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chapter 10 Flashcards

1
Q

product

A

a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange for money or something else of value

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2
Q

Good

A

has tangible attributes that a consumer’s five senses can perceive

Ex: Apple Watch (can be touched & it’s features can be seen/heard)

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3
Q

nondurable goods

A

item consumed in one or a few uses

Ex: Food products/fuel

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4
Q

durable goods

A

one that usually lasts over many uses

Ex: appliances, cars, and smartphones

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5
Q

Services

A

intangible activities or benefits that an organization provides to satisfy consumers’ needs in exchange for money or something else of value

Ex: Verizon

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6
Q

Idea

A

a thought that leads to a product or action

Ex: concept for a new invention/getting ppl out to vote

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7
Q

2 categories of products

A
  • consumer products
  • business products
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8
Q

Consumer Products

A

products purchased by the ultimate consumer

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9
Q

4 Types of Consumer Products

A
  1. Convenience Products
  2. Shopping Products
  3. Specialty Products
  4. Unsought Products
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10
Q

Convenience Products

A

items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort

Ex: toothpaste, soap, ATM withdrawal

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11
Q

Shopping Products

A

items for which the consumer compares several alternatives on criteria such as price, quality, or style

Ex: TVs, cameras, plane tickets

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12
Q

Specialty Products

A

items that the consumer makes a special effort to search out and buy

Ex: Rolls Royce car, Rolex watch , heart surgery

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13
Q

Unsought Products

A

items that the consumer does not know about or knows about but does not initially want

Ex: burial insurance, thesaurus

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14
Q

The four types of consumer products differ in terms of

A
  1. the effort the consumer spends on the decision
  2. the attributes used in making the purchase decision
  3. the frequency of purchase
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15
Q

Business Products

A

products organizations buy that assist in providing other products for resale

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16
Q

Major characteristic of business products is that…

A

their sales are often the result of derived demand

Ex: As consumer demand for Toyota cars(a consumer product) increases, the company may increase its demand for paint spraying equipment (a business product)

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17
Q

Business products can be classified as

A

components or support products

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18
Q

Components

A

items that become part of the final product (raw materials)

Ex: lumber, assemblies

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19
Q

Support Products

A

items used to assist in producing other products and services

Ex: installations, accessory equipment, supplies, industrial services

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20
Q

Services can be classified according to whether they are delivered by

A
  1. people or equipment
  2. business firms or nonprofit organizations
  3. government agencies
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21
Q

Product Items

A

a specific product that has a unique brand, size, or price

Ex: Ultra Downy softener comes in different forms (liquid for washer/sheets for dryer) & load sizes (40, 60, etc)

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22
Q

Product Line

A

a group of products or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range

Ex: Nike’s includes shoes & clothing

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23
Q

Stock Keeping Unit (SKU)

A

a unique identification number that defines an item for ordering or inventory purposes

