Week 5 - Product

Question 1

What is a product?

Answer 1

The product is what the marketer takes to the market to get consumers to buy or engage in some type of exchange

Products rarely stay the same and will change to suit new technology and changing states

Question 2

Goods, services, and ideas

Answer 2

A product is defined as a good,service or idea offered to the market for exchange

Goods are physical, tangible offerings that are capable of being delivered to a customers

Service are intangible offerings to the market

An idea can also be offered to the market in the form of a concept, issue

Question 3

The total product concept

Answer 3

The total product concept is a way of viewing a product as the totality of value and benefits it provides to the customer

It is crucial for marketers to understand that when customers choose a product, they do not purchase a ‘thing’; rather, they buy a solution to a problem

Question 4

Variations of product

Answer 4

Core Product
Expected Product
Augmented Product
Potential Product

Question 5

Core Product

Answer 5

The fundamental benefit that responds to the customer’s problem of an unsatisfied need or want. For example, for a car, the core product is transportation.

Question 6

Expected Product

Answer 6

This encompasses the tangible aspects, such as design, quality, and features.

Question 7

Augmented Product

Answer 7

These are additional benefits that enhance the customer experience, such as warranties, customer service, or free delivery.

Question 8

Potential Product

Answer 8

The potential product includes future upgrades, new features, or improvements that could be introduced. e.g. software updates that enhance security or add new functions, hardware upgrades, or compatibility with upcoming accessories

Question 9

Product Relationships

Answer 9

The relationships between the organisation’s products can be described as follows
- Product item
- Product line
- Product mix

Question 10

Product Item

Answer 10

This is the basic unit of a product, representing a unique model or version. A product item refers to a specific product within a line that has unique characteristics, such as brand, size, or price. For instance, within Apple’s offerings, the iPhone 15 Pro would be a product item.

Question 11

Product Line

Answer 11

A product line is a group of related products that are marketed under a single brand and share similarities, such as purpose, target audience, or price range. Products in a line often vary in features or specifications but are fundamentally similar. For example, Apple’s iPhone series, which includes different models like the iPhone 15, iPhone 15 Plus, iPhone 15 Pro, etc., represents a product line.

Question 12

Product Mix

Answer 12

Also known as the product assortment, the product mix encompasses the entire range of products that an organisation offers. It includes all product lines and items a company sells. For example, Apple’s product mix includes multiple product lines like the iPhone, iPad, Mac, Apple Watch, and AirPods. The diversity and depth of the product mix reflect the company’s strategy for meeting different consumer needs and market demands.

Question 13

Product classification

Answer 13

Consumer products are classified into one or more of the following main categories
- Shopping product
- Convenience product (Staple, impulse, emergency)
- Specialty products
- Unsought product

Question 14

Shopping Products

Answer 14

• Involve moderate to high engagement with decision-making
• Expected to last a long time
• Purchased relatively infrequently
• Sell in low volume
  e.g. Electrical appliances, furniture, cameras, clothing

Question 15

Convenience Products

Answer 15

Frequently purchased & sold in high volumes.
Three further categories
- Staple Products (Essentials to consumer’s everyday life - Food)
- Impulse Products (Goods which are purchased quickly because of sudden urges - Candy bar)
- Emergency Products (Items which are bought to meet immediate and unexpected needs - umbrella when raining)

Question 16

Specialty Products (1)

Answer 16

Unique characteristics desired by their buyers
Consumers know exactly what they want, pre-selected by consumer
No close substitutes or alternatives

Question 17

Specialty Products (2)

Answer 17

Available at a limited number of outlets
Purchased infrequently
Sell in low-volume
E.g Luxury bags (Hermès, Chanel, and Louis Vuitton)

Question 18

Unsought Product

Answer 18

Unknown or unconsidered by the consumer

Challenge = making consumers aware

Marketing communication efforts = crucial

Question 19

Product Classification

Answer 19

Business-to-business products are products purchased by individuals and organisations for use in the production of other products or for use in their daily business operations

