Chapter 10 book part 2 Flashcards
(26 cards)
Product map
Visualisation of competitive items of competitors. Also identify market segments and shows company positioning in these segments
Product line stretching
Is when a product line is lengthened beyond its current range, can be down market (lower price range) or up market or both.
Product line filling
Is when a firm adds more items within the product line’s present range
Product mix pricing
Is when a firm searches for a set of prices that maximises profits not for individual products but for the mix as a whole. Pricing is difficult because products can be interrelated and have effects on each other.
Co-branding (dual-branding, brand bundling)
Is when two or more well-known brands are combined into a joint product or marketed together in some fashion
This can be ‘same-company’, ‘joint-venture’, etc
Co branding advantages
- More convincing position
- Reduce costs of product introduction
Co branding disadvantages
- Risks and lack of control
- Consumer expectations are high
- Performance can have negative effects on both brands
- Less brand focus
Packaging
Packaging includes all the activities of designing and producing the container for a product.
Also regarded as a fifth P (Price, Product, Place, Promotion)
Packaging objectives (4)
Identify a brand
Convey descriptive and persuasive information
Product protection and storage
Aid product consumption
Labeling functions
Identifies product/brand
Might grade a product
Describe a product
Promote a product
Warranties
Warranties are formal statements of expected product performance by the manufacturer and are legally enforceable
Product guarentees
Reduce a buyers perceived risk by guaranteeing quality
Acquisition
Buying of other firms, patents, licenses, franchises, etc.
Incremental innovation
The entering of new markets by tweaking products for new customers.
Product development process
Idea generation Idea screening (screen out poor ideas) Concept development (word description, drawing or prototype) Concept testing Marketing strategy development Business analysis (concept success/attractiveness evaluation) Product development Market testing Commercialisation
New product development preliminary 3-part marketing strategy
Identify new target market
Determine short term (1year) pricing, distribution and marketing
Determine long-run sales, profit goals, etc
Types of commercialisation entries
First
Parallel
Late
Late entry advantages
Less market education of new product
Can avoid competitor revealed problems
First entry advantages
First to market
Lock up of key distributors and customers
Market leadership advantage
Consumer-Product adoption
An individuals decision to become a regular user of a product
Innovation
Innovation is any good, service or idea that someone perceives as new, no matter how long its history
The consumer adoption process
Awareness Interest (stimulated to seek info) Evaluation (considers product) Trial Adoption (decision)
5 main characteristics that influence an innovation’s rate of adoption
Superiority over other products Compatibility (individual req. match) Complexity (difficultness to understand) Divisibility Communicability (degree that benefits are observable)
Others are cost, risk, social approval, scientific credibility
Product life cycle (PLC)
Often a bell-shaped curve, divided into 4 stages;
Introduction (no profits, slow sales, product trials)
Growth (rapid market acceptance, profit improvement)
Maturity (product saturation)
Decline (profits erode, sales decline)
