marketing lecture 6 (product strategy)

Question 1

product

Answer 1

good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies customers’ needs in exchange of money or something else of value

Question 2

good, service, idea

Answer 2

good –> tangible
service –> intangible activities or benefits
idea –> thought that leads to a product or activity

Question 3

how a consumer product is classified affects….

Answer 3

which product consumers buy and which marketing strategies used

Question 4

consumer product consists of

Answer 4

• the effort the consumer spends on making the decision
• the attributes the consumers use on making the purchase decision
• frequency of the purchase

Question 5

types of products

Answer 5

1. convenience –> products they buy coveniently, frequently, with minimum shopping effort
2. shopping –> products they buy by comparing the alternatives with criteria such as price, quality, or style
3. specialty –> products consumers put special effort to search and buy
4. unsought –> customers don’t know or know about but initially don’t want

Question 6

basis of comparison for types of products

Answer 6

1. price
2. product
3. place (distribution)
4. promotion
5. brand loyalty of customers
6. purchase behavior of customers

Question 7

product decisions

Answer 7

marketers makes product decisions on 3 levels :
1. product item –> a spesific product that has a unique brand, style, or price
2. product line –> a group of closely related products that satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range
3. product mix –> all the product lines in an organization

Question 8

packaging

Answer 8

any container which a product is sold in and which a label information is conveyed

Question 9

label

Answer 9

identifies a product or brand

Question 10

benefits of packaging and label

Answer 10

• communication (who made it, where and when it was made, how to use it, package content and ingridients)
• functional (provides storage, convenience, production and ensures quality)
• perceptual benefit (enhance recognition and brand association)

Question 11

challenges of packaging and label

Answer 11

• environmental concerns
• healthy, safety, and security issues
• cost reduction
• need continuous update to connect with customer

Question 12

what is a new product

Answer 12

newness compared with existing products
- if the product is functionally different from existing products, it can be defined as a new product
- revolutionary newness –> can create new industries

Question 13

newness from the customer’s perspective

Answer 13

the degree of newness in a product affects the degree of learning effort a customer must exert to use the product or resulting marketing strategies
3 types :
- continuous innovation (low)
- dynamically continuous innovation –> disrupts daily life but doesn’t learn entirely new things
- discontinuous innovation (high)

Question 14

newness from organization’s perspective

Answer 14

3 levels :
1. line extension –> extends an exisiting brand line with new flavors, sizes, colors, etc to an existing product category (low risk and low cost)
2. brand extension –> using an established brand to an entirely new product in an unfamiliar market. gives the new product instant recognition. can be risky as customers can question the relation of the established brand to the new product
3. radical inventions –> creating a truly revolutionary and innovative new product. can create a new market segment or siginificantly alter an existing segment.

Question 15

marketing reasons on new-product failures

Answer 15

• insufficient point of difference
• incomplete market and product protocol before product development
• not satisfying the customer needs on critical factors
• bad timing
• no economical access to buyers
• poor execution on marketing mix
• too little market attractiveness
• poor product quality

Question 16

product life cycle

Answer 16

• describes the stages of what new product goes through in the market place

Question 17

product life cycle stages

Answer 17

• introduction
• growth
• maturity
• decline

Question 18

introduction (PLC)

Answer 18

• the product is launched into the market
• sales starting to grow as customers become aware of the product
• high costs due to marketing, distribution, and production setup
• focuses on creating brand awareness and establishing a market presence

Question 19

growth (PLC)

Answer 19

• sales may increase as the product gains acceptance
• profits may increase as economies of scale is achieved
• competitors may enter the market, resulting in extra marketing efforts
• repeat purchasers
• focuses on differentiating the product and expanding distribution

Question 20

maturity (PLC)

Answer 20

• no more market growth as the product reaches the peak of market penetration
• fewer new buyers - mostly are repeat buyers
• intense competition leads to more price reduction and promotional offers
• marginal competitors leave the market
• market saturation occurs, brand focuses on market shares and brand loyalty

Question 21

decline (PLC)

Answer 21

• reducing sales and profits because of changing customer preferences or new technology
• companies either discontinue the product, sell it, or try to retain it but reduce marketing costs (harvesting)
• focuses on reducing costs and maximizing remaining profits

Question 22

brand

Answer 22

a name, term, design, symbol, or combination of those that identifies a seller’s products and differentiates them from a competitor’s products

a good brand adds value to the product

Question 23

brand equity

Answer 23

added value that a brand name can give to a product regardless of the functional benefits provided
- can give competitive advantage
- a brand with good brand equity can make the customers choose that brand over another even though they provide similar functional benefits

Question 24

branding strategies

Answer 24

1. multi-product branding strategies
2. multi branding strategies
3. private branding strategies
4. mix branding strategies

Question 25

multi product branding strategy

Answer 25

use one brand name for all of its products in a product class
- capitalize using brand equity
- lower promotion expenses
- line extension or brand extension

• too many uses of a brand name in products can decrease the value of a brand from a customer’s perspective

Question 26

multi branding strategy

Answer 26

give each product a distinct name
- each product is intended to a different market segment
- a failure of a product won’t affect the other products in a line
- expensive to implement

Question 27

private branding strategy

Answer 27

resellers or retailers sells products under their own brand name, although it is manufactured by a third-party manufacturer
- lower costs for the manufacturer as they only focus on producing, not manufacturing
- lower costs for the retailers as they have full control of the product’s pricing strategy

Question 28

mixed branding strategy

Answer 28

manufacturers sells products through different brandings through different channels
- some products may become private brands attached to a spesific retailers
- some products may be under the manufacturers brand but sold on different channels, or sold through the same channels with comparable quality

Question 29

uniqueness of services

Answer 29

1. intangibility –> services cannot be touched, heard, seen, tasted, or smelled before it is sold
2. inseparability –> consumers cannot distinguish and does not separate the deliverer of the service from the service itself
   pure service –> hairstylist cannot be separated from customers to enjoy a hairstyle service
   pure goods –> car manufacturer are separated from the customers
3. inconsistency –> the quality of services may vary greatly, depends on who delivers the service, when, where, and how
4. inventory –> services cannot be stored for later use or sale (idle production capacity is when the deliverer of the service is available but there is no demand for the service

Question 30

marketing 7 Ps of service marketing

Answer 30

• product
• price
• promotion
• place
• physical environment –> physical environment of the service
• process –> actual process of the making of the service
• people –> focus on its employees first (internal marketing), before doing it to customers