Business-to-business products can be classified into three categories:
- Parts and materials (Raw materials, components)
- Equipment
- Service and supplies

Question 20

Product Life Cycle

Answer 20

1. New product development
2. Introduction
3. Growth
4. Maturity
5. Decline

Question 21

New Product Development

Answer 21

1. Idea generation
2. Screening
3. Concept evaluation
4. Marketing strategy
5. Business analysis
6. Product development
7. Test marketing
8. Commercialisation

Question 22

Product Adopotion

Answer 22

Awareness - The consumer becomes aware of the new product - consumer knows a little about the product

Interest - The consumer is interested in the product and finds more information about it

Evaluation - The consumer evaluates the information and decide whether or not to try it

Trial - The consumer tries the product and see if its satisfy their needs and wants

Adoption - The consumer buys the product and evaluates it and determines whether they will repurchase it.

Question 23

Introduction

Answer 23

Considerable investment required

Goal: Build awareness and interest

Lag in building sales

Sales recoup R&D costs

Minor profits towards the end

Question 24

Growth

Answer 24

Increase in popularity, sales and profit

Dependent on welcomingness of market

Competitors begin to enter the market with similar products

Question 25

Maturity

Answer 25

Novelty wears off Competitors more of and established Sales peak and profitability falls Decision to determine future of the product - Change marketing mix (move back to growth) - Leave the market and allow decline

Question 26

Decline

Answer 26

Sales and profits fall New products entering Little interest Drop or change the product

Question 27

The diffusion of innovation

Answer 27

The diffusion of innovation describes how innovations are adopted by the market over time It suggests that the influence of social groups on the decisions made by individuals how new products and ideas are adopted

Question 28

The diffusion of innovation categories of innovaters

Answer 28

Innovators Early Adopters Early Majority Late Majority Laggards

Question 29

Innovators

Answer 29

People who they send the product out to (reviewers, famous people)

Question 30

Early Adopters

Answer 30

People who buy the product straight after release

Question 31

Early Majority

Answer 31

People who buy the product once it becomes popular

Question 32

Late Majority

Answer 32

People who gets the product towards the end of popular life cycle

Question 33

Laggards

Answer 33

People who buy the product once the hype is over

Question 34

Product Differentiation

Answer 34

Product differentiation is the creation of products and product attributes that distinguish one product from another (e.g. design, brand, image, quality and features) Most of the product’s differentiating features are part of the augmented product layer.

Question 35

Branding

Answer 35

Brand - Refers to a collection of symbols intended to create an image in the customer’s mind that differentiates a product from competitors’ products - Name - Logo - Slogan - Design

Question 36

Brand Name

Answer 36

A brand name is part of a brand that can be spoken and can include words, letters and numbers. A brand mark is a part of a brand not made up of words - it often consists of symbols and designs To protect the brand, an organisation can register it as a trade mark with the relevant body. (e.g. IP Australia, or the Intellectual Property Office of New Zealand)

Question 37

Brand Equity

Answer 37

A well-known brand can be precious to an organisation in financial and non-financial terms. The added value that a brand gives a product is known as Brand Equity. For marketers, the brand: - Identifies the organisation's product - Differentiates the organisation’s products from competing products - Attracts customers - Helps introduce new products - Facilitates the promotion of same-brand product

Question 38

Brand Equity

Answer 38

Brand loyalty: exists when the customer show a highly favourable attitude towards a specific brand Brand equity metrics: Measuring the value of brands is extremely useful to organisations High brand equity can be a valuable asset for a company and provide a strong competitive advantage

Question 39

Brand Equity Metrics

Answer 39

Brand assets (e.g. trademarks and patents) Stock price analysis Replacement cost Brand attributes Brand loyalty Willingness-to-pay analysis

Question 40

Brand assets

Answer 40

these are tangible assets tied to a brand, like trademarks, patents, and copyrights, which legally protect brand identity, logos, slogans, and proprietary technology.

