Marketing Communication Lectures blok 2.2

Question 1

What is a product?

Answer 1

A combination of tangible and intangible characteristics that enable an object or a service to satisfy a customer need.’
A product can also be a bundle of benefits -> Media markt, Amazon, Apple etc.

Question 2

What are the Product levels?

Answer 2

1. Core product
2. Actual product
3. Augmented product

Question 3

What is a Core product?

Answer 3

What need does the product fulfil?

Example car:
Core product = transportation

Question 4

What is an actual product?

Answer 4

What is it?

Example car:
Actual product = the car

Question 5

What is an Augmented product?

Answer 5

core product + augmented product + everything you get and CAN separate

Example car:
Augmented product = free winter tiers

Question 6

what are the two classifications of products?

Answer 6

1. Consumer goods
2. Business products

there is a difference in decision making process

Question 7

what are consumer goods?

Answer 7

Consumer goods are products bought for consumption by the average consumer. Alternatively called final goods, consumer goods are the end result of production and manufacturing and are what a consumer will see on the store shelf. Sold to individuals and families (ultimate consumers/end users)

Question 8

what are business products?

Answer 8

Sold to organisation (who use or resell it).

Question 9

What are the 4 types of consumer goods?

Answer 9

1. Convenience products
2. Shopping products
3. Specialty products
4. Unsought products

Question 10

what are convenience products?

Answer 10

products or service we buy without thinking, with minimum effort, we want it to be available everywhere (staples, impulse goods, emergency goods)

-> fast food, magazines, sugar, umbrella. toothpaste,

buying behaviour: frequent purchase, little effort

price: low price
distribution: widespread
promotion: mass promotion

Question 11

what are shopping products?

Answer 11

Products we go and shop for (several stores), we compare them (example: clothes), we want information so someone present at the point of sale can be useful.

-> furniture, clothing, used cars, airline services, television etc

Homogeneous products: Products that vie with each other in a market but which (from the consumer’s viewpoint) have little or no differentiation in terms of features, benefits, or quality and are, therefore, forced to compete on price or availability.

Heterogeneous products: products with attributes that are significantly different from each other, which makes it difficult to substitute one product for another. An example of a heterogeneous product is a computer. You really can’t substitute a PC for a Mac, because each computer platform is too different.

buying behaviour: less frequent purchase, much effort

price: higher price
distribution: selective
promotion: advertising and personal selling.

Question 12

what are speciality products?

Answer 12

3. Specialty products: products with a big preference, we put a lot of effort in these products, but we usually compare them less then shopping products, should create consumer loyalty. (are consumer products and services with unique characteristics or brand identification for which a significant group of consumers is willing to make a special purchase effort.)
   High involvement, high brand loyalty

-> Starbucks (convenience good turned in to specialty product), specific cars (Lamborghini), festivals, luxury goods, designer clothing

buying behaviour: strong brand preference, loyalty

price: high price
distribution: exclusive distribution
promotion: carefully targeted promotion

Question 13

what are unsought products?

Answer 13

4. Unsought products: these are products which we do not know we want/need/consider them.
   As a consequence of their nature, unsought products require much more advertising, selling and marketing efforts than other types of consumer products but more specific?

-> iPad, wedding dress, funeral services, new products, life insurance (before advertising)

buying behaviour: little product awareness, knowledge or little interest

price: varies
distribution: varies
promotion: aggressive advertising and personal selling

Question 14

what is the the impact for a communication strategy?

Answer 14

• Information needs differ hugely between different categories
• Objectives range from TOM awareness to POS to loyalty to “findability”

Question 15

product life cycle

Answer 15

1. Introduction
2. Rapid growth
3. Turbulence
4. Maturity
5. Decline

• Evaluate position of product in product life cycle
• Special opportunities and challenges for each phase

Question 16

Market stretching

Answer 16

Happens in the Maturity stage of the product life cycle.

1. Stimulate more frequent use
   - > Brush your teeth 3 times a day, kitkat as a morning snack, cup-a-soup 4 hour snack
2. Tap new markets
   - > Coca Cola Zero for men
3. Suggest alternate use for the product
   - > chicken with Coca Cola

Question 17

Product Mix

Answer 17

• Product quality technical or consumer
• Product warranty
• Product guarantee
• Satisfiers vs dissatisfiers

Question 18

What is a Brand.

