ Services
are those porducts or services for which the consumer is not willing to spend any effort to evaluate prior to purchase (commodity items)
Unsought Products
Products that you don’t think about or even know exists (new to the world products and things you wouldn’t even consider you needed
Product Mix
The complete set of all products and services offered by a firm
Product Lines
Groups of associated items that counumers tend to use together or think of as part of a group of similar products or services
Perceived Value (of a brand)
relationship between a product’s or service’s benefits and it’s costs. Customers usually make this comparison by looking at competitors. If a cheaper brand is viewed as having the same quality as a more expensive brand that product is considered to have high perceived value
Who can own a brand?
Both retailers and manufacturers can own a brand. Store brands are an example.
Brands can also be under an individual brand or under a family brand. Like special K having cereal and bars and other products under specail K
Manufacturer brands
aka national brands (ex Nike, coke, Kitchen Aid)
Retalier/ store brands
aka Private-label Brands
Products that are developed by the retailers.
Sometimes they manufacture them and sometimes the make specs and get someone else to produce them
in recent years, as the size of retail firms has increased through growth and consolidation, more retailers ave the scale economies to develop private-label merchandise and use this merchandise to establish a distinctive identity
Family brand Vs Indvidiual Brand
Family brand would brand a line of products where there is an overall brand, like when kellogs puts it’s name on fruitloops, special K and, rice crispies.
Kellogs also has individual brands that it does not put the family name on like Morning Star farms Keebler and Cheez-its
Brand Extention
When a brand puts it’s name on different product lines
Like Crest putting it’s name on toothpaste, floss, mouthwash etc
Advantages:
Brand awareness already exists so new products don’t need to develop it
Consumer Acceptance can carry over from one product to the other
if used for complementary products there is a synergy between the products (tostitos Chips and Tostitos Dip)
Brand Dilution
When the brand extension adversly affects the consumer perceptions about the core brand
Brand Repositioning
changing a brands focus to realign with changing market preferences
Very difficult to do and firms often need to spend tremendous amounts of money to make tangible changes to the brands image through various forms of promotion
Reasons Why firms create new products
Changing Customer needs (also to keep them from getting bored)
Market Saturation(Once everyone has one you will see declines in the sales of the product- so create new revamped models)
Managing risk through diversity
Fashion Cycles
Improving Business relationships
Difusion of innovation
how a new product spreads through various categories of adopters Innovators 2.5% of the market Early Adopters 13.5% early majority 34% late majority 34% laggards 16%
Innovators (diffusion of innovation theory)
keep themselves informed about the product category
they are crucial to a products success because they are the ones that get the market to gain acceptance through word of mouth
Relative advantage (and effect on diffusion of innovation)
When a product or service is perceived to be better than substitutes then the diffusion will be relatively quick
Idea Generation (sources)
internal R&D
R&D Consortia (R&D through groups of firms)
Licensing (buying other peoples ideas –scientific and technology products usually)
Brainstorming
Outsourcing (ideo)
Competitors Products (reverse engineering)
Customer Input
Lead Users
innovative product users that modify existing products according to their own ideas to suit their specific needs
Test Marketing
introducing the offering to a limited geographical area
can be a very strong predictor because you can actually observe purchase behavior which is more reliable than a simulated test
Product Life cycle
Introduction -
Growth- product gains acceptance and sales increase – more competitors emerge
Maturity -
Decline
Maturity Stage of the life cycle
industry sales reach the peak
firms try to rejuvenate by adding features or repositioning
Competition is at it’s peak
Factors Differentiating services from goods - Intangible
Services cannot be touched
This makes it difficult to market because it cannot be shone directly to the customer
You must reinforce benefit and value instead
Factors Differentiating services from goods - Inseparable
Services are produced and consumed at the same time
this means that customers rarely have the opportunity to try the service before they purchase it
Purchase risk is relativly high
Factors Differentiating services from goods - Heterogeneous
Variability in the service quality due to the fact that it takes humans to produce the service generally
Factors Differentiating services from goods - perishable
Services cannot be stored for the future
Gaps Model
Analyzes the gap in customer expectation and delivery
Knowledge gap- difference between customer expectations and the firms perceptions of those expectations
standards gap - service standards gap between customer expectations and firms service standards
delivery gap - difference between firms service standards and what it actually provides to the customers
Communication Gap- difference between the actual service and the promoted service
Building Blocks of Service Quality (5)
Reliability
Responsiveness- Willingness to help customers and provide prompt service
Assurance - the knowledge of and courtesy by employees and their ability to convey trust and confidence
Empathy - the caring individualized attention provided to customers
Tangibles- the appearance of physical facilities equip and personel
The 5 c’s of pricing
Competition Costs Company Objectives Customers Channel Members
Profit oriented Pricing Strategy
Associated with a particular profit goal as an overiding concern reaching a certain level of profit per unit
Sales oriented Pricing Strategy
setting prices with the idea that more sales will help the firm more than profits per unit
Firms might be concened with their overall market share
or to discourage new firms from entering the market
