IBM Ch.6,7,8 Flashcards
In what 4 ways are products categorized?
- New-to-the-market products
- New category entries
- Product line extensions
- Revamped products
What category of products do firms with a strong research and development focus on?
new-to-the-market products
How long can a “New and Improved” label be used on a shelf?
6 mos.
How many stages does new-product development consist of?
7
What are the stages of new-product development? (PG.164)
- New-product strategy development
- Idea generation
- Idea screening
- Business analysis
- Product development
- Test marketing
- Product Launch
What is a NEW-PRODUCT STRATEGY DEVELOPMENT? What step is this?
Strategy that determines the direction a company will take if it developed a new product. Step #1
What is IDEA GENERATION? What step is this?
Involves coming up with a set of product concepts from which to identify potentially viable new products. Step #2
What is IDEA SCREENING? What step is this?
Stage where firm evaluates an idea to determine whether it fits into the new-product strategy. Step #3
Why is ROI important during the IDEA SCREENING?
Companies have a minimum ROI “hurdle” in which a new-product must pass. If it does not pass the ROI, it’s rejected.
What is a CONCEPT TEST?
Marketers ask consumers for their reactions to verbal descriptions and rough visual models of a potential product.
What is a great way to do CONCEPT TESTING in 2015?
Social Media
What is a BUSINESS ANALYSIS? What step is it?
Process of analyzing a new product to determine its profitability. Step #4
If a new product passes the IDEA SCREENING, does that mean it will be profitable?
No
What does a BUSINESS ANALYSIS include?
- Estimating costs
- Identifying what price it will be sold
- Estimating demand for the product
What is PRODUCT DEVELOPMENT? What stage is this?
Firm determines that the good can be produced or the services can be offered in a way that meets customer needs and generates profits. Stage #5
What is TEST MARKETING? What stage is this?
Introducing a new product in it’s final form to a geographically limited market to see how well the product sells and get reactions from potential buyers. Stage #6
During test marketing, what does the firm test?
The product AND the marketing strategy.
What are risks of test marketing?
- Process is expensive
- Time-consuming
- Firms open themselves to imitation from competitors
What is a SIMULATED TEST MARKET?
Procedure in which the firm builds a mock shopping experience for participants to observe their response to marketing stimuli
What is the most expensive part of the new-product development?
Product launch
What is TIME TO MARKET?
Speed in which a company launches a product
What is SEQUENTIAL NEW-PRODUCT DEVELOPMENT?
Utilizes a progressive sequence in which functional areas consecutively complete their development tasks.
Whats a major risk in SEQUENTIAL NEW-PRODUCT DEVELOPMENT?
Can be time consuming? If there is a delay in the process, it can hold up the whole process.
Whats a major risk in CONCURRENT NEW-PRODUCT DEVELOPMENT?
New-product development that uses cross-functional teams made up of representatives from various departments to develop goods and services.
When does the highest level of risk in new product development occur?
When products fail to generate sales or prove to be dangerous and defective.
What are 5 ways a company can reduct the risk of new product failures?
- Listen to the customer carefully.
- Make a commitment to the NPD process
- Understand current market trends and anticipate changes in the market
- Ask the right questions
- Be willing to fail on occasion
What is DIFFUSION?
Process by which new products are likely to be adopted, the rate at which they will be adopted, and the process through which the products will spread into markets.
What is the CONSUMER ADOPTION PROCESS?
The process by which customers formally accept and purchase products.
What 5 product characteristics impact the adoption rate?
- Competitive advantage
- Compatibility
- Observability
- Complexity
- Trialability
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What are the 4 stages of the product life cycle?
- Introduction
- Growth
- Maturity
- Decline
What is the Introduction stage characterized as?
Innovators buy, few or no competitors, sales are typically slow, usually need incentives for people to buy
What is the Growth stage characterized as?
Early adopters buy, sales and profits rise, competitors enter market which forces prices down.
What is the Maturity stage characterized as?
Late majority and repeat buyers, main objective is profitability and maintaining the firms market share. Companies not doing well will drop out here. Profits begin to decline.
What is the Decline stage characterized as?
Falling of sales and profits causes competitors to drop out. Goods become obsolete and are sold to discount retailers.
What is a PRODUCT MIX?
Combination of all the products a company sells.
What is a HIGH-LEARNING PRODUCT?
Products that take longer for consumers to see the benefits of. Ex: electric cars
What is a LOW-LEARNING PRODUCT?
Products with benefits customers can easily see. Ex: free checking account
What is a FAD PRODUCT?
Popular product for a short time.
What is MARKET SEGMENTATION?
Process of dividing a larger market into smaller groups based on meaningfully shared characteristics
What is a MARKET SEGMENT?
Homogenous groups of consumers that result from the segmentation process
What are the 2 things older people have instead of young people?
Time and money
What does the segmentation bases consist of?
Demographic, geographic, psychographic, behavioral
What 3 bases do B2B firms generally segmentate?
demographic, geographic, behavioral
What is the most beneficial segmentation base to B2B firms?
Behavioral
What 3 segments do firms typically use in international markets?
Global, regional and unique
What are the 5 criteria for effective marketing segmentations?
Substantial, measurable, differentiable, accessible, actionable
What is the Substantial criteria?
Segment must be large enough for the firm to make a profit. Ex: cereal for 100 year old people will not be profitable
What is the Measurable criteria?