Answer 18

Brand = ‘Name, term, symbol, design or any feature that a firm uses to identify its products/services and differentiate them from those of competitors.’
-> Apple first white earphones (=showing the product without showing the brand)

Question 19

Packaging and Design

Answer 19

1. Technical: protection
2. Product information
3. Symbolic image
4. Product differentiation
5. Stimulate consumption

Question 20

Services

Answer 20

1. Intangible -> Can’t catch a service
2. Inseparability -> Delivery part of the service
3. Perishability -> Once you have it it’s gone
4. Heterogenity -> Differs -> involves humans (humans are always different)

Question 21

New product development

Answer 21

1. Idea generation
2. Idea screening
3. Business Analysis
4. Product Development
5. Test Marketing
6. Commercialization

-> Consumers needs to see the difference

Question 22

Why new products succeed or fail

Answer 22

Success factors:
•	Customer Orientation
•	Core business activity
•	Superior product
•	Stimulating corporate culture
•	Well-planned product development process

Failed introductions:
•	No clear product benefits
•	Poor marketing strategy
•	Quality problems
•	Unanticipated competitive reactions
•	Bad Timing

Question 23

Process van een product

Answer 23

1. Awareness
2. Interest
3. Evaluation
4. Trial
5. Adoption (or rejection)

Question 24

Product features and rate of adoption

Answer 24

•	Relative advantage
•	Compatibility
•	Complexity
•	Possibility of trial use
•	Observability
 

Question 25

Price

Answer 25

A company wants profit Revenue = product price *number of products sold Profit = total revenue – total costs

Question 26

Pricing decision

Answer 26

Highest price you can ask is based on what is the product worth in the eye of the customer. (perceived value) Lowest price you can ask is based on what did it cost you to make the product (cost price)

Question 27

Pricing decision depends on...

Answer 27

``` 1. Company & Marketing Strategy What are your targets? What image do you have or want? What target group do you have? Example: look at the difference between Primark and Dolce & Gabbana ``` 2. Competition Price wars Substitutes If a competitor decides to decrease his price, should you? If a competitor decides to increase his price, should you? Example: water has no competition 3. Product Mix Assortment Complementary products Example: Gillette keeps making money because of the blades Printers keep making money because of the ink 4. Legislation & ethics Laws regarding price fixing, cartels or other conspiracies Predatory pricing -> Has to look honest in the eyes of the consumer -> Big companies buy the small ones 5. Resellers Distribution chain Profit margins -> With how many do you share the profit?

Question 28

Distribution channels

Answer 28

(= a network) -> Direct Channel 1. Selling directly to consumer producer/manufacturer -> consumer -> Indirect Channel 2. Selling through retailers producer/manufacturer -> retailer -> consumer 3. Selling through wholesalers producer/manufacturer -> wholesaler -> retailer -> consumer 4. Selling with a jobber producer/manufacturer -> wholesaler -> Jobber -> retailer -> consumer Example: Zara = direct channel, clothes are only sold in Zara stores, there is no one in between Nike = indirect channel, shoes are sold in Nike stores, Footlocker, Snipes online and in stores The big boss is the one who has access to the brand

Question 29

The pricing of a new product

Answer 29

1. Price skimming strategy • Unique product • Introduction: high price which eventually decreases (high -> low) • Maximise revenue • PLC • You want to reach the innovators, they are willing to pay more Example: newest technology like Ipad/Iphone etc. 2. Penetration price strategy • Introduction: low price which eventually increases (Low -> High) • Maximize market share • Competition is fierce • You try to get people hooked, then increase the price Example: Yakult, Optimel -> try to get into people’s daily routines

Question 30

Calculating the price

Answer 30

``` 1. Based on Costs Not marketing (no profit) 2. Based on Demand (consumers) Beste -> researchers have looked into it etc 3. Based on Competition Ignoring what you could ask ```

Question 31

Based on costs

Answer 31

Distribution channels = “A distribution channel is a network of independent organisations that, combined, perform all of the activities necessary to link producers and end customers.”

Question 32

Distribution intensity

Answer 32

`` How to decide on the type and number of intermediaries to use at each channel level? ‘’ 1. Intensive distribution 2. Selective distribution 3. Exclusive distribution

Question 33

Intensive distribution

Answer 33

• As many outlets as possible • All suitable wholesalers & retailers • Convenience and impulse buying (see lecture 1) Example: Gum, we want it to be everywhere Manufacturer -> wholesaler -> retailer -> consumer

Question 34

Selective distribution

Answer 34

* A number of retailers, but not all * Arrangements with retailers * Shopping good Example: Coffee machine, we do not want to go too far, but we will go further for a coffee machine, then for a pack of gum. Nespresso has a strategy in which they want to be exclusive, they have their own shops and Media Markt. Manufacturer -> retailer -> consumer

Question 35

Exclusive distribution

Answer 35

* The opposite of intensive distribution * Strictly limited number of dealers * €€€ * Exclusive dealing arrangements * Manufacturer maintains control Example: Dior bag

Question 36

Marketing logistics

Answer 36

Marketing logistics = “Getting the right number of products to the right place at the right time at the lowest total cost.” How goes the product from A -> B? -> Train/Plain/Truck Just in time production logistics means things come when you need it Example: AH Helmstraat

Question 37

Retailing

Answer 37

Retailing = “Retailing includes all activities involved in selling products and services directly to ultimate consumers for their personal, family or household use.” HEMA = future of retailing