unit 9: product Flashcards
1
Q
product
A
- Good or service that is characterized by tangible and intangible attributes
- Good: physical or virtual item capable of being delivered to a purchaser
- Durable: last over an extended number of uses, purchased infrequently, ex: household appliances, cars, etc.
- Non durable: consumed in one or a few uses, replenished frequently, ex: food products
- Service: action or activities resulting in measurable change of state for the purchaser caused by the provider
- Tangible: physical characteristics that are discernible by the senses, ex: colour, taste, smell
- Intangible: symbolic or subjective characteristics, ex: stylish, reliable, comfortable
2
Q
Total Product Concept
A
- Conceptualization of a product that helps to identify its major benefits (core, actual, augmented)
- physical item as well as packaging, brand name, label, service guarantee, warranty, and image presented by the product
1. core product: basic definition, fundamental benefits derived from using the product
2. actual product: attributes that deliver, features a customer takes into consideration when buying a product, and use branding, packaging, design, etc. to differentiate product
3. augmented: additional features features that the buyer may not require, supporting services
3
Q
Product mix
A
total range of products offered for sale by a company, combination of product lines
4
Q
product line
A
- group of similar or related products, marketed under single brand name and offered by same company
- Ex: lululemon started out as women’s yoga and now has expanded
- A firm’s product line is described in terms of width and depth
- Product line width: number of lines in the mix
- Product line depth: number of items in the line
5
Q
price
A
Money or other something of value exchanged for the ownership or use of a product
6
Q
penetration pricing
A
- Set a low initial price on a new product to appeal to the mass market, then increase the price over time
- Generates interest
- Attracts customers from competitors
- May not retain customers
7
Q
skimming
A
-Set the highest initial price that customers desiring the product are willing to pay, lower the price once demand of these consumers are satisfied
-Generates revenue early
-Creates perception of high quality
-Can encourage entry of competitors
Ex: apple
8
Q
prestige pricing
A
-Product price is set high and remains high
-Effective for products intended to be status symbols
-High profits
Potential for limited customer base
-Effective marketing needed
Ex: rolex
9
Q
odd even pricing
A
- Set prices a few dollars or cents under an even number
- Creates the illusion of a bargain
- Product may be perceived as being of lower quality
- Pricing can be seen as manipulative
10
Q
below market pricing
A
- Setting a price lower than that of competitors
- Attracts price conscious shoppers
- Allows for larger sales -volumes
- Product may be perceived as lower quality
- Loss Leader Pricing
- Product is sold at a price that isn’t profitable in hopes that customers will buy additional regularly priced products
- Common for new businesses
- Helps to build a customer base
- Can attract “cherry picking” buyers
11
Q
place
A
- Retailing: sale of a product from a point of purchase directly to a customer who intends to use that product
1. place: making products easily accessible to potential customers, includes: convenient store locations, discoverability online, numerous purchasing
2. possession: increasing ease of ownership, includes: payment plans numerous payment options
3. form: degree to which product design meets customer needs, includes: customized products, product alterations, wider selections
4. time: making products available in a timely manner, includes: extended hours, 24 hour availability, same day delivery, season items year round
12
Q
retailer classification
A
Categorizing retailers on the basis of ownership
13
Q
independent retailer
A
- Owner by individual, family, partnership
- Owners responsible for decision making in business
- 1-3 locations
14
Q
corporate chain
A
- Multiple outlets under common ownership
- Largely centralized control
15
Q
contractual system
A
- Agreement between an individual and a business to operate an outlet
- Greater independence
- Ex: tim horton, subway, pizza hut
16
Q
promotion
A
- Communication or activity intended to persuade target audience of the merits of a given product
- Intended to generate interest, encourage sales, improves brand image
17
Q
advertising
A
- Paid form of media used to communicate to consumers about a product/brand
- Includes: billboards, print advertisements, television commercials, radio commercials, online advertisements
- Goal is to encourage purchasing
18
Q
shock appeals in advertising
A
- Words, images, and or actions intended to deliberately startles and offend
- May contain controversial, disturbing, provocative
- Intended to capture attention
19
Q
shock appeals in advertising
A
- Dahl et al (2003)
- Write down descriptions of posters you remembered seeing
- Identify which poster captured your attention the most
- Indicate which posters you saw from a list of options
20
Q
sexual appeals in advertising
A
- Words, images and or actions intended to deliver a message designed to evoke sexual thoughts, feelings, and or arousal in a target audience
- May be explicit or subtle
- May be related or unrelated to product
- Over 17,000 participants from 78 studies
- Sexual appeals had no significant effect on:
- Brand recognition, brand recall, intention to purchase
21
Q
customer promotion
A
- Communication tool that provides short term incentives to generate interest in a product
- Includes: coupons, contests, rebates
- Encourages immediate purchase
22
Q
public relations
A
- Influences target groups through unpaid media exposure
- Includes: press release, press conference
- Designed to create enhance a company’s image
- Messaging can be seen as more objective and trust worthy
23
Q
experiential market
A
- Create an interactive experience between customers and product/brand
- Consumers not viewed as passive message recipients
- Can create emotional connection to product/brand
24
Q
product item
A
- a unique product offered for sale by an organization
