Marketing Wk 05

Product Life Cycle
describes the stages a new product goes through in the marketplace
Introduction Stage
occurs when a product is first introduced in the market
slow sales growth
minimal profit
marketing objective is to create consumer awareness and stimulate trial
Growth Stage
rapid increases in sales
competitors begin to appear
emphasis on advertising shifts to stimulating selective demand
improved versions are created, new features added, product proliferation occurs
Maturity Stage
marginal competitors begin to leave
characterized by a slowing of total industry sales or product class revenue
sales increase at a decreasing rate
profit declines due to fierce competition pricing
marketing attention is directed toward holding market shares through further product differentiation and finding new customers
Decline Stage
occurs when sales and profits begin to drop
products enter this stage frequently because of environmental changes
technological innovations precede this stage as new replaces old
products tend to consume a disproportionate share of management time and financial resources
Deletion
most drastic strategy in solving the decline stage
not taken lightly
dropping or removing a product from a companies product line
Harvesting
occurs when a company retains the product but reduces the marketing support costs
used to maintain the ability to meet customer requests should they arise
second strategy in solving the decline stage
High Learning Product
one for which significant education of the customer is required and there is an extended introductory period
Low Learning Product
sales begin immediately because little learning is required by the consumer and the benefits of the purchase are understood
Fashion product
life cycles for this often appear in men’s and women;s clothing styles
Product Modification
involves altering product characteristics
Market Modification
company’s try to find new customers, increase products use among current customers or create new ways to use their products
Product Repositioning
changing the place a product occupies in a consumers mind relative to competing products
Trading Up
involves adding value to products through additional features or higher quality markets
Trading Down
reducing the number of features, quality, price
often exists when downsizing
Branding
organizations use a name, phrase design, symbol or combination of these to identify its products and distinguish them from others
Trade Name
a commercial, legal name under which a company does business i.e.) Tim Hortons
Trademark
identifies that a firm has legally registered its brand name or fad name so that it has exclusive use which prevents others from using it
Brand Personality
a set of human characteristics associated with a brand name
research shows that consumers assign personal qualities to products and choose brands that are consistent with their own desired or self images
Brand Equality
the added value that a given brand name gives to a product beyond the functional benefits provided
provides a competitive advantage
consumers are often willing to pay more for this
Multiproduct Branding
a company uses one name for all its products in a product class
sometimes called “family branding” or “corporate branding”
brand extension is possible
lower advertising and promotion costs
sub branding (combines corporate or family branding with a new brand)
Multibranding
involves giving each product a distinct name
Private Branding
often called private labelling or reseller branding
occurs when a company manufactures products but sells them under the brand name of a wholesaler or retailer
produces high profits for the resellers and manufacturers
Cohort Brand Management
a recent innovation
the bundling of one company’s multiple brands into a single marketing effort aimed at the common consumer group
typically done online
Mixed Branding
a firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market
Social Benefit Brands
brands that have a special added value in terms of their core environment or social benefits provided to consumers
Green Brands
brands that focus on environmental sustainability
Packaging
a component of a product that refers to any container in which it is offered for sale and on which label information is conveyed
Label
typically identifies the product or brand, who made it, where and when it was made, how it is to be used as well as package contents and a list of ingredients
Communication Benefits
label information that is conveyed to the consumer
– directions on usage, composition of the product, safety requirements (if any)
Functional Benefits
plays an important functional role such as storage, convenience, protection or product quality
changing the style of bottles, lids, measurements, added safety features
Perceptual Benefits
created in consumer minds
package, label shape, colour and design distinguish one brand from another which conveys a brand(s) position and builds its equality
enhance brand recognition
Warranty
statement indicating the liability of the manufacturer for product deficiencies
represent negative consequences and provide significant marketing advantage for the producer
Implied Warranty
assign responsibility for product deficiencies to the manufacturer
Full Warranty
has no limits of non coverage (everything is covered including water damage- cellphone)
Limited Coverage Warranty
specifically states the bounds of coverage and areas of non coverage
Express Warranties
written statements of liabilities
Services
activities, deeds or other basic intangibles that are offered for sale to consumers in exchange for money or something else of value
A Pure Good
implies that the consumer obtains benefits from the good alone without any value added from a service
A Pure Service
assume there is no “goods” elements to a service that the customer will receive
Inventory
inventory problems exist with goods because items are perishable and costs are associated with their handling
service inventory carrying costs are subjective and related to “idle product capacity”
Inseperability
where goods are produced, then sold, then consumer services are sold first then produced and consumer simultaneously
Inconsistency
developing, pricing, promoting and delivering services is a challenge because the quality of service is often inconsistent
services depend on who provides them and the quality varies with each persons capability and day to day performance
Intangibility
services cannot be held, touched or seen before a purchase decision is made
Consumer Contact Audit
a flow chart of the points of interaction between consumers and service providers (points are referred to as contact, touch points and service encounter elements)
Product
concept of product components of the marketing mix must be applied equally to all gs/ss
Price
charges, fees, rates, fares and tuition
often perceived by consumers as a possible indicator of quality or service
goes beyond the traditional task of the selling price
Place (distribution)
intermediaries are rarely involved in the distribution of a service; the distribution site and the service deliverer are the tangible components of the service
Promotion
value of the promotion especially advertising it to show consumers the benefit of purchasing the service
People
services depend heavily on people for creation, delivery and consumption
customer behaviour influences their own service outcomes
Physical Evidence
appearance of the environment in which the service is delivered and where the firm and customer interact
includes: building, landscape, vehicles, furnishings, signage, social media, equipment
Process
refers to the actual procedures, mechanisms and flow of activities by which the service is created and delivered
involves how and what gets created
capacity management & off peak pricing
Capacity Management
service marketers have a relatively fixed capacity to produce a service they must make it as productive as possible without compromising service quality
Off Peak Pricing
consists of charing different prices during different times of the day or week or year to reflect variations in demand for that service