Chapter 4--Product and Promotion Strategy Flashcards
(36 cards)
What is a product?
A good, service, or idea
What are consumer products?
Products geared to meet consumer’s needs for their own, or their families’, personal use.
What are the three categories of consumer products?
1) Convenience–relatively inexpensive, purchased on a regular routine basis without much thought. Readily available at multiple outlets
2) Shopping–more expensive than convenience, for which customers will expend some effort to determine which product to purchase. May have several outlets that supply it, but not all outlets carry the same brands
3) Specialty–most expensive, purchased based upon strong opinions, for which substitutes are not willingly accepted. Often, only one outlet in a market carries each brand.
Why is understanding the type of product important for marketers?
The way the target market perceives the product helps determine the marketing strategy that will best work
What are business products?
Products geared to help businesses produce other products, or resell.
What are the seven categories of business products?
1) Installations–major equipment or processes
2) Accessory equipment–less expensive, less complex equipment than installations
3) Raw materials
4) Component parts–products purchased in finished form from other suppliers
5) Process materials–products that are used in production to become the finished product
6) MRO (maintenance, repair, and operating) products–products used in production that do not become part of the finished product
7) Business services–processes required to run the company–often outsourced to other businesses
What is the product mix of a company? How can we classify product mix?
The overall group of products a firm offers.
Narrow versus broad, which is the number of product categories contained in the mix.
What is a product class?
The highest-order designation of a firm’s products (e.g.: major home appliances)
What is a product category?
The next step below product class (e.g.: kitchen products)
What is a product line? How are they classified?
The next step below product category (i.e.: refrigerator).
We classify product lines by depth–how many closely-related product items are in each line.
What is a product item? What characteristics define them?
The lowest-level of classification, under product category (i.e.: a particular model of refrigerator).
Defined by a combination of style, brand, and size.
What is cannibalization in product mix?
The reduction of sales in one brand due to the introduction of a new brand. Can be planned or unintentional.
Why do companies introduce new products?
1) Increase sales
2) Increase market share
3) Increase presence in the marketplace
What is a continuous innovation product? What is a discontinuous innovation product? What marketing activity does a discontinuous innovate specially require?
Continuous innovation: a variation on an existing product
Discontinuous innovation: a completely new product, so there must be consumer education of how to use it, as part of the marketing strategy
What are the steps of the New Product Development Process?
1) idea Generation
2) Screening
3) Concept testing
4) Business analysis
5) Product development
6) Test marketing
7) Commercialization
What is branding of a product from a definition point of view?
A product’s multidimensional concept that is “a name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from those of other sellers.
The legal term for a brand is a trademark.
A brand may identify one item, a family of items, or all items of that seller.
If used for the firm as a whole, the preferred term is trade name”
What is branding of a product from a strategic point of view?
A promise to the target market–the brand represents to totality of that which an organization delivers to its customers.
Closely tied to positioning strategy and promotion.
What are the brand elements?
Brand name (spoken part of the brand) Brand mark (symbol or design associated with the brand)
What are the available branding alternatives?
1) Manufacturer’s brand (national brand)
2) Private label brand (store brand)
3) Generic product (no brand name)–unusual to find today
4) Family brands (a brand for a family of related products)
5) Individual brands (multiple brands for similar products, each designed to appeal to on segment of the market)
What is brand equity?
Consumer’s perspective: The value of a brand. It is based on the consumer attitudes about positive brand attributes and favorable consequences of brand use.
Firm’s perspective: The financial value of a brand.
What determines brand equity?
1) Brand name awareness
2) Brand loyalty
3) Perceived quality
4) Brand associations
How is packaging used in marketing? Why is it important?
The package is often the only part of the product visible to the customer at the time of purchase, so it most promote the product.
This includes label design, which describe the product and promote it.
For service products, what four special product strategy considerations are there?
1) Intangibility–how does a marketer make the intangible service tangible to the customer’s perception?
2) Inseparability–the service provider is not separate from the service, so processes must be in place to assure that a service provider performs the service at the time and in the manner expected.
3) Perishability–an available period for supplying a service cannot return, whether the service is provided or not. Thus, marketers may reduce the price for non-busy times, to increase the chance those slots will be filled
4) Heterogeneity–services are difficulty to standardize between providers. Service marketers must standardize training, uniforms, and systems monitoring, so the service experience is as standard as possible.
What are the stages of the product lifecycle (PLC)?
1) Introduction–often negative profit while the product development costs are being covered, and the product is being promoted and distributed
2) Growth–customer demand increases, competitors enter the market. Marketing expenses go up, but so do sales and profits
3) Early maturity: industry sales remain high, but the growth rate slows. Companies jockey for position by presenting adjustments to the marketing mix
4) Mid maturity: industry sales peak and begin to decline as competitors drop out of the market. Customer demand is fully saturated. This phase can go on for years, and strong companies can remain profitable.
5) Decline: industry sales fall to where even strong companies no longer support the product. Companies either make a planned exit or are forced out of the market.
