Unit 9 Flashcards
Define product.
A bundle of tangible and intangible benefits that a buyer receives in exchange for money and other considerations.
Define good.
Physical/virtual item capable of being delivered to a purchaser (Ie. the customer).
Define durable good.
Goods that last over an extended number of uses.
Define non-durable good.
Goods consumed in one or a few uses.
Define service.
Action or activities resulting in a measurable change of state for the purchaser caused by the provider.
Define tangible.
Physical characteristics that are discernible by the senses (eg. colour, taste, smell).
Define intangible.
Symbolic or subjective characteristics (eg. stylish, reliable, comfortable).
What is the goods-services continuum?
The continuum defines products as being a combination of a good and service depending on its placement on the continuum.
What are the four types of products?
- Convenience
- Shopping
- Specialty
- Unsought
How is the type of a product categorized?
- Effort put into purchase
2. Frequency of purchase
Define convenience goods.
Those goods that consumers purchase frequently, with a minimum of effort and evaluation.
For marketers: packaging, price, availability.
Define shopping goods.
Goods that the consumer compares on such bases as quality, price, suitability, and style before making a selection.
For marketers: effective messaging.
Define specialty goods.
Goods that consumers will make an effort to find and purchase because the foods possess some unique or important characteristic.
For marketers: quality, brand status.
Define and describe unsought goods.
- Consumers do not seek the product
- Two reasons:
1. Unknown to customer
2. Not of interest to customer at the current state - Delay of benefits
- For marketers: heavy advertising (awareness, value, counter negative attitudes)
Define total product concept.
- The package of benefits a buyer receives when he or she purchases a product
- Conceptualization of a product that helps to identify its major benefits (core, actual, augmented)
Define and describe core product.
- Basic definition of a product
- Fundamental benefits derived from using the product
Define and describe actual product.
- Additional features, characteristics on top of the core benefits
- Attributes that deliver the intended benefits
- Features a customer takes into consideration when buying a product
- Use branding, packaging, design, etc to differentiate product
Define and describe augmented product.
- Additional features that the buyer may not require
- Non-tangible, service-related
- Create better customer experience
Define product mix.
The total range of products offered for sale by a company. The collection of product lines and product items that a firm tries to market.
Define product item.
A unique product offered by sale by an organization.
Define unique selling point (USP).
The primary benefit of a product or service, the one feature that distinguishes a product from competing products.
Define product line.
- A grouping of product items that have major attributes in common but that may differ in size, function, or style
- Marketed under single brand name
- Offered by the same company
Define product line width.
Number of product lines in the mix.
Define product line depth.
Number of product items in the product line.
What are the two ways that a product is divided?
- A product is classified according to the target market it is intended for
- A product is classified according to the durability and tangibility it offers
What are the two groups of who buys products and why?
- Consumer goods
2. Industrial (business) goods
Define consumer goods.
Products and services ultimately purchased for personal use.
What are the three categories of consumer goods?
- Convenience 2. goods
- Shopping goods
- Specialty goods
Define industrial goods.
Products and services purchased by businesses, industries, institutions, and governments that are used directly or indirectly in the production of another good or service that is resold, in turn, to another user (probably a consumer).
What are the three categories of industrial goods?
- Capital goods
- Parts and materials
- Supplies and services
Define capital goods.
Expensive goods with a long life span that are used directly in the production of another good or service. Whether an item has a direct or indirect role in the production proceeds determines which of the the two types of capital item it is.
Define installations.
Major capital items used directly in the production of another product.
Eg. Buildings, production line equipment, and computer systems.
Define accessory equipment.
Items, such as computers and power tools, that facilitate an organization’s operations indirectly.
Define parts and materials.
Less expensive goods that directly enter a manufacturer’s production process. Goods are an integral part of the customer’s product and affect its category.
What are the three categories of parts and materials?
- Raw materials
- Processed materials
- Component parts
Define raw materials.
Farm goods and other materials derived directly from natural resources (eg. crude oil, wheat)
Define processed materials.
