Test 2 Flashcards
Diffusion of Innovation
Innovators - venturesome - 2.5% Early Adopters - opinion leaders - 12.5% Early Majority - deliberate - 35% Late Majority - skeptics - 35% Laggards - tradition - 15%
Product characteristics that affect the spread of new products:
Complexity Compatibility Relative Advantage Observability Trialability
Define Product
Everything, both favorable and unfavorable, that a person receives in an exchange.
What is the difference in a consumer and a business product?
A consumer product is bought to satisfy an individual’s personal wants or needs. A business product is used to manufacture other goods or services, to facilitate an organization’s or to resell to other customers.
What are the 4 categories of consumer products?
- Convenience product
- Shopping product
- Specialty product
- Unsought product
Define convenience product
A relatively inexpensive item that merits little shopping effort.
Define shopping product
A product that requires comparison shopping because it is usually more expensive than a convenience product and is found in fewer stores.
Define specialty product
A particular item for which consumers search extensively and are very reluctant to accept substitutes.
Define unsought product
A product unknown to the potential buyer or a known product that the buyer does not actively seek.
What is a product item?
A specific version of a product that can be designated as a distinct offering among an organization’s products.
What is a product line?
A group of closely related product items.
What is a product mix?
All products that an organization sells.
What is a brand?
A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products.
What is the difference between a brand name, a brand mark, a trademark, and a service mark?
brand name = part of a brand that can be spoken
brand mark = elements of a brand that cannot be spoken (Mercedes symbol)
trademark = exclusive right to use a brand or part of a brand
service mark = a trademark for service
Name 6 branding concepts.
- General
- Manufacturer
- Private
- Individual
- Family branding
- Cobranding
Name 4 important characteristics of packaging.
- V - Visibility
- I - Information
- E - Emotion
- W - Workability
Define implied warranty and give an example.
An unwritten guarantee that the good or service is fit for the purpose for which it was sold.
Define express warranty and give an example.
A written guarantee.
What are the 6 categories of new products?
- New-to-the-world
- New product lines
- Additions to existing product lines
- Improvements or revisions of existing products
- Repositioned products
- Lower-priced products
Describe “new-to-the-world” as a category of new products and give an example.
AKA “discontinuous innovation”
These products create an entirely new market.
Example: Polytron Technologies’ see through smart phone.
Describe “new product lines” as a category of new products and give an example.
These products, which the firm has not previously offered, allow it to enter an established market.
Example: Moleskine’s first products were journals, now they also have a line of office supplies.
Describe “additions to existing product lines” as a category of new products and give an example.
New products that supplement a firm’s established line.
Example: Taco Bell and the Doritos locos taco.
Describe “improvements or revisions of existing products” as a category of new products and give an example.
“new and improved”
Example: new scents of Tide detergents
Describe “repositioned products” as a category of new products and give an example.
These are existing products targeted at new markets or market segments, or ones repositioned to change the current market’s perception of the product.
Example: Ford redesigning the Mustang for the younger generations.
Describe “lower priced products” as a category of new products and give an example.
Products that provide performance similar to competing brands at a lower price.
Example: HP’s all-in-one printer.
List the 6 steps of the new product development process.
- Idea generation
- Screening
- Business Analysis
- Development
- Test Marketing
- Commercialization
What are the 4 categories of adopters in the diffusion of a new product?
- Innovators
- Early Adopters
- Early Majority
- Late Majority
- Laggards
What are characteristics of “innovators”?
- First 2.5% of all those who adopt a product.
- Eager to try new ideas
- Higher incomes
- Self-confident
- Well educated
- Get information from scientific sources and experts.
What are characteristics of “early adopters”?
- Next 13.5% (after innovators) to adopt a product
- Adopt early in product’s life cycle.
- Rely a little more on group norms and values.
- more likely to opinion leaders
- Not distinguished by demographics but by behavior.
- All ages, gender and income groups.
- Desire to earn respect
What are characteristics of “early majority”?
- Next 34% (after early adopters) to adopt a product
- Weighs pros and cons before adopting
- Evaluates more brands
- Rely on the group for information
- Unlikely to be opinion leaders
What are characteristics of “late majority”?
- Next 34% (after early majority) to adopt a product
- Pressure to conform
- Older and below average income and education
- dominant trait: Skeptic
- Rely on word of mouth marketing
What are characteristics of “laggard”?
- Final 16% (after late majority) to adopt a product
- Independence is rooted in ties to tradition
- Longest adoption time
- lowest socioeconomic status
- dominant value: tradition
What are the 5 characteristics that can be used to predict and explain the rate of acceptance and diffusion of a new product?
- Complexity - how hard the product is to use
- Compatibility - does it meet your needs and is it user-friendly
- Relative advantage - how much the product is perceived as superior to existing products
- Observability - how much the product is in the eyes of potential buyers
- Trialability - Can it be tested?
List the four stages of the product life cycle (PLC).
- Introductory stage
- Growth stage
- Maturity stage
- Decline stage
Describe the introductory stage.
The full scale launch of a new product into the marketplace.
- High failure rate
- Little competition
- Frequent product modification
- Limited distribution
- High marketing/advertising costs
- Sales increase slowly
Describe the growth stage.
When sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthy.
Describe the maturity stage.
A period during which sales increase at a decreasing rate.
- Longest stage of PLC.
- Emergence of “niche marketers”
- Product design changes become stylistic
Describe the decline stage.
A long-run drop in sales.
- Governed by how rapidly consumer tastes change
- Products are eventually removed from market.
How do services differ from goods?
- Intangibility
- Inseparability
- Heterogeneity
- Perishability
Define intangibility.
The inability of services to be touched, seen, tested, heard, or felt in the same manner that goods can be sensed.
Define inseparability.
The inability of the production and consumption of a service to be separated, consumers must be present during the production.
Define heterogeneity.
The variability of the inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods.
Define perishability.
The inability of services to be stored, warehoused, or inventoried.
What are the 5 characteristics of service quality?
- Reliability
- Responsiveness
- Assurance
- Empathy
- Tangibles
What is a core service?
The most basic benefit the consumer is buying.
What is supplementary service?
A group of services that support or enhance the core service.
Why is internal marketing critical in service firms?
In service industries, employees deliver the brand promise - their performance as a brand representative - directly to customers.
