Module 7 Flashcards
What do we mean by product?
-Goods
-Services
-Ideas
-People
-Places
-Goods and services (a combo)
What are non-durable goods?
-Often consumed quickly
-Often have low-cognitive invovlement from the consumer
What are durable goods?
-Often consumed slowly over time because they are durable
-Can often be larger purchases with a higher-cognitive involvement during the decision making process
What are services and the four elements?
-Includes activities, benefits, or satisfactions offered for sale
Intangibility: cannot be held, seen, or touched before purchase
Inconsistency: can vary based on provider; harder to standardize
Inseparability: Services cannot be separated from the provider; consumer is involved in the production of the product
Inventory: there is fluctuating demand for services and cannot be stored for times when deman increases (perishability)
What is the service continuum?
Most product offerings are neither pure goods or pure services and usually offer a range from the tangible to the intangible
What are the 3 layers of Total Product Concept?
Core products: the benefit a consumer derives from having the product
Actual product: the physcial good or service -inclues branding, design and features
Augmented product: additional features and attributes that accompany the product (warranty, service contract, delivery options, etc)
What is the product life cycle?
Introduction stage: During this period, sales grow slowly, and profit is minimal. The marketing objective is to create consumer awareness and get customers to try the product for the first time. Distribution and pricing can be challenging because the product is not well known and building relationships with stakeholders takes time
Growth stage: Characterized by increased competition and rapid increase in sales. Profit peaks as a result of economies of scale and increased demand. Product and promotional efforts focus on brand and product differentiation
Maturity stage: Characterized by a slow-down in growth and increased focus on price competition to differentiate products in the market. Promotional efforts focus on price and distribution levels tend to be saturated. Weaker competitors begin to leave the market
Decline stage: Category sales begin to decline and many competitors fall out of the market. Very little promotional support other than price discounts
How can you manage the introduction stage of the product life cycle?
Modifying: Product improvements or product line extensions to ensure products remain competitive, to appeal to evolving needs, and to address new trends in the market
How can you manage the growth stage in the product life cycle?
Modifying: Target opportunities to target these consumers using new marketing approaches. They can also target current users to increase their usage, by encouraging purchases more often or increased volume at time of purchase
How can you manage the maturity stage of the product life cycle?
Repositioning: Once a product has reached the maturity stage it often needs an injection of newness. This can be achieved through new product development initiatives and/or a repositioning of the product to more readily meet changing consumer needs
How can you manage the decline stage of the product life cycle?
Introducing: Adding a new product can provide the focus a mature product needs, bringing it back in the product life cycle to either growth or early maturity stage
What are the 3 types of innovation with new products?
Minor innovations: Product modifications that require no adjustments by the consumer. marketers work to build awareness of the innovation and market along current lines
Continuous innovations: New products that include a minor product improvement but do not require radical changes by consumers. Continuous innovations require extensive product development by the company
Radical innovations: The introduction of product that are entirely new to the markets. Extensive advertising and public relations efforts are often needed for these products
Why do brands matter for organizations?
-Establishes loyalty
-Protects from competition
-Reduces marketing costs
-Allows for legal protection
-Facilitates market segmentation
-Provides opportunity to build brand equity
Why do brands matter for the consumer?
-Once they decide on a brand, and they are happy with it than it’s easy to make the decision the next time (creates brand loyalty)
-Helps consumers identify which products they want associated with their concept of self
What is branding?
A name, term, sign, symbol, or design, or a combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors
-“a brand is perception and perception is reality for customers”
