Marketing seminar 3 pre-reading questions/notes:

Question 1

The model of level of product and services what are the 3 levels and the key ideas of this model:

Answer 1

• Core product
• Actual product
• Augmented product

Key idea - products and services can be analysed through these layers, emphasising the value offered beyond just the physical or core benefit.

Question 2

What is the core product?

Answer 2

• Not a tangible physical product.
• Core product is the BENEFIT of the product which makes it valuable to you.

Question 3

What is the actual product?

Answer 3

The tangible, physical product which you can get some use out of.

Examples: Features, brand name, design and packaging

Question 4

What is the augmented product?

Answer 4

• Mostly, the non physical part of the product.
• Usually consists of lots of added value which you may or may not pay a premium for.

Examples: Delivery, after sales service and product support.

Question 5

Kotler’s 5 product levels model:

Also, know as hierarchy of effects model.

Answer 5

• Introduced in 1967 in his book.
• Model has been widely used by managers to help with customer satisfaction and that marketers use to help understand customers purchasing decisions.
• Core benefit
• Generic level products/basic
• Expected level products
• Augmented level products
• Potential level products.

Question 6

What is the core benefit?

Answer 6

Primary need that consumers can fill by purchasing a product.

Question 7

What is the generic level products/basic?

Answer 7

Provide only the features that allow them to meet a customer’s fundamental needs.

Question 8

What are expected level products?

Answer 8

Offer the generic product plus other attributes consumers want.

Question 9

What are augmented level products?

Answer 9

Have extra and improved features that allow them to exceed their basic functions.

Question 10

What are potential level products?

Answer 10

Include all the changes that a company might add to its product in the future.

This can increase customer satisfaction and keep them actively engaged/loyal due to continuous improvements on the product.

Question 11

All stages of the product life cycle:

Answer 11

y-axis = sales
x-axis = time

R and D
launch/introduction
Growth
Maturity
Decline
Extension strategies (Ansoff’s matrix, Mp, Md, Mp and D)

Question 12

Why can the product lifecycle be helpful:

Answer 12

• Forecast sales trends
• Market targeting and positioning
• Analyse and manage a product portfolio
• Whether to focus investments in products

Question 13

R and D/development stage:

Answer 13

• Process of NPD
• Complex and costly
• May involve a long lead time before sales are achieved.

Question 14

Introduction stage:

Answer 14

• Heavy promotion is needed to make target market aware of new product
• Unit costs high, don’t benefit from EOS.
• Negative cashflow

Question 15

Growth stage:

Answer 15

• Faster increase in sales
• Gains market acceptance
• Unit costs fall with EOS

Question 16

Maturity stage:

Answer 16

• Slower sales/plateu as rivals enter, market becomes heavily saturated.
• Weaker competitors will exit the market, as price falls as competition becomes more intense.
• Larger firms, very profitable stage as little spending is needed.

Question 17

Decline stage:

Answer 17

• Falling sales
• Excess capacity and rising unit costs.
• More competitors leave the market
• Market saturation.

Usually due to technological change

Question 18

Evaluation of product lifecycle:

Answer 18

• Shape and duration of PLC with vary from product to product
• Hard to know precisely where a product is in its life cycle.
• Decline is not inevitable.

Question 19

What is the 8 step new product development process in Chapter 9, Principles of Marketing?

Answer 19

1) Idea generation
2) Idea screening
3) Concept development and testing
4) Marketing strategy development
5) Business analysis
6) Product development
7) Test marketing
8) Commercialization

Question 20

1) Idea generation:

Answer 20

• Systematic search for new product ideas.
• Major sources of new product ideas include internal (R and D) and external sources (distributors, suppliers, competitors)

Question 21

2) Idea screening

Answer 21

• Screening new product ideas to spot the good ones and bin off the bad ones.
• Product commitee to review the new product ideas against a general set of criteria

Question 22

3) Concept development and testing:

Answer 22

• Product idea being developed into a new product/product concept.
• Present ideas to committee and test.

Question 23

4) marketing strategy development.

Answer 23

• Designing an initial marketing strategy for a new product based on the product design.

Marketing strategy consists of 3 parts:
1) describing the target market
2) Outlining products planned price, marketing and distribution budget for first year.
3) Planned goals for product

Question 24

5) Business analysis:

Answer 24

Review of sales and costs and profit projections for a new product to find out whether these factors satisfy the company’s objectives.

Question 25

6) Product development:

Answer 25

• Developing the product concept into a physical product.
• Stage requires huge amounts of investment due to proper r and d.

Question 26

7) Test marketing:

Answer 26

Proposed marketing program are tested in realistic market settings.

Question 27

8) Commercialization:

Answer 27

• Introducing a new product into the market.
• Company may build/rent manufacturing facility or outsource