Final Flashcards
(70 cards)
What are the 4 differences between a product and a service?
- Intangibility (A service cannot be touched, held or seen)
- Inseparability (Service’s production is tied to its consumption)
- Variability (Quality depends on who provides the service)
- Perishability (A service cannot be stored)
What are the three types of service marketing?
- Internal marketing (organization and employees)
- External marketing (organization and consumers)
- Interactive marketing (employees and consumers)
What are the 3 dimensions of the product?
- Benefits
- Core product
- Related services
What are the 4 aspects of the core product?
- Design
- Function (cellphone = fast, camera, screen)
- Form (size, shape, color…) - Packaging
- Technical functions = protect the product, the way to open it
- Communication functions = flashy, to inform - Quality
- Technical (performance, reliability, conformity, durability)
- Perceived (by consumers) - Brand
- All material signs that allow a product or an organization to differentiate itself
What are the 5 related services?
- Guarantee
- Installation
- Delivery
- Credit
- After-sales service
What is a product portfolio, range, line?
Product portfolio = all products offered by a company.
Product range = a set of products of the same category or that meet the same type of need.
Product line = a group of products intended for a specific market or that solve a specific problem for the consumer.
What does cannibalization means?
The drop in sales of a current product caused by sales of a new product launched by the same company.
How to organize a product portfolio?
- By target segments
- By territories
- By types of use
- By distribution channels
What is the portfolio analysis tool?
BCG Matrix
- Market growth
- Relative market share
- Never use on its own, combine
What is a brand?
A name, a term, a design, a symbol or any other feature that identifies a seller’s goods or services and distinguishes them from those of other sellers.
What is a private label?
A brand developed by and marketed for a retailer and distributed in that retailer’s store exclusively.
Ex. Compliments
What is brand equity?
The added value that a brand gives a product
- Customer-based approach (spontanesly or not)
- Price differential approach (ex. Apple more expensive, show prestige)
- Income-based approach (proportion of the company future income)
What are the two strategic brand decisions?
- Umbrella brand (appers on all products, easy to see, but hard to differentiate)
- House of brands (each brand in the portfolio is treated independently)
Brand extensions and launches…
- Existing brand, existing product = line extension
- Existing brand, new product = brand extension
- New brand, exist. prod. = multibrand approach
Ex. Starbucks Seatle brand for less expensive - New brand, new prod. = New brand creation
What is brand alliance or cobranding?
Two brands partner to market a new product, line or range.
Ex. Oreo Cadburry
What are the 4 steps of the product lifecycle?
- Introduction (low sales, high costs, no profit)
Draw attention and awareness, build a network - Growth (increasing sales, reducing costs, some profits)
Defend territory, expand range and lines, increase market share, expand network - Maturity (constant sales, reducing costs, increasing profits)
Optimize portfolio, maintain or increase market share, stimulate network - Decline (reducing sales, constant costs, reducing profits)
Contract range and lines, liquidate inventory, reduce budget, reduce network
What does price means?
The amount spent plus the time and psychological cost incurred to obtain a product or service.
What is the value?
Benefit = perception
Vs.
Costs = psychological, time, money
The price needs to…
Be linked to the marketing strategy
- Target (clients price sensitivity, what they value…)
- Positioning
What are the environmental influences on pricing?
Internal environment : - Company's costs (R&D, communication, fixed, variable, total) - Existing product line - Product life cycle External environment : - Competition - Consumers - Distribution - Economic (price perception, level of confidence in the economy) - Government - Legal (state and law - regulators and agencies ex ALENA, industry subsidy programs, legal environment ex interest rate) - ...
Pricing psychology…
- More people complete a purchase if the items are at a different price
- Price anchoring (put the product you want to sell near a more expensive one)
- Test different level of pricing
What are the pricing objectives?
*Must be consistent with and subordinate to the company’s global objectives and marketing strategies.
Pricing objectives -> Pricing strategies -> Pricing methods -> Applying and controlling pricing policies
What are the different types of pricing objectives?
- Profit-oriented (profit maximization, acceptable profit, reasonable profit, target return)
- Competition-oriented (market position - increase market share, maintain, erecting or maintaining entry barriers)
- Sales- oriented (sales volume for short-term results)
- Customer perception-oriented (product positioning)
- Distribution-related (ex. Walmart)
What are the different pricing strategies?
- Determined by competitive pressure
- Price leadership (you choose the price and the others follow)
- Competitive parity (same price than market average)
- Low-cost pricing (lowest price on the market) - Didctated by consumer preferences
- Quality signaling (prestige) pricing - Based on costs
- Cost-plus pricing - For a product line
- Complementary product (ex. Printer)
- Price bundling (product with a group of item)
- Customer value pricing (less expensive but with fewer options) - During introduction
- Skimming (high initial price)
- Penetration (low initial price) - Price discrimination
- Discounts (extra revenue)
- Early birds (improved cash flow)
- Last minute deals (use up spare capacity)