Product Flashcards
What is a product?
Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.
Include products and services.
What is a service?
Form of a product that consists of activities, benefits, or satisfactions offers for sale that are technically intangible and do not result in the ownership of anything
What are the levels of products?
- Core customer value - what the buyer is actually buying e.g satisfy their thirst
- Actual product e.g coffee
- Augmented product - additional consumer services and benefits e.g WiFi
All done to creat value that customers want in stage one.
What’s a consumer product?
Bought by final consumers for final consumption.
Classified into convenience, shopping, specialty and unsought.
What is a convenience product?
Customers usually buy frequently, immediately, and with minimal comparison and buying effort e.g. eggs
- low price
- mass promotion
- widespread distribution
What is a shopping product?
The customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price and style e.g. a tv
- higher price
- selective distribution
- advertising and personal selling
What is a specialty product?
Has unique characteristics or brand identifications for which a significant group of buyers is willing to make a special purchase effort e.g designer clothes.
- brand preference
- High price
- exclusive distribution
- targeted promotion
What is a unsought product?
Consumer doesn’t know or does know but wouldn’t consider buying e.g. life insurance
- price and distribution vary
- aggressive advertising
What is an industrial product?
A product bought by individuals and organisations for further processing or for conducting a business e.g. raw materials like wheat
What is product decision steps?
- Product attributes
- Branding
- Packaging
- Labelling and logos
- Product support services
What does product attributes include?
- Quality (Product quality is the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs). Product quality has two dimensions: level and consistency e .g. Ryanair have low level of quality compared to BA but they are very proud of how consistent they are being on time. TQM e.g. Ford used after assembly line, now moved onto lean six sigma production.
- Product features are a competitive tool for differentiating the company’s product from competitors’ products.
- Style describes the appearance of a product. Design contributes to a product’s usefulness as well as to its looks, both add customer value.
What is a brand?
A name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service
What does a brand do?
- Advantages to consumers and sellers e.g. trademark
- Brand equity
what are the characteristics of a successful brand?
Characteristics of successful brand
o Excels at delivering benefits customers truly desire; is properly positioned
o Stays relevant but consistent
o Pricing strategy based on customers’ perceptions of value
o Brand portfolio and hierarchy makes sense
o Monitors equity and uses full repertoire of marketing activities to build equity
o Managers understand brand’s meaning to consumers
o Brand given proper support, sustained over the long run
What is brand equity?
the differential effect that knowing the brand name has on customer response to the product and its marketing. It is the added value of a product being branded rather than not branded. BE is high when costumer sees product as highly relevant to them and when they know about brand e.g. Apple now more expensive than 80’s when less people knew about them.
Types of branding
- Brand positioning
- Brand Name
- Brand sponsorship
- Product line: Stretching - adding items to line e.g. McDonalds adding quarter pounder. Filling - adding sizes or styles e.g. Hoover offer diff models in diff sizes. Contracting product line - dropping items
- Product mix
- Brand development
What is product support services?
- survey customers periodically to assess the value of current services and to obtain ideas for new ones.
- take steps to fix problems and add new services that will both delight customers and yield profits to the company
What are the four services characteristics?
- Intangible e.g. Banking
- Inseparability e.g. Doctors
- Perishable e.g. can’t store for future use
- Variability e.g. in level of quality (vary dr by dr?)
What is internal services marketing?
Internal marketing means that the service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction.
so between company and employees.
What is interactive services marketing?
Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter.
so between the customers and employees.
What is Young& Rubicam’s Brand Asset Evaluator?
Measures brand strength along four consumer perception dimensions:
- Differentiation (what makes the brand stand out)
- Relevance (how consumers feel it meets their needs)
- Knowledge (how much consumers know about the brand)
- Esteem (how highly consumers regard and respect the brand)”
What is the branding strategy?
- Brand positioning
- Brand name selection
- Brand sponsorship
- Brand development
what is brand value?
total financial value of a brand
what is brand positioning?