Materials that are used in the production of another product but are not readily identifiable with the product.
Define component goods.
Goods that are used in the production of another good but do not change form as a result of the manufacturing process.
Define supplies.
Standardized products that are routinely purchased with a minimum of effort.
What are the three categories of supplies?
- Maintenance - eg. paints
- Repair - eg. bearings and gears
- Operating supplies - eg. writing instruments, paper and stationary
What are the decisions made in developing a brand strategy?
- Decisions must be made regarding the brand name and logo
- Decisions are made about the design of the package (if it is a packaged good) and what information the label must communicate
Define brand.
A name, term, symbol, or design, or some combination of these, that identifies a good or service.
Define brand name.
That part of a brand that can be spoken.
Define brandmark (logo).
That part of a brand identified by a symbol or design.
Define trademark.
That part of a brand granted legal protection so that only the owner can use it.
Define patent.
A provision that gives a manufacturer the sole right to develop and market a new product, process, or material.
Define national brand.
A brand spread nationwide.
What are the two branding strategies of national brands?
- An individual brand strategy
2. Family brand strategy
Define individual brand strategy.
The identification of each product in a company’s product mix with its own name.
Define multibrand strategy.
The use of a different brand name for each item a company offers in the same product category.
Define family brand.
The use of the same brand name for a group of related products. Family brand names are usually steeped in tradition and quickly come to mind because they have been on the market for a long time.
Family brands may embrace the company name or may be a name that a company has popularized over an extended period.
What are the advantages of a family brand strategy and a disadvantage?
- Two advantages of a family brand strategy:
1. Promotional expenditures for one product will benefit the rest of the family by creating an awareness of the brand name
2. Consumers and distributors accept new products more readily because the products capitalize on the success and reputation of the existing family products - -> Referred to as the halo effect
- Disadvantage:
1. The failure or poor quality of a new product could tarnish the image of a family of products - -> These products are usually removed from the market quickly by the organization
Define co-branding.
Occurs when a company uses the equity in another brand name to help market its own brand-name product or service (two brand names on a product); also applies to two organizations sharing.
Define private-label brand.
A brand produced to the specifications of the distributor, usually by national brand manufacturers that make similar products under their own brand names - also called a store brand.
What is a three-and-out approach?
- Either you are among the top three brands in a given category or you are out
- Some manufacturers withdraw from the market
Define generic brand.
A product without a brand name or identifying features.
Define licensed brands.
Occurs when a brand name or trademark is used by a licensee.
Define cult brands.
A brand that captures the imagination of a small group of devotees who then spread the word, make converts, and help turn a fringe product into a mainstream name.
What are brand evangelists?
Average everyday people who actively promote their favourite brands to others.
What are the benefits of good branding strategies?
- A good brand name accompanied by an attractive, attention-getting package (for a nondurable good) or good brand design (for a durable good or service) will effectively communicate the point of difference (USP) and highlight the distinctive value added
- Good branding strategy enables the marketer to create and develop an image for the brand
- -> The brand experience comes to life through brand design and marketing communications
- -> Eg. A good slogan - Consumers remain loyal to brands that consistently meet their expectations
Define brand loyalty.
The degree of consumer attachment to a particular brand, product, or service.
How is brand loyalty measured?
Brand loyalty is measured in three stages:
- Brand recognition
- Brand preference
- Brand insistence
Define brand recognition.
Customer awareness of the brand name and package. Once awareness is achieved, a brand may offer customers incentives such as free samples or coupons to tempt them to make the first (trial) purchase.
Define brand preference.
The stage of a product’s life at which it is an acceptable alternative and will be purchased of it is available when needed.
If it is unavailable, the consumer will switch to an equal, competitive alternative.
Define brand insistence.
At this stage, a consumer will search the market the market extensively for the brand he or she wants.
No alternatives are acceptable, and if the brand is unavailable, the consumer is likely to postpone purchase until it is.