- Unique selling point: the primary benefit of a product or service, the one feature that distinguishes a product from competing products
- Grows into a line
- Ex: starbucks
25
product classifications
- divided in 2 ways
1. A product is classified according to the target market it is intended for
2. It is classified according to the durability and tangibility it offers
- Products are also divided into two groups based on who buys them and why
1. consumer goods: products and services ultimately purchased for personal use
2. industrial (business) goods: products and services purchased to be used directly or indirectly in the production of other goods for sale
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non durable good
a tangible good normally consumed after one or a few uses, ex: toothpaste, coffee, milk
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durable good
a tangible good that survives many uses, ex: furniture, phone, appliances, etc.
Consumer goods
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convenience goods
- those goods that consumers purchase frequently, with a minimum effort and evaluation
- Generally consumers don't spend much time purchasing convenience goods
- Marketing communications and eye catching packaging can go a long way for these items
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shopping goods
- goods that the consumer compares on such bases as quality, price, sustainability, and style before making a selection
- Other factors include: dependability, customer support, functionality, guarantees, and warranties
- Clothing, appliances, household furnishings, home decor
- Price of shopping goods tends to be higher and buying nature is more rational in nature, likely to shop around and make comparisons
- Should consider being near competitors where comparisons can easily be made, having consistent and attractive image and having effective communications
- Important to have a strong online presence so shoppers can research properly
- Ex: go pro
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specialty goods
-goods that consumers will make an effort to find and purchase because the goods possess some unique or important characteristic
In effect, consumer has already chosen what to buy and will just go out to get it
-Considerations: image and reputations resulting from communications, product quality, and the availability of goods in the appropriate stores
-Price is usually high, in keeping with product quality and prestigious image created by other marketing activities, is also a consideration
-Ex: coach hand bag
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Industrial (Business) Goods
- Industrial (or business) goods are products or services that have a direct or indirect role in the manufacture of other products and services
- Classified by the function the good has in the production of another good
- Considerations: price, personal selling, ability to meet customer specifications, and the reliability of supply when direct channels of distribution are used
- Divided into 3 categories: capital items, parts and materials, and supplies and services
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capital items
- expensive goods with a long life span that are used in the production of another good or service
- Whether the item has a direct or indirect role in the production process determines which of the two types of capital item it is
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installations
- major capital items used directly in the production of another product
- Ex: buildings, production line equipment, and computer systems
- These goods are characterized by their high price, long life, reliance on strong personal selling programs to gain customer acceptance, technical sales, and support service and direct channels of distribution
34
Accessory equipment
-items, such as computers and power tools that facilitate an organization’s operations
Indirect role
-less expensive than installations, ex: computers, photocopiers, power tools, and office furnishings
-Characterized by long life, significance of price negotiation in the marketing process, and the unique features of the product that appeal to rational buying motives
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Parts and materials
- less expensive goods that directly enter a manufacturers production process
- Divided into 3 categories: raw materials, processed materials, and component parts
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raw materials
- farm good and other materials derived directly from natural resources
- Raw materials ex: crude oil, lumber, iron ore
- Farm goods ex: wheat, livestock, fruits, vegetables, and milk
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processed materials
- materials that are used in the production of another product but that are not readily identifiable with the product
- Ex: du pont nylon, a synthetic fibre used in clothing, and other yarns that become part of cloth fabrics
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component parts
- goods that are used in the production of another product but do not change form as a result of the manufacturing process
- Ex: glass windows, steering columns, radios, tires, and steel frames
- Price and negotiation are important considerations
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supplies
-standardized products that are routinely purchased with a minimum of effort
divided into 3 categories maintenance, repair, and operating supplies
-Ex: paint is a maintenance supply, bearings and gears are examples of repair supplies, writing instruments are examples of operating supplies
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branding strategies
- To develop a brand strategy, a manager makes decisions in unique, closely related areas
- First, decisions must be made regarding brand name and logo
- second , decisions are made about the design of the package and what information the label must communicate
41
brand
- a name, term, symbol or design or some combination of these, that identifies a good or service
- key components: brand name, brand logo, trademark, patent
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Brand name
- that part of a brand that can be vocalized
| - Ex: axe, dove, fido, etc.
