Flashcards in Chapter 8: Product Strategy and Branding Deck (57):
On what does the success of a product hinge on?
The competitive angle.
What does a product's competitive angle, do?
It defines the severity of the problem it addresses and the goodness of the solution it provides compared to the competition.
What is a COMPETITIVE ANGLE?
An element of differentness that solves a problem and sparks a personal connection.
What are the 5 questions for sharpening the competitive angle?
1. Need to Believe: Which significant pain point does the product address that is personally relevant to your target audience?
2. Reason to Believe: How effective is the demonstration of the product's problem-solving benefits in capturing the imagination of your target audience?
3. Dominate Situations: Which usage situations or buying situations does the product dominate in a way that delivers superior value?
4. Quantifiable Support: What are the relevant facts and figures that you use to support or enhance product claims?
5. Unique Product Claim: How is the product distinctly different, better at solving problems, and more memorable than its closest competitor?
What action is necessary when claiming a product/service is "unique?"
Uniqueness by COMPARISON. People have a hard time appreciating the uniqueness of a product unless marketers help them make comparisons. If you believe you have a unique product, then dare to compare and prove it.
What is the advantage of having an "easy-to-explain" product?
Products that are easy to explain have benefits that are designed to DEMONSTRATE THEMSELVES.
Explain the low-involvement vs high-involvement method of classifying products.
Low-involvement products are usually inexpensive, frequently purchased items for which the purchasing decision is routine and requires very little careful thought. (Low-Risk)
High-involvement products are usually expensive, infrequently purchased items for which the purchasing decision is complicated and requires a great deal of careful thought (High-Risk).
Explain the durable goods vs non-durable (consumable goods) method of classifying products.
Durable - Built to last
Non-Durable (Consumable Goods): Consumed as we use them. (Tissues, food, etc)
Explain the business products vs consumer products method of classifying products.
Business products: Purchased for specific uses in the business.
Consumer Products: Purchased for personal use or consumption.
What are the three types of business products?
1. Materials and Parts: Raw materials and component parts used in the manufacturing process to become the final product. (yogurt ingredients)
2. Capital Items: Products that aid in the production or operations process. (vat to mix yogurt ingredients)
3. Supplies and Services: Operating supplies, maintenance items, and services. (cleaning supplies, accounting services)
What are the four types of consumer products?
1. Convenience Products: Purchased without much thought. Inexpensive, frequent. (Canned-vegetables, cereal)
2. Shopping Products: Require careful consideration because they are expensive or will last a long time. (TV, cell phone)
3. Specialty Products: Purchased after extensive search because they are expensive, exclusive, and often unique. (Designer clothing, luxury autos, fine dining)
4. Unsought Products: Life insurance, blood donations, preplanned funeral services
What is a PRODUCT ITEM?
A specific version of a product. (Honda Civic)
What is a PRODUCT LINE?
Includes closely related product items, competing in the same general product category. (Accord, Civic, CR-V)
What is a PRODUCT MIX?
Includes all products offered by the company. (Honda cars, motorcycles, lawn mowers, snow blowers, etc)
Why would a company market different product lines?
They may do it to take advantage of distinctive competencies, established network of distributors, and brand equity with customers. (Honda known for reliable engines, takes advantage of how its engines are perceived and create different types of products that use engines)
What are the three levels of a product?
1. The Core Product
2. The Actual Product
3. The Augmented Product
What is the CORE PRODUCT?
The intangible part of the product. (The personal benefit that makes it valuable to the buyer)
What is the ACTUAL PRODUCT?
The tangible part of the product. (All tangible factors that set it apart from competitors)
What is the AUGMENTED PRODUCT?
The service that complements the actual product and core product. (Warranties, service contracts, product assistance)
What is the typical LIFE CYCLE for a product?
Production introduction > Growth > Product Maturity > Decline
What elements of the marketing mix are used during the INTRODUCTION STAGE?
What elements of the marketing mix are used during the GROWTH STAGE?
Maximize market share
What elements of the marketing mix are used during the MATURITY STAGE?
What decisions need to be made during a product's DECLINE STAGE?
In this stage, marketing managers must make a decision regarding whether to rejuvenate a product or let it die.
What are the 5 categories of product adopters?
2. Early Adopters
3. Early Majority
4. Late Majority
What are INNOVATORS like? (product adopter category)
Estimated at 2.5% of the population:
First to try new ideas
Usually have more money
Usually have more education
Higher-than average tolerance for risk
What are EARLY ADOPTERS like? (product adopter category)
Estimated at 13.5% of the population:
First to follow innovators' lead
Waiting for green light from innovators
What is EARLY MAJORITY like? (product adopter category)
Estimated at 34% of the population:
Consider buying products that prove to be successful in practice. (Product must complement their way of life rather than redefine)
First-hand sampling is important to them
Observing others' use
What is LATE MAJORITY like? (product adopter category)
Estimated at 34% of the population:
More risk averse than average consumer
Skeptical of innovations
Buy new when products are reasonable alternative due to low price and/or easy availability
What are LAGGARDS like? (product adopter category)
Estimated at 16% of the population:
Very skeptical of innovations
Buy new when old alternatives are no longer available
What is the DIFFUSION PROCESS? Who controls it?
