Entrepreneurial Marketing Exam 2

What is a Product
A good, service, idea, or combination exchanged to meet customer needs
Product
Tangible object
Service
Intangible offering
Product Layers
1: Core Product
2: Actual Product
3: Augmented Product
Core Product
Basic benefits
Need served
Actual Product
Features, package, brand, quality, apperance
Augmented Product
Warranty, repair, service, installation, delivery, credit, instructions
Types of New Products
1: Continuous innovation
2: Dynamically continuous innovation
3: Discontinuous innovations
Continuous innovations
Little disruptive influence
Existing pattern & new solution to ritual
Minor modifications
Product line extensions
Dynamically continuous innovations
Some disruption but doesn’t alter existing buying patterns
Discontinuous innovations
Fundamental changes in buying behavior
Characteristics of services
Intangible
-can’t see, touch, or smell
Perishable
-Can’t be stored; used, or lost
–Capacity management
—Adjust offerings to demands
Variable
-Performed differently time to time
Inseparable
-Tied to provider
Service Quality
Service encounter
-Interaction between customer and service provider
Service Quality
-Depends on service encounter
-Internal Marketing:
–Used for education and training
Measuring Service Quality
Gap Analysis
-Difference between expectation and what actually occurred
New Services
1: If Labor-intensive: providers are part of the experience and part of the innovation
2: May require customers presence
3: No tangible product to carry brand name
Service Innovations
1: New Concepts: FedEx overnight
2: Process innovations
3: Service lines extensions
4: New elements or improving existing ones
5: Continuous innovation
Characteristics of a successful new
1: Superior advantage
2: Compatibility
3: Simplicity
4: Observability
5: Trialability
6: Low perceived risk
7: Intellectual property protection
Purple Cow
Product that stands out (I think)
Failures
90% fail in the long run
Product adoption pyramid
1: Awareness
2: Interest
3: Evaluation
4: Trial
5: Adoption
6: Confirmation
Diffusion
Manner/speed which consumers adopt new products/services
Categories of adopters
1: Innovators
2: Early adopters (the ones to go after)
3: Early majority
4: Late majority
5: laggards
3 strategies (to stay relevant)
1: Modify
2: Find new customers
3: Find new users
Value Migrations
Making good, better & best versions
Target to specific markets
4 stages of product life cycle
1: Introduction
2: Growth
3: Maturity
4: Decline
Types of consumer products
Convenience products
-Frequently bought with little effort
Shopping products
-Considerable time/effort in selection
Specialty products
-Unique characteristics
Unsought products
-Consumers have little or no interest
Product Mix
Product line strategies:
1: Full line
2: Limited line
3: Extending the line
4: Contracting the line
Types of new products
1: New positioning
2: New packaging
3: Product line extension
4: Complimentary products
5: Innovations
Types of product innovations
1: Continuous innovation
2: Knock off
3: Dynamically continuous innovations
4: Discontinuous innovations
Brand
Name, term, symbol, or unique element that identifies & sets them apart
Trademark
Legal name for a brand name, brand mark, or trade character
Importance of branding
Differentiate your product from the market
Brand Equity
Added value beyond features/benefits
Highlight products differences and charges premium
Types of brands
-Generic
-Store brand
-Trade name
Characteristics of a good brand
1: Effectively communicates value to customer
2: Relevant to customer
3: “Resonates” with customer
4: Sustained overtime
5: Reinforces intended positioning
6: Easily understood by customers and employees
Entrepreneurial Branding Process
1: Conduct brand analysis
-Right fit of core strengths, customer needs what competition isn’t good at
2: Determine brand positioning
-Unique benefits
-Emotional connection “best”
3: Select brand name and identity
-Key benefits
-Distinctive, positive
-Easy to pronounce/remember
-Legal to use
4: Branding strategy
-Corporate
-Individual product
-Hybrid
5: Brand communication strategy
Branding Strategies
1: Corporate branding – Branded house
2: Individual branding – House of brands
3: Hybrid branding
Price
Only 2 ways to grow revenue:
1: Increase prices
2: Increase items of goods sold
-Easiest variable to change
-Most complex in marketing plan
-Marketers create value by satisfying needs and capture value through appropriate pricing
What a buyer will accept: 4 key issues
1: Cost
2: Demand
3: Customer value
4: Competitors price
Price isn’t always monetary
1: Opportunity cost
-Benefits you could have
2: Cost-Value relationship
-Value = Benefits/Cost
Importance of price
1: Create profits
2: Provide funds
-R&D, marketing, capital expansion
3: Influence customers
4: Affect market share
-Profits vs. market share
Psychological pricing considerations
1: Assimilation effects (parity pricing)
– “Close” pricing suggests that product are similar
2: Contrast effects
– Disparate pricing may encourage purchase of hight priced item
3: Price-quality inferences
– Further up the scale we go, price goes up