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brandmark or logo
- the unique design, symbol, or other special representation of a company name or brand name is referred to as a brand mark or logo
- Brand mark: that part of a brand identified by a symbol or design
- Ex: facebook’s “f” icon
44
trademark
- that part of a brand granted legal protection so that only the owner can use it
- Nike swoosh
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patent
- a provision that gives a manufacturer the role right to develop an market a new product, process or material
- An industrial design registration protects appearance, while patent protects function
- Max life of a canadian patent is 20 years since the application was filed
46
national brands
a national brand organization has 2 branding options: an individual brand strategy or a family brand strategy
Ex: canadian tire
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Individual brand strategy
- the identification of each product in a company’s product mix with its own name
- Common among large packaged goods manufacturers such as Kraft Heinz
- Multi Brand strategy: the use of a different brand name for each item a company offers in the same product category, brands compete but the revenue all goes to the same place
48
family brand strategy
- the use of the same brand name for a group of related products
- Usually steeped in tradition and come quickly since they have been on the market for a long time
- May have embraced the company name or may be a name that a company has popularized over an extended period
- Ex: procter and gamble with old spice
- Offers 2 advantages
1. Promotional expenditures for one product will benefit the rest of the family by creating an awareness of the brand name
2. Customers and distributors accept new products more readily because the products capitalize on the success and reputation of the existing family products, called the halo effect
- Ex: lululemon with mens clothing
49
co branding
- occurs when a company uses the equity in another brand name to help market its own brand name product or service also applies to two organizations sharing common facilities for marketing purposes
- Ex: ben and jerrys and new belgium brewing combine to make chocolate chip ale that will go toward climate change
- A key issue with co branding to consider is “fit” its essential for the brands to complement each other
50
private label
- a brand produced to the specifications of the distributor, usually by national brand manufacturers that make similar products under their own brand names- also called a store brand
- The private label brand was originally conceived as a means by which a retailer could provide the price conscious consumer with a product of reasonable quality as an alternative to national brands
- Private label brands have taken away from national label brands, as a result many manufacturers have developed a three and out approach: either you're among the top 3 in a given category or you're out
51
generic brand
- a product without a brand name or identifying features, and is less expensive than private label or national brands, ex: yellow label
- Common in cereals, paper products, canned foods, pet food
52
licensed brand
-Occurs when a brand name or trademark is used by a licensee
-The use of one firm’s established brand name or symbol on another firm’s products can benefit both firms financially
-Licensing is a way of legally allowing another firm to use a brand name or trademark for a certain period
-According to annual global licensing industry survey, 45% of all retail licensing sales are from entertainment and character related toys, clothing and other merch
Celebrity brand collaborations
53
cult brands
- a brand that captures the imagination of a small group of devotees who then spread the word, make converts and help turn a fringe product into a mainstream name
- Not fads, start small and build a steady following
- Many cult brands decide to stay small, while others opt for growth
- Developing a strong online community is a widespread strategy, consumers are dubbed into brand evangelists by marketing organizations they are supporting
- Ex: vans
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benefits of brands
- A good brand name accompanied by an attractive, attention getting package or good brand design will communicate the point of difference and highlight the distinctive value added
- Good branding strategy enables the marketer to create and develop an image for the brand
- A good slogan often summarizes the brand experience, ex: avis “we try harder”
- If the goal is brand loyalty, consumers remain loyal to brands that consistently meet their needs
55
brand loyalty
defined as the degree of consumer attachment to a particular brand of product or service. Can be weak or strong and varies from one category to another, measured in 3 stages
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brand recognition
customer awareness of the brand name and package
57
brand preference
the stage of a products life at which it is an acceptable alternative and will be purchased if it is available when needed
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brand instance
- at this stage, a consumer will search the market extensively for the brand he or she wants
- Task of marketer is to keep customers loyal, many studies have shown its far harder to convert a new customer than it is to retain a current one
- Many companies instituting a CRM program
59
brand equity
the value of a consumer describes from a product over and above the value derived from its physical attributes
60
trial purchase
when producing a new product marketers want customers to make the first purchase right away so that the product acceptance can be secured quickly
61
repeat purchases
marketers collect loyalty by offering incentives to customers to buy the item repeatedly
62
multiple purchases
promotions of this nature “load the consumer up”
63
coupon
- A coupon is a pre-saving incentives to stimulate quicker purchase of designated product
- The effectiveness of a brand specific coupon campaign is determined by the redemption rate