Question 41

Stock price analysis

Answer 41

This examines how the brand’s equity affects its publicly traded stock price. Strong brand equity often leads to higher investor confidence, which can drive up stock prices, indicating the brand's perceived value in the market

Question 42

Replacement cost

Answer 42

This is the estimated cost of recreating a brand from scratch, including marketing, advertising, and building customer loyalty. It reflects the financial value invested in establishing the brand’s reputation, visibility, and consumer trust, underscoring the cost of building similar brand equity.

Question 43

Brand attributes

Answer 43

Unique characteristics or qualities associated with the brand, such as reliability, innovation, and quality. Positive brand attributes enhance brand recognition and consumer trust

Question 44

Brand Loyalty

Answer 44

This measures how likely consumers are to repeatedly purchase the brand’s products or services. High brand loyalty reflects substantial brand equity, as loyal customers tend to be less price-sensitive and more resistant to switching to competitors.

Question 45

Willingness-to-Pay Analysis

Answer 45

This assesses the premium customers are willing to pay for a brand’s products or services over similar, unbranded items. A high willingness to pay indicates strong brand equity, as customers perceive added value or unique benefits that justify the higher price.

Question 46

Brand Strategies

Answer 46

When developing brands within a product mix, an organisation may decide to pursue the following possible strategies - Individual Branding - Family Branding - Brand Extension

Question 47

Individual branding

Answer 47

Uses a different brand on each product, giving each its own specific identity

Question 48

Family Branding

Answer 48

Uses the same brand on several of the organisation’s products

Question 49

Brand Extension

Answer 49

Gives an existing brand name to new product in a different category

Question 50

Brand Ownership

Answer 50

Manufacturer Brands Private Label Brands Generic Brands Licensing Franchising

Question 51

Manufacturer Brands

Answer 51

Are owned by producers and are the most common type of brand

Question 52

Private Label Brands

Answer 52

Are owned by sellers, such as wholesalers or retailers, and are not identified with the manufacturer

Question 53

Generic Brands

Answer 53

Are those products that only indicate the product category

Question 54

Licensing

Answer 54

Some organisations can enter a licensing agreement to use the names and symbols of other brand for a fee

Question 55

Franchising

Answer 55

Has many parallels of licensing

Question 56

Co-Branding

Answer 56

Co-branding is the use of two or more brand names on the same product - Capitalise on the brand equity of multiple brands - Improve the perceived value of a product - maintain existing branding after another organisation's brands are acquired

Question 57

Packaging

Answer 57

Packaging can become an important recognisable way for customers to identify a particular product much like a brand

Question 58

Packaging (2)

Answer 58

Marketers may want to change the package to - express to customers that the product has changed in some way - Update the style of package or logo to broaden the customer appeal - Emphasises certain elements to further differentiate it from the competition

Question 59

Labelling

Answer 59

Usually, it forms parts of the package and provides identifying, promotional, legal and other information. At its most basic level, the label identifies the product and the brand name but can provide helpful information. (Product name, brand) Some of the information provided on labels is compulsory. (Ingredients for allergens)

Question 60

Approaches to management

Answer 60

Managing the product may require coordination and cooperation across different business departments. A business may employ product managers to manage particular products or product lines , or brand managers to manage a particular brand within the organisation's portfolio of brands

Question 61

Approaches to management (2)

Answer 61

Another alternative is to appoint a market manager who will be responsible for managing the marketing activities aimed at a particular part of the target market.

Question 62

Managing products through the life cycle

Answer 62

Marketers must determine which lifecycle stage their products is in to make appropriate decisions related to the marketing mix Line extensions are the most common form of ‘new’ product. They are variations or derivatives of an existing product added to the product line, rather than superseding the original product (each iPhone model builds upon the previous generation introducing new features, variation in size & enhancements like improved camera)

Question 63

Managing products through the life cycle 2)

Answer 63

There may be the need to change an aspect of the marketing mix to reposition the product Eventually, products may become obsolete. Product obsolescence may be either planned or unplanned