Foundations of Marketing Chapter 10

product
a good, service, or idea received in an exchange
good
a tangible physical entity
service
the sult of the application of human and mechanical efforts to people or objects
idea
a concept, philosophy, image, or issue
the core product
the products fundamental utility or main benefit

addresses the basic needs of the consumer

supplemental features
provide added value or attributes in addition to a products core utility
consumer products
purchased to satisfy personal and family wants and needs
business products
bought to use in a firm’s operations, to resell, or to maker other products
What are the four classifications of consumer products?
Convenience Products
shopping products
specialty products
unsought products
convenience products
relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort
shopping products
items for which buyers are willing to expend considerable effort in planning and making purchases
Specialty products
items with unique characteristics that buyers are willing to expend considerable effort to obtain
unsought products
a product purchased to solve a sudden problem; products of which customers are unaware; any products that people do not think of buying
business products
bought to use in a organization’s operations, to resell, or to make other products
installations
facilities and non-portable equipment
accessory equipment
not part of the final product
raw materials
natural materials that are part of a product
component parts
finished items ready for assembly, or that need little processing
process materials
used in production, but not identifiable
MRO supplies
Maintenance, repair, and operating items that are not part of the final product
services
intangible products in operations
product item
a specific version of a product that can be designated as a distinct offering among an organization’s products
product line
a group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations
Product mix
the total group of products that an organization makes available to customers
width of product mix
the number of product lines a company offers
depth of product mix
the average number of different product items in each product line
What are the stages of the product life cycle?
Introduction
growth
maturity
Decline
Introduction
-first stage of product’s life cycle
-sales start at 0 and profits are negative
-high risk of failure

buyers must be made aware of: features, uses, advantages

sellers lack: resources, tech knowledge, marketing know-how

Growth
-sales rise rapidly, profits peak and start to decline
-promotion costs start to drop as a percentage of sales

markets must:
-stress brand benefits to encourage brand loyalty
-intensify segmentation
-strengthen market share
-analyze production position
-ensure efficient distribution system

Maturity
the sales curve peaks and starts to decline; profits continue to fall
-intense competition
-emphasis on improvements and diffs in comps’ products
-weaker competitors leave market
-Ads and dealer-oriented promotion predominate
-distribution may expand to global mkt

strategic objectives
-generate cash flow
-maintain market share
-increase share of customer

decline
sales fall rapidly

markets will likely
-eliminate/reposition items
-cut promotions
-eliminate marginal distributors
-plan to phase out of product

Five Stage Product Adoption Process
Awareness
Interest
Evaluation
trial
Adoption
Awareness
the buyer becomes aware of the product
interest
buyer seeks information and it receptive to learning about the product
evaluation
the buyer considers the product’s benefits and decides whether to try it
trial
the buyer examines, tests, or tries the product to determine if it meets his or her needs
adoption
buyer purchases the products and can be expects to use it again whenever the need for this type of product arises
innovators
first adopters of new products
early adopters
careful choosers of new products
early majority
those adopting new products just before the average person
late majority
skeptics who adopt new products only when they feel it is necessary
laggard
the last adopters who distrust new products
brand
a name, term, design, symbol, or other feather that ids the marketer’s product as distinct from those of other marketers
brand name
the part of the brand that can be spoken
brand mark
the part of a brand that is not made up of words
trademark
legal designation of exclusive use of the brand
trade name
full name of an organization
cultural dimensions
-subjective; individuals confer social meaning onto brands
-based on symbolic meanings and key associations
cultural branding
term that has been used to explain how a brand conveys a powerful myth that consumers find useful in cementing their identities
Brand Equity
the marketing and financial value associated with a brand’s strength in a market
what are the four elements that underlie brand equity?
1.brand-name awareness
2. brand loyalty
3. perceived brand quality
4. brand associations
Brand Loyalty
A customer’s favorable attitude toward a specific brand
brand recognition
customer’s awareness that the brand exists and is an alternative purchase
brand preference
degree of brand loyalty in which a customer prefers one brand over competitive offerings
Brand insistence
degree of brand loyalty in which a customer strongly prefers a specific brand and will accept no substitute
manufacturer brand
brands initiated by producers
private distributors brands
brands initiated and owned by resellers
generic brands
brands indicating only the product category
individual branding
a policy of namingeach product differently
family branding
branding all of a firm’s products with the same name
brand extension
using an existing brand to brand a new product in a different product category.
co-branding
using two or more brands on one product
brand licensing
an agreement whereby a company permits another organization to use its brand on other products for a licensing fee
family packaging
using similar packaging for all of a firms products or packaging that has one common design element
secondary-use packaging
packaging that can be reused for purposes other than its initial function
category-consistent packaging
product is packaged in line with the packaging practices associated with a particular product category
labeling
providing identifying, promotional, or other information on package labels