- redemption rate is the number of coupons return to an organization expressed as a percentage of the total number of coupons in distribution for a particular coupon offer
64
contest
- contests are designed to create short term excitement about a product a contest usually provides an incentive to buy an item requiring the submission of a product label or symbol and entry form that is included with the product
- A sweepstake contest is a chance promotion involving the giveaway of products and services of value to randomly selected participants who have submitted qualified entries
- a game (instant win contest) is a promotional vehicle that includes a number of predetermined, preceded winning tickets in the overall, fixed universe of tickets
65
free sample
free product distributed to potential use in either small trial size or regular size
66
premium
an item offered free or at bargain price to consumers who buy another specific item or make a minimum purchase premiums are usually offered to customers in three ways: mail, in pack or on pack promotion, or by distributing premiums with a product
67
delayed payment incentive
- a consumer is granted a grace period during which no interest or principal is paid for the item purchased
- types of delayed payment incentive promotions: appreciation, rewards partnerships, rebates
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reputation management
- public relations plays a vital role when a company face is a crisis. The final outcome of a crisis depends on how effectively a firm manages it’s public relations activity
- when facing a crisis situation acting quickly and decisively is the approach recommended by experts
- publicity is news about a person product service or idea that appears in print or broadcasted on media
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earned media
-free media exposure and publicity must be newsworthy
product seeding is placing a new product with a group of trendsetters who intern influence others to purchase the product.
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word of mouth marketing
recommendations by satisfied customers to prospective customers about a good or service
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public relations strategies
- Press release is a document containing all essential elements of the story (who what where when and why)
- A press conference is a gathering of news reporters invited to witness the release of important information about a company or product depending on the reason for calling a press conference the press kit would include information as a schedule of events and a list of company participants with biographical information, a press release photographs, copies of speeches, digital material, and any other relevant information
72
social media
- the online tools that people used to share content profiles opinions insight experiences perspectives and media itself does facilitating conversations and interactions online between groups of people
- public relations has long been associated with the word spin- spin implies that the marketer could deliver the message in a tone and manner of their liking
- with social media the goal is information sharing in a friends network, a concept referred to a shared media
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experiential marketing
- a form of marketing that creates an emotional connection with the consumer in personally relevant and memorable ways
- the term experiential marketing is a contemporary term that embraces several former descriptive term such as guerilla marketing, impact marketing, engagement marketing, and buzz marketing
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event marketing
the design and development of a live themed activity, occasion, display or exhibit that promotes a product cause organization
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event sponsorship
- the financial support of an event by sponsor in return for advertising privileges associated with the event
- Sports sponsorship occurs at amateur and professional levels and can be subdivided into classifications from local events to global events
- various levels of sports even marketing: local, regional, national, international, global
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venue marketing
-is another form of event marketing and associated with sports
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ambush marketing
a strategy used by non-sponsors to capitalize on prestige and popularity of an event by giving the false impression that they are sponsors
festivals, fairs, and annual event sponsorships in the realms of film comedy and music offer opportunities to reach cross-section of adult target audiences
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steps in personal selling process
1. prospecting: the first step is prospecting a systematic procedure for developing sales leads
2. pre-approach: involves gathering information about potential customers before actually making sales contact. During this stage customers are qualified: which is the procedure for determining if a prospect needs the product, has the authority to buy it, it has the ability to pay for it
3. the approach is the initial contact with the prospect typically a face-to-face situation
4. presentation: the actual sales presentation consist of a persuasive delivery and demonstration of a products benefits. it’s very important for the sales representative to listen attentively. Demonstrations play a key role they are opportunities to show a product in action and help substantiate the claims that the sales person is making.
5. handling objections: an objection is an obstacle that a sales person must confront and resolve if the sales transaction is to be completed.
6. Closing: consists of asking for the order, and it’s the most difficult step in the process of selling. trail close is an attempt to close that failed
7. follow up: an activity that keeps sales people in touch with customers after the sale has been made to ensure that the customer outside