Define brand equity.
The value a consumer derives from a product over and above the value derived from its physical attributes.
How is equity measured?
- Name awareness
- A loyal customer base
- Perceived quality
- The brand’s association with a certain attribute
Define price.
Money or other something of value exchanged for the ownership or use of a product.
What are the four approaches to price?
- Demand-oriented
- Competition-oriented
- Cost-oriented
- Profit-oriented
Describe penetration pricing.
- Set a low initial price on a new product to appeal to the mass market, then increase the price over time
- Seen when company produces new products
- Generates interest
- Attracts customers from competitors
- May not retain customers
Describe price skimming.
- Set the initial high price that consumers desiring the product are willing to pay, lower the price once demand of these consumers are satisfied
- Generates revenue early
- Creates perception of high quality
- -> High price = high quality to some customers
- Can encourage entry of competitors
Describe prestige pricing.
- Product price is set high and remains high
- Effective for products intended to be status symbols
- High profits
- Potential for limited customer base
- Sound reputation needed
Describe odd-even pricing.
- Set prices a few dollars or cents under a target price
- Consumers tend to look at the few digits of the price and then skim the rest
- Creates the illusion of a bargain
- Product may be perceived as being of lower quality
- Pricing can be seen as manipulative
Describe below-market pricing.
- Setting a price lower than that of competitors
- Attracts price-conscious shoppers
- These shoppers do not care more about quality; prioritize price
- Allows for larger sales volumes
- Product may be perceived as being of low quality
Describe loss leader pricing.
- Product is sold at a price that is not profitable in hopes that customers will buy additional regularly priced products
- Common for new businesses
- Hooks customers through low prices
- Done online, at brick and mortar stores
- Helps to build a customer base
- Can attract “cherry picking” buyers
Define retailing.
Sale of product from a point of purchase directly to a customer who intends to use that product.
Define retailing utility.
Usefulness or value provided by a retailer.
What are the four components of retailing utility?
- Place
- Possession
- Form
- Time
Describe place utility.
Making products easily accessible to potential customers.
Describe possession utility.
- Increased ease of ownership
- -> How easily is it for customers to own the products
- Concerns payment, affordability
Describe form utility.
Degree to which product design meets customer needs.
Describe time utility.
Making products available when customers need them.
Describe independent retailers.
- Owned by individual, family, partnership
- Owners responsible for decision-making
- Few locations - 1-3
- Higher prices
Describe corporate chains.
- Multiple outlets under common ownership
- Largely centralized control
- Lower prices
- Larger inventory
Describe a contractual system (franchise).
- Agreement between an individual and a business to operate an outlet
- Greater independence
Define promotion.
Communication or activity intended to persuade target market of the merits of a given product.
Define sales promotion.
Any activity that provides special incentives to bring about immediate action from consumers, distributors, and an organization’s sales force.
What are the two kinds of sales promotion?
- Consumer promotion
2. Trade promotion
What is the difference between consumer and trade promotion?
- Consumer-oriented promotions help pull a product through the channel
- Trade-oriented promotions help push a product through the channel by offering channel members incentives to perform marketing functions on behalf of the product
Define consumer promotion.
Activity promoting extra brand sales by offering the consumer an incentive over and above the product’s inherent benefits.
What are the objectives of consumer promotions?
- Trial purchase
- Repeat purchases
- Multiple purchases
Define coupon.
Price-saving incentive offered to consumers by manufacturers and retailers to stimulate purchase of a specified product.
Define redemption rate.
The number of coupons returned to an organization expresses as a percentage of the total number of coupons in distribution for a particular coupon offer.
Define free sample.
A free product distributed to potential users either in a small trial size or its regular size.
Define contest.
A promotion designed to create short-term excitement about a product that usually provides an incentive to buy an item, requiring, for example, the submission of a product label or symbol and an entry form that is included with the product. Contests are governed by laws and regulations.
Define sweepstake.
A type of contest involving the giveaway of products and services of value to randomly selected participants who have submitted qualified entries.
