week 7 Flashcards
What is the kind of innovation that requires all brand new learning?
discontinuous innovation
What is another name for multiproduct?
family branding and umbrella branding
What are the 4 P’s?
product, price, promotion, place
What are the 4 C’s?
customer solution, customer cost, convenience, communication
What is value?
a customer’s subjective assessment of benefits relative to costs in determining the worth of a product
How do we calculate value?
value = customer benefits - customer costs
What are three things that you have to do before differentiating your product?
show your customer what they can achieve by using your brand, leverage your points of parity, and make your points of difference compelling
What does it mean to leverage your points of parity?
consumer must perceive your product to be a legitimate and credible player in the frame
What is the distribution channel?
a set of interdependent organizations involved in the process of making a product or service available for use by the consumer or business user
What does a distribution channel look like?
manufacturer -> distributor -> retailer -> consumer
What is supply chain?
all the activities necessary to turn raw materials into a good or service and put it in the hands of the consumer
What is a direct channel structure?
company to consumer (e.g. etsy, farmer’s market)
What is an indirect channel?
either company, wholesaler, retailer, customer, or same but without wholesaler
What are hybrid channels?
a company that uses both direct channels and indirect channels (e.g. apple: has own store, sells through different stores)
What is the definition of a direct market channel?
manufacturer and end customer interact directly with no intermediaries
What are some disadvantages of direct market channel?
takes time to establish, difficult to establish breadth
What are some advantages of indirect market channels?
rapid distribution can be implemented quickly
What are some disadvantages of indirect market channel?
loss of control over selling environment
What are the four steps of value chains?
efficiently getting the product, in good condition to where, it is convenient for the consumer to buy it, in a setting that is consistent with the brand’s image
What is full vertical integration?
a firm gets involved in new portions of the value chain and controls multiple aspects from supply chain to customer facing portion
What is forward vertical integration?
manufacturers gaining ownership or control over the intermediary at the next level down (e.g. take over the retail space)
What is backward vertical integration?
retailers might own the manufacturing operation (integrate away from customers)
What is intensive distribution?
placing product in many outlets, for the convenience of the customer (convenience products)
What is exclusive distribution?
placing the product in very few outlets (shopping products e.g. a laptop)
What is selective distribution?
somewhere between the other two; most products (specialty products)
What are slotting allowances?
fees that are paid by the manufacturer to the retailer to get space in store
How many employees in the US work in retail?
20%
What is self service?
customers perform many functions during the purchase process
What is limited service?
customers responsible for most shopping activities but salespeople are available for help in some departments (jewelry, fragrance)
What is full service?
specialty stores and department stores; wanting to make the customer’s life as easy as possible (nordstrom)
What are omni channels?
having a brick and mortar and an online store that complement each other
What percent of shopping happens online?
16%
What are atmospherics?
project a functional and psychological picture that appeals to the target market