3 levels:
- based on product attributes (worst one, competitors can copy easily) e.g. Dyson ball
- based on a desirable benefit e.g. John Lewis ‘never knowingly undersold’
- Based on strong beliefs and values (best one, engages on emotional level) e.g, Hovis farmers lad advert.
a brand name should…
- suggest qualities
- easy to remember and pronounce
- distinctive
- extendable
- translate easily
- capable of legal protection
What is brand sponsorship?
A brand created and owned by a reseller of a product or service.
A manufacturer has four sponsorship options: Manufacturer’s brand e.g Coke
Store brand E.g. own brand
Licensed brand e.g. Disney
Co-branding e.g Fiat and Arbarth
Brand development strategies?
Line extension (existing, existing)ne.g. Quarter pounder Brand extension (New PC, existing) e.g. added chicken selects (already had chicken nuggets) Multibrands (New BN, existing) e.g. P&G New brands (new,new) e.g. McDonald's open new store not called McDonald's
top of table product category
side of table brand name
existing, New
New Product development steps
- Idea generation
- Product concept development and screening
- Marketing strategy
- Business analysis
- Technical development
- Test marketing
- Commercialisation
Types of idea generation:
- Continuous innovation: modification of an existing product that sets one brand apart from its competitors e.g. IPhone continuous improvements.
- Dynamically continuous innovation: change in an existing product that requires a moderate amount of learning or behaviour change e.g. when Siri was added, consumer had to learn how to use.
- Discontinuous innovation: totally new product that creates major changes in the way we live e.g. when smart phones were made.
Three steps of development and testing
- Idea screening
- Technical success indicates that a product concept is feasible purely from the standpoint of whether or not it is possible to physically develop it
- Commercial success indicates that a product concept is feasible from the standpoint of whether the firm developing the product believes there is or will be sufficient consumer demand to warrant its development and entry into the market. - Concept development
- several descriptions of the product are generated to find out how attractive each concept is to customers. From these concepts, the best one is chosen. - Concept testing
- calls for testing new product concepts with groups of target consumers e.g. driverless cars. Once developed can the test.
- Needs to be technically viable e.g. Apple testing process before phones are made.
NPD marketing strategy considerations
Designing marketing strategy for new product based on concept.
- Target market
- Positioning (value proposition)
- Goals (market share, profits)
- Short-term strategy (4 Ps)
- Long-term strategy (4 Ps)
What is business analysis?
- Estimating costs, sales, profitability. Data on related products is very useful.
What is technical development?
- figure out all the possible problems, and make sure it has all the physical attributes you wanted it to have.
- Prototyping (and patenting?)
- Desired physical and psychological characteristics
- Test with small groups of consumers
What is test marketing?
- The stage at which the product and marketing program are introduced into realistic market settings
- Trading off information vs cost and delay
- Standard vs controlled vs simulated test markets
What is commercialisation?
- Should we go ahead at all?
- Timing
- Geographical rollout
What is the product life cycle?
The course of a products sales and profits over its lifetime.
- Product development
- Introduction
- Growth
- Maturity
- Decline
Introduction characteristics and strategies:
- slow sales
- negative profit
- innovator customers
- few competitors
- use cost-plus pricing
- selective distribution
- product awareness targeted at innovators
- heavy sales promotion to enhance trial
e.g Big Mac sauce
Growth characteristics and strategies:
- rapid acceptance, so sales
- profits
- av cost per customer
- early adopter customers
- growing no. of customers
- off product extension e.g. warranty
- price to penetrate market
- build engagement in mass market
- reduce promotion and take advantage of demand
e.g. 3D TV
Maturity characteristics and strategies:
- sales slow/peak
- profit still high but levels off
- low cost per customer
- mainstream adopters
- competitors beginning to decline
- diversify brand
- price match
- intensive distribution
- stress differentiation
- encourage brand switching
e.g. laptops
Decline characteristics and strategies?
- sales drop
- profit drop
- lagging adopters
- declining competitors
- phase out weak items
- cut price
- selective distribution
- reduce advertising to just keep loyal customers
e.g. radios