Define game (instant-win contest).
Promotional vehicle that includes a number of predetermined, pre-seeded winning tickets in the overall, fixed universe of tickets.
Define cash refund.
Predetermined amount of money returned directly to the consumer by the manufacturer after the purchase has been made.
Define premium.
An item offered offered for free or at a bargain price to customers who buy another specific item or make a minimum purchase.
How are premiums offered to consumers?
- A mail-in (send in proofs of purchase and the item will be returned by mail)
- In-pack or on-pack promotion (an item is placed inside a package or attached to a package)
- A coupon offer distributed by in-store shelf advertisements
Define loyalty (frequent buyer) programs).
Offers the consumer a small bonus, such as points or “play money,” when they make a purchase; the bonus accumulates with each new purchase.
Define delayed-payment incentive promotions.
Incentive promotion allowing the consumer a grace period during which no interest or principal is paid for the item purchased.
Define public relations.
A variety of activities and communications that organizations undertake to monitor, evaluate, and influence, the attitudes, opinions, and behaviours of their publics.
What are the areas that public relations is involved in?
- Corporate communications
- Reputation management
- Publicity generation
- Fundraising
Define corporate advertising (in corporate communications).
A paid form of advertising designed to create a favourable image for an organization among its publics.
Describe reputation management.
- The final outcome of a crisis often depends on how effectively a firm manages its public relations activity
- When facing a crisis situation, acting quickly and decisively is the approach recommended by experts
- The objective is to reassure the public that everything possible is being done to correct the situation
- A company must take control of the communications agenda early and ensure that messages are credible from the onset
- The ultimate measure of how well a company handles a crisis is determined by sales
Define publicity.
News about a person, product, idea, or service that appears in the print or broadcast media.
What is the difference between paid medium and earned media?
Paid media - the message is predetermined and controlled, the intention of publicity is to generate media coverage or earned media
Earned media - free media exposure
Define product seeding.
Placing a new product with a group of trendsetters who in turn influence others to purchase the product.
Define word-of-mouth marketing.
Recommendations by satisfied consumers to prospective consumers about a good or service.
Describe how public relations is involved in publicity generation.
Publicity generation can help raise awareness, build relationships with customers, engage target audiences, and attract new clients.
Describe how public relations is involved in fundraising.
- Public relations play a role in the not-for-profit marker sector
- Used to educate the public about how funds are used, to solicit commitment, to predispose people to give, and to make people feel good about giving
- Creates a positive image and secure support by conveying the purpose of the organization
Define press release.
A document prepared by an organization containing public relations information that is sent to the media for publication or broadcast.
Define press conference.
A gathering of news reporters invited to a location to witness the release of important information about a company or product.
Define press kit.
The assembly of relevant public relations information into a package (eg. press releases, photographs, schedules) that is distributed to the media for publications or broadcast.
How is a website apart of public relations?
- A website can be an effective public relations tool because it communicates information about a company and its products
- Visitors of a website form an impression about a company based on the experience they have at the site
- The site must load quickly and be easy to navigate
- The visit is enhanced if entertainment or an interactive activity is included
- The website provides an opportunity to inform the public of an organization’s latest happenings
How is social media apart of public relations?
- When using social media communications, it is important to be as transparent as possible while engaging consumers in the conversation
- With social media, the goal is information sharing in a friend network, a concept referred to as shared media
Define experiential marketing.
A type of marketing that creates awareness for a product by having the customer interact directly with the product (eg. distributing free samples of a product at street level).
Define event marketing.
The design and development of a live “themed” activity, occasion, display, or exhibit that promotes a product, cause, or organization.
Define event sponsorship.
A situation in which a sponsor agrees to support an event financially in return for advertising privileges associated with the event.
What is a sport sponsorship?
Sports sponsorship occurs at amateur and professional levels and can be subdivided into classifications from local events to global events. Organizations choose between spending locally, to support community events at relatively low cost, to investing in national and international sponsorships at significantly higher cost.