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24
Q

Product Mix

A

consists of all of the product lines offered by an organization

Ex: P&G has beauty & grooming and household care product lines

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25
New is difficult to ...
Define
26
Newness compared with existing products
If a product is functionally different from existing products, it can be defined as new.
27
Feature Bloat
unnecessary features or functions
28
Feature Fatigue
consumers choose overly complex products that leads to dissatisfaction
29
Newness from the Consumer's Perspective
classifies new products according to the degree of learning required by the consumer
30
Three Levels of Innovation
1. Continuous Innovation 2. Dynamically Continuous Innovation 3. Discontinuous Innovation
31
continuous innovation
consumers don't need to learn new behaviors -Same thing w/ a new little twist, don't have to explain how to use it Ex: Same Oreo but w/ different flavor Ex: Colgate adding "whitens teeth" feature, consumers don't need to learn anything
32
dynamically continuous innovation
only minor changes in behavior are required -change in the product form, requires new learning on the part of the customer Ex: Transitioning to Apple Touch ID to Face ID Ex: P&G's Swiffer WetJet
33
discontinuous innovation
makes the consumer learn entirely new consumption patterns to use the product -Radically different, the first time something has happened like this, completely brand new Ex: Telephone, Internet, Cameras Ex: Amazon Alexa you need to learn how to use it
34
Newness in legal terms
The U.S. Federal Trade Commission (FTC) advises that the term new be limited to use with a product up to six months after it enters regular distribution
35
Newness from organization's perspective (3 levels)
1. Product Line Extension (first level/least risk) 2. Brand Extension (second level) 3. Radical Invention (third level/highest risk)
36
Product Line Extension (1st level/Least Risk)
Incremental improvement of an existing product line the company already sells Ex: Purina added its new line of Elegant Medleys to its existing line of 50 varieties of fancy feast gourmet cat food
37
Brand Extension (2nd level)
Putting an established brand name on a new product in an unfamiliar market Ex: (1) Offering new smartphones/cameras & (2) Colgate Frozen Dinners
38
Radical Invention (3rd/most risk)
a truly revolutionary new product that creates value for the customer Ex. 3-D Printer
39
Protocol
a statement that, before product development begins, identifies (1) a well-defined target market; (2) specific customers' needs, wants, & preferences , (3) what the product will be and do to satisfy consumers
40
Marketing Reasons for New-Product Failures
1. Insignificant Point of Difference 2. Incomplete Market & Product Protocol Before Product Development Starts 3. Failure to Satisfy Customer Needs on Critical Factors 4. Bad Timing 5. No Economical Access to Buyers 6. Poor Execution of the Marketing Mix: brand name, package, price, promotion, distribution 7. Too Little Market Attractiveness 8. Poor Product Quality
41
Organizational problems/attitudes can also cause...
new-product disasters
42
Two New-Product Disasters
1. Encountering "groupthink" in task force & committee meetings 2. Avoiding the "Not Invented Here (NIH)" Problem
43
Closed Innovation
based on the conviction that new products & consumer solutions can successfully emerge only from inside the org
44
Open Innovation
consists of practices/processes that encourage the use of external as well as internal ideas & internal as well as external collaboration when conceiving, producing, & marketing new products/serv
45
New Product Development (NPD)
the process of innovation
46
New Product Development Process
the seven stages an organization goes through to identify opportunities and convert them into salable products or services
47
New Product Development Process 7 Stages
Stage 1: New-product Strategy Development Stage 2: Idea Generation Stage 3: Screening & Evaluation Stage 4: Business Analysis Stage 5: Development Stage 6: Market Testing Stage 7: Commercialization
48
Stage 1: New-Product Strategy Development
defines the role for a new product in terms of the firm's overall objectives -What it is you're solving, what you want to achieve, who's your target market -During this stage, the firm uses both a SWOT analysis & environmental scanning to assess its strengths and weaknesses relative to the trends it identifies as opportunities/threats
49
Stage 2: Idea Generation
Idea generation: involves developing a pool of concepts to serve as candidates for new products, building upon the previous stage's results. -Uses "what if" questions that focus on solutions & marketing actions -Uses methods of generating new-product ideas both internally & externally
50
Idea Generation Methods
› Suggestions from Employees & Friends: › Customer & Supplier Suggestions Crowdsourcing: › Research & Development Laboratories › Competitive Products › Smaller Firms, Universities, & Inventors > Crowdfunding
51
Suggestions from Employees & Friends
businesses get successful new-product ideas from employees who ask the "what if" question Ex: Hot Cheetos
52
Customer & Supplier Suggestions
firms ask their salespeople to talk to customers & ask their purchasing personnel to talk to suppliers to discover new-product ideas Ex: Whirlpool gets ideas from customers