The size and purchasing power of the segment must be clearly identified.
What is global segmentation?
Used when a firm can identify a group of consumers needs and wants that spans the entire globe.
What is regional segmentation?
Used when the similarity in needs and wants only extends across the region or several countries.
What is unique segmentation?
Used when the similarity in needs and wants exists only within ONE country.
What are the 3 basic strategies for targeting markets?
Undifferentiated targeting, Differentiated targeting, Niche Marketing
What is Undifferentiated targeting?
Used when a company decides to communicate the benefits of its product by sending the same promotional message to everyone.
What is Differentiated targeting?
Targeting strategy that simultaneously pursues several different market segments, usually with a dif. strategy for each
What is Niche Marketing?
Target strategy that involves pursuing a large share of a small market segment.
What is MARKET POSITIONING?
Activities a firm undertakes to create a certain perception of its product in the eyes of the target audience.
What are the 3 major steps Marketers take to decide how to best position their product?
#1: Analyze Competitors Positions #2: Clearly define your competitive advantage #3: Evaluate feedback
What is a perceptual map?
Competitive analysis tool that creates a visual picture of where products are located in consumer’s minds
What is repositioning?
Act of reestablishing a products position to respond to changes in the marketplace
CH8
PG 222
What is PROMOTION?
All the activities that communicate the value of a product and persuade customers to buy it. Ex: Red Bull
What is the PROMOTION MIX?
Subset of the marketing mix that includes 4 main elements of marketing communication
What are the 4 main elements of the PROMOTIONAL MIX?
Advertising, Sales Promotion, Personal Selling, Public Realtions
What is ADVERTISING?
NONPERSONAL promotional communication about goods, services or ideas that is paid for by the firm identified in the communication
What is SALES PROMOTION?
Set of NONPERSONAL communication tools designed to stimulate quicker and more frequent purchases of a product
What is PERSONAL SELLING?
TWO-WAY flow of PERSONAL communication between a salesperson and a customer, paid for by the firm
What is PUBLIC RELATIONS?
Communication focused on promoting positive relations between a firm and its stakeholders
What is IMC?
(INTEGRATED MARKETING COMMUNICATIONS) Promotional strategy that involves coordinating the various promotion mix elements to provide consumers with a clear and consistent message about a firms products
What are the 3 primary objectives of an ad campaign?
Informative, Persuasive, Reminder
What’s an ADVANTAGE of Internet Advertising?
Reduced Cost, Analytics, reaching consumers
What’s an DISADVANTAGE of Internet Advertising?
Cluttered ads, Privacy issues
What is CPM?
Cost-Per-Thousand-Impressions = what the firm pays for a thousand views of an ad
What is CPC?
Cost-Per-Click = Amount the firm pays each time a customer clicks on an ad.
What is CTR?
Click-Through-Rate = ratio showing how often people who see an ad end up clicking on it
What’s an ADVANTAGE of TV Advertising?
- Target specific audiences; known as narrowcasting EX: Home Channel
- Ability to add sight, sound and motion
What is narrowcasting?
Dissemination of info to a small selected audience that is defined by shared values, preferences or demographic attributes.
What’s an DISADVANTAGE of TV Advertising?
Cost, DVR
What are the 2 major ADVANTAGES to radio advertising?
Cost-Effective, allows marketers to segment effectively based on the geographic location on a radio station.
What’s an DISADVANTAGE of radio Advertising?
Audio only
What’s an ADVANTAGE of Print Advertising?
Good to advertise to local community, Magazines
What’s an DISADVANTAGE of Print Advertising?
Not primary source, competition in magazine and newspapers, short timeframe
What’s an ADVANTAGE of Outdoor Advertising?
Flexibility, reduced costs, located where they will be seen
What’s an DISADVANTAGE of Outdoor Advertising?
Less exposure time, wasted coverage
What is the most common type of sales promotion?
Coupons
What are 2 major approaches to trade sale promotions?
allowances and training
What are 4 ways organizations use public relations?
Annual Reports, speeches, blogs, brochures
In what 3 ways do firms determine there promotional budget?
Affordable method, Percentage-of-sales method, Objective-and-Task method
What is a DISADVANTAGE of the affordable method?
Firms who allocate a random dollar amount to the promotion mix guarantee virtually nothing except that the money will be spent.
What is the AFFORDABLE METHOD?
Promotion mix budgeting strategy in which firms set their promotion budget based on what they believe they can afford.
What is the PERCENTAGE-OF-SALES METHOD?
Promotion mix budgeting strategy in which firms allocate a specific percentage of a periods total sales to the promotional budget for that period. MOST COMMON
What is a DISADVANTAGE of the PERCENTAGE-OF-SALES METHOD?
Arises when firm’s sales decline, not money to advertise
What is the OBJECTIVE-AND-TASK METHOD?
Promotion mix budgeting strategy in which firm defines specific objectives, tasks to achieve them and then estimates how much it will cost. BEST ONE
What are the 4 factors differentiating services from goods?
Intangible, Heterogeneous, Perishable, Insperable
What is Inseperable?
From the point where it is consumed, used. Ex: Concert, hotel
What are the 4 types of GAPS?
Communication, Delivery, Knowledge, Standards
What are 3 ways to increase service recovery?
Resolve problem quickly, provide a fair solution, Listen to the customer
