LECTURE 7 - PRODUCTS, SERVICES, BRANDS

Question 1

What are types of consumer goods?

Answer 1

• convenience goods: low-cost, frequent purchases (eg. toothpaste)
• shopping goods: higher-priced, comparison shopping (eg. cameras)
• specialty goods: unique, expensive items (eg. Rolex)
• unsought goods: not typically purchased without prior planning (eg. insurance)

Question 2

define core product

Answer 2

the fundamental benefit (eg. communication for smartphones)

Question 3

define actual product

Answer 3

the tangible features (eg. the phone’s operating system, camera)

Question 4

define augmented product

Answer 4

added services (eg. warranties, tech support)

Question 5

define branding

Answer 5

name, symbol, or design that differentiates a product from competitors

Question 6

advantages of branding for buyers

Answer 6

simplifies product identification, speeds up decision-making, reduces risk

Question 7

advantages of branding for sellers

Answer 7

basis for product differentiation, legal protection, market segmentation

Question 8

define brand advocates

Answer 8

customers who actively promote a brand, increasing trust and visibility

Question 9

define brand communities

Answer 9

groups of consumers connected through shared brand experiences (eg. Harley-Davidson, Apple)

Question 10

define brand personality

Answer 10

human traits associated with a brand (eg. Nike is exciting, Apple is innovative)

Question 11

importance of brand personality

Answer 11

builds emotional connections and trust with consumers

Question 12

define brand equity

Answer 12

the added value a brand brings to a product, reflected in consumer preferences, loyalty and willingness to pay a premium

Question 13

examples of valuation methods

Answer 13

• income-based: projecting future earnings
• market-based: comparing similar brands
• cost-based: evaluating the costs of building the brand

Question 14

brand development strategies: line extension

Answer 14

adding new products to an existing category (eg. diet coke)

Question 15

brand development strategies: brand extension

Answer 15

expanding a brand into new categories (eg. Virgin from airlines to hotels)

Question 16

brand development strategies: multi-branding

Answer 16

offering multiple brands in the same category (eg. P & G with Tide and Gain)

Question 17

brand development strategy: new brands

Answer 17

launching an entirely new brand for a different market segment

Question 18

examples of brand extensions - successful

Answer 18

• apple: from computers to mobile devices
• nike: from shoes to sports apparel
• starbucks: from cafes to grocery store products

Question 19

examples of brand extensions - unsuccessful

Answer 19

• Colgate kitchen entrees: consumers couldn’t associate the brand with food
• Harley-Davidson perfume: failed to align with the brand’s image

Question 20

new product development process

Answer 20

1. idea generation: brainstorming and gathering ideas
2. idea screening: filtering out low-potential ideas
3. concept development and testing: creating and testing product concepts
4. business analysis: assessing costs, pricing, and market potential
5. product development: designing and prototyping
6. market testing: testing product performance in real markets
7. commercialization: full-scale product launch
8. post-launch evaluation: gathering feedback and making adjustments

Question 21

explain product life cycle (PLC)

Answer 21

• stages: introduction, growth, maturity and decline
• challenges: hard to predict stages and transitions; difficult to estimate sales and strategy

Question 22

define strategies for extending PLC

Answer 22

• modify the product (eg. iPhone)
• repositioning (eg. Listerine as both mouthwash and disinfectant)
• expanding markets (eg. ED-40)