53
Crowdsourcing
involves generating insights leading to actions based on ideas from massive numbers of people Ex: LEGO
54
Research & Development Laboratories
firm's own R&D laboratories
55
Competitive Products
analyzing the competition can lead to new product ideas
56
Smaller Firms, Universities, & Inventors
look for product ideas from them
57
Crowdfunding
way to gather an online community of supporters to financially rally around a specific project that is unlikely to get resources from traditional sources such as banks or venture capital firms
58
Stage 3: Screening & Evaluation
Screening & Evaluation: stage that internally & externally evaluates new-product ideas to eliminate those that warrant no further effort -Screens employees/asks them questions -uses concept testing
59
2 Approaches of Screening & Evaluation
- internal approach - external approach
60
Internal Approach (Screening&Evaluation)
a firm's employees evaluate the technical feasibility of a proposed new-product idea to determine whether it meets the objectives defined in the new-product strategy development stage
61
Customer Experience Management (CEM)
the process of managing the entire customer experience within the company
62
External Approach (Screening&Evaluation)
use concept tests, external evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual finished product
63
Stage 4: Business Analysis
Business Analysis: specifies the features of the product/serv & the marketing strategy needed to bring it to market & make financial projections -Assesses the total "business fit" -Financial projections, feasibility, manufacturing side, how much it's going to cost
64
Stage 5: Prototype Development
turns the idea on paper into a prototype -What is it going to look like, creating something that will be as close as possible to product
65
Prototype
a full-scale operating model of the product/serv Ex: Nikon Camera made a prototype out of cardboard
66
Stage 6: Market Testing
involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy -Uses test markets - Market is going to tell you if they like it/not & what you need to improve on Ex: Dr.Pepper tested what flavor was best
67
Test Marketing
offering a product for sale on a limited basis in a defined area for a specific time period
68
Three Kinds of Test Markets
1. Standard 2. Controlled 3. Simulated
69
Standard Test Market
a company develops a product and then attempts to sell it through normal distribution channels in a number of test-market cities - Producer sells product to distributors, wholesalers, & retailers - Comps will take one of three actions
70
Comps will take one of three actions (Standard Test Market)
1. If results don't meet expectations then product is discontinued 2. If results are favorable then full-fledged national product intro may be undertaken 3. Regional rollout: product is introduced sequentially into geographical areas to allow production levels & marketing activities to build up gradually to support the product
71
Controlled Test Market
contracting the entire test program to an outside service -- The service pays retailers for shelf space & can therefore guarantee a specific percentage of the test product's potential distribution volume
72
Simulated Test Markets
somewhat replicates a full-scale test market, often run in shopping malls to find consumers who use the product class being tested. Qualified participants are shown the product & asked about usage, reasons for purchase, & important product attributes. Then see the comps & competitor's ads for the test product. Finally, participants are given money & allowed to choose b/w buying comp/competitor's product in a real store environment
73
Stage 7: Commercialization
positions and launches a new product in full-scale production and sales
74
adoption process steps
1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption
75
Awareness
Consumer needs to be aware of product Ex: TEMU had a Super Bowl ad & now consumers know about
76
Interest
There needs to be something that triggers consumer to have interest in the product Ex: Not attracted/interested in TEMU
77
Evaluation
Going to check it out, peaked interest, interact in some way w/ product Ex: Friend tells you about TEMU & shows you the app
78
Trial
Buy it & see how it goes Ex: Purchased something from TEMU, but still reluctant
79
Adoption
If exceeds expectations, adopt it & continue to buy Ex: Keep ordering from TEMU
80
Factors Influencing Diffusion Rate
- relative advantage - communicability - complexity - compatibility - risk
81
Relative Advantage
when something is new, you look at it compared to what you have already. If it's that much better & if it gives you that much more benefit Ex: Color TV is better than black/white
82
Communicability (WHY)
Needs to communicate why product is good for you/fulfills your need
83
Complexity (USE)
Needs to be easy to use/understand how to use it
84
Compatibility
Needs to be compatible w/ other products you have, needs to fit together Ex: Cassette needs a cassette player
85
Risk
Is the risk too high Ex: ppl were fearing that phones gave them cancer Solution: Bring opinion leaders in to show that everything's going to be okay
86
The Cross-Functional Team (Organizing for effective NPD)
- Marketing - Sales - R&D - Production - Finance

Marketing (22 decks)

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