Final exam: short answer questions Flashcards
What is the meaning of product?
A product is anything that can be offered to a market for attention, acquisition, use,
or consumption that might satisfy a want or need. It includes physical objects,
services, places, organizations, and ideas.
explain product Levels.
4 levels:
- Core products: basic level, Marketers must uncover the
core benefit to the consumer of every product and sell these benefits rather than
merely selling features
-Faciliating products: services or goods that must be present
for the guest to use the core product. Facilitating products for one market segment
may be supporting products for another.
- supporting products: require facilitating products but do not require
supporting products. Supporting products are extra products offered to add value to
the core product and help to differentiate it from the competition. Supporting
products offer a competitive advantage, only if they are properly planned and
implemented.
- augmented products: includes accessibility, atmosphere,
customer interaction with the service organization, customer participation, and
customers’ interaction with each other. These elements combine with the core
facilitating and supporting products to provide the augmented product.
Product Deletion
The product life cycle illustrates that most products will become obsolete and have to
be replaced. If a product is no longer profitable, it is important to terminate it rather
than continue to pour time and resources into reviving it. If the analysis indicates
that the product should be deleted, there are three choices: phase-out, run-out, or
drop it immediately.
Phase-out : The ideal method; it enables a product to be removed in an orderly
fashion.
Run-out : Used when sales for an item are low and costs exceed revenues drop; This
option is usually chosen when the product may cause harm or complaints.
Drop it : It is best to drop the item rather than continuing to create unhappy
customer.
Explain why internal marketing is an important part of a marketing program.
The hospitality industry is unique in that employees are part of the product. The
hotel must have a staff that will perform well during moments of truth. The service
encounters between contact employees and customers are part of hospitality products.
In service industries the line employees carry out a majority of the marketing
function.
Study ‘SPC’ model!
The service-profit chain establishes relationships between profitability, customer loyalty, and
employee satisfaction, loyalty, and productivity. The links in the chain (which should be
regarded as propositions) are as follows:
- Profit and growth are stimulated primarily by customer loyalty.
- Loyalty is a direct result of customer satisfaction.
- Satisfaction is largely influenced by the value of services provided to customers.
- Value is created by satisfied, loyal, and productive employees.
- Employee satisfaction, in turn, results primarily from high-quality support services and
policies that enable employees to deliver results to customers.
A closer look at each link reveals how the service-profit chain functions as a whole.
factors that affect price sensitivity
Factors that affect price sensitivity:
Unique value effect : Creating the perception that your offering is different from
those of your competitors avoids price competition. In this way the firm lets the
customer know it’s providing more benefits and offering a value that is superior to
that of competitors, one that will either attract a higher price or more customers at
the same price.
Substitute awareness effect : The existence of alternatives of which buyers are
unaware cannot affect their purchase behavior. When consumers discover products
offering a better value, they switch to those products.
Business expenditure effect : When someone else pays the bill, the customer is less
price-sensitive. When setting rates, management needs to know what the market is
willing to pay.
End-benefit effect : Customers are more price-sensitive when the price of the product
accounts for a large share of the total cost of the end benefit. The end-benefit price
identifies price-sensitive markets and provides opportunities to overcome pricing
objections when the product being sold is a small cost of the end benefit.
Total expenditure effect : The more someone spends on a product, the more sensitive
they are to the product’s price. The total expenditure effect is useful in selling
lower-price products or products that offer cost savings to volume users.
Price quality effect : Consumers tend to equate price with quality, especially when
they lack any prior experience with the product.
Messeage execution
Check ‘Musical’
Check ‘Testimonial Evidence’