Define venue marketing.
A form of event marketing in which a company or brand is liked to a physical site, such as a stadium, arena, or theatre (eg. Air Canada Centre).
Define value-added sponsorships.
A component of sports sponsorships where the objective is to generate significant media exposure based on a marketer’s sponsorship agreement.
Define ambush marketing.
A strategy used by non-sponsors to capitalize on the prestige and popularity of an event by giving a false impression that they are sponsors.
What are the purpose of festival, fair, and annual event sponsorships?
- These events offer opportunities to reach adult target audiences
- Film and other types of festivals offer customized packages suitable to a marketer’s needs (ie. customized sponsorships)
- While sports sponsorships attract a mass audience, sponsorships of festivals and annual events attract a class audience by meeting different marketing objectives for an organization
What is the purpose of a cultural and arts sponsorship?
- The audience reached is smaller for these sponsorships (Can be an advantage or disadvantage depending on the objective/image of the organization)
- Companies receive goodwill from the public for sponsoring the arts
- Firms view these sponsorships as part of their corporate citizenship objectives
What are some cause marketing considerations?
- Cause marketing involves a partnership between a company and a non-profit entirety for mutual benefit
- The relationship can have a positive effect on the consumer’s perception of the brand
Define personal selling.
Face-to-face communication involving the presentation of features and benefits of a product or service to a buyer for the purpose of making a sale.
What is the role of the contemporary salesperson?
- Gathering market intelligence
- Problem solving
- Locating and maintaining customers
- Follow-up service
What are the steps in the selling process?
- Prospecting
- Pre-approach
- Approach
- Presentation
- Handling Objections
- Closing
- Follow-up
Define prospecting.
A systematic procedure for developing sales leads.
Define referral.
Occurs when a salesperson secures names of potential customers from satisfied customers and makes an initial contact by telephone to arrange a time for a face-to-face meeting.
Define and describe pre-approach.
Gathering information about potential customers before actually making sales contact. During this stage, customers are qualified, which is the procedure for determining if a prospect needs the product, has the authority to buy it, and has the ability to buy it.
Define and describe approach.
The initial contact with the prospect, usually a face-to-face selling encounter.
In the first few minutes of a sales interview, the salesperson must capture the attention and interest of the buyer so that an effective environment is created for the presentation of the product’s benefit.
Define and describe presentation.
The persuasive delivery and demonstration of a product’s benefits.
An effective sales presentation shows the buyer how the benefits of the product satisfy his or her needs or help resolve a particular problem.
Define demonstration.
An opportunity to show a product in action; it helps substantiate the claims that the salesperson is making.
Define and describe objection.
An obstacle that the salesperson must confront and resolve if the sales transaction is to be completed.
An objection is a cue that the buyer wants more information before making a decision.
The seller must view the objection as useful feedback and should respond to it accordingly.
Define closing.
The point in the sales presentation when the seller asks for the order. A good salesperson attempts a close whenever a point of agreement is made with the buyer.
Define trial close.
An attempt to close that failed.
Salesperson will move on to the next point in the presentation.
Define follow-up.
An activity that keeps salespeople in touch with customers after the sale has been made to ensure that the customer is satisfied.
Define advertising.
Paid form of media used to communicate to consumers about a product/brand.
What are two tactics in advertising?
- Shock appeal
2. Sex appeal
Describe the shock appeal in advertising.
- Words, images. and/or actions intended to deliberately startle and offend viewers
- May contain controversial, disturbing, provocative elements/content
- Intended to capture (of both customer base and potential customers)
- Shock appeals capture fleeting attention - we have selective attention
- May have a negative impact on brand image
Describe the sex appeal in advertising.
- Words, images, and/or actions intended to deliver a message designed to evoke sexual thoughts, feelings, and/or arousal in a target audience
- May be explicit or subtle
- May be related or unrelated to product
- Appear to attract consumer attention
- Appear to distract from processing of advertised message