It is the expanding of the market share (number of buyers). It is controlled by imitators, not innovators. (Transferring enthusiasm from one product adopter category to another)
What are the 8 steps of the product development process?
1. Idea Generation
2. Idea Screening
3. Concept Testing
4. Marketing Strategy
5. Business Analysis
6. Product Development
7. Market Testing
Explain IDEA GENERATION (product development process).
Considering the problems customers are trying to solve. These can come from R&D (research and development), employees, competitors,etc.
Explain IDEA SCREENING (product development process).
A formalized process for qualifying ideas. Ideas should be screened to ensure that they fit with the organization's objectives and resources. Objective is to minimize decision error. (Don't miss good idea, Type I, don't accept bad idea, Type II)
Explain CONCEPT TESTING (product development process).
The most critical stage. Measuring "first-time" reactions of testers. THIS IS WHERE THE PROCESS MOST OFTEN BREAKS DOWN.
Explain MARKETING STRATEGY (product development process).
Design an initial marketing strategy taking into account (1) target market and (2) marketing mix.
Explain BUSINESS ANALYSIS (product development process).
Attempt to make the business case for the concept. (Profit projections, cost estimates, company objectives)
Explain PRODUCT DEVELOPMENT (product development process).
Significant resources are invested. Engineering, R&D, and the other areas of the company come together to create (tangibly) a product ready for the market test.
Explain MARKET TESTING (product development process).
Product is tested in realistic markets to determine potential. Test markets should be microcosms of the population of interest so that results can be projected to the larger market. Should be long enough to observe repeat-purchase rates but short to avoid competitors rushing to the market.
Explain COMMERCIALIZATION (product development process).
Decision to launch product. Results from the test markets provide marketing managers the info for this decision. These are the general outcomes:
What is a BRAND?
Name, term, design, symbol, or any other feature that identifies one seller's goods or services as distinct from those of other sellers.
What is sticky branding?
A great brand name can be a significant awareness builder when launching successful products. True winners stick with us and generate word of mouth without have to be pounded in with millions of dollars of advertising.
What defines a good catchphrase?
A great catchphrase keeps your brand focused and in turn focuses buyers on key benefits.
Why should brands make an emotional connection?
The connection brand champions have with their favorite brand often transcends logic because people buy with their heart.
What is BRAND EQUITY?
It is the additional market share and/or profits a product earns over comparable products because of the strength of its brand.
What is a NET PROMOTER SCORE?
The difference between the percentage of promoters(9-10 rating) and the percentage of detractors (0-6 rating).
What are the three steps to develop BRAND EQUITY?
1. Brand Awareness
2. Brand Image
3. Brand Loyalty
Result = Brand Equity
What are the three types of brands?
1. Functional Brands
2. Image Brands
3. Experiential Brands
Define FUNCTIONAL BRANDS.
Functional brands focus on features and functional benefits that make products helpful and useful. They connect with consumers by helping them achieve basic goals related to physical needs (food, shelter, health, safety).
What is (1) The Basis for Differentiation, (2) Marketing Mix Emphasis, and (3) Consumer Needs and Involvement for FUNCTIONAL BRANDS?
Basis for Differentiation: Superior performance or superior economy.
Marketing Mix Emphasis: Product, price, and/or place.
Consumer Needs and Involvement: Physiological and safety needs, relatively low involvement.
What is (1) The Basis for Differentiation, (2) Marketing Mix Emphasis, and (3) Consumer Needs and Involvement for IMAGE BRANDS?
Basis for Differentiation: Desirable Image
Marketing Mix Emphasis: Promotion
Consumer Needs and Involvement: Social and esteem needs, moderate to high involvement.
What is (1) The Basis for Differentiation, (2) Marketing Mix Emphasis, and (3) Consumer Needs and Involvement for EXPERIENTIAL BRANDS?
Basis for Differentiation: A unique, engaging experience.
Marketing Mix Emphasis: Product and price (delivery and service).
Consumer Needs and Involvement: Self-actualization needs, moderate to high involvement.
Define IMAGE BRANDS.
Image brands focus on the distinct and admired image they create for their customers.
Define EXPERIENTIAL BRANDS.
Experiential brands focus on how the product or service makes the customer feel. (Consumption experience)
Where is the CHASM in the product adopters cycle?
Between the Early Adopters and Early Majority
What are the 3 components of brand positioning?
1. Competitive frames of reference
2. Points of difference
3. Points of parity