MRKT 3310

good, service, idea
a product may be a __ , __, or ___
attributes
a product’s ___ satisfy consumer’s needs
good, service
a __ is defined by having tangible, while a ___ has intangible attributes
nondurable, durable
a product that is consumed in 1 or a few uses is known as a __ good, while one that lasts over many uses is called a __ good
consumer and business products
when products are classified broadly based on the type of user, what are the 2 categories?
convenience product, shopping product, speciality product, unsought product
what are the 4 types of consumer products?
convenience
items that the consumer purchases frequently and with a minimum of effort are __ products
shopping
items for which the consumer compares several alternatives on criteria like price, quality, or style are ___ products
specialty
__ products: items that the consumer makes a special effort to search out and buy
convenience
laundry detergent would be considered to be a ___ product
shopping
an airline ticket would be considered to be a ___ product
business
___ products are characterized by derived demand
components, support products
for business products, ___ become part of a final product while __ are used to assist in producing other goods and services
support
buildings, tools, and supplies are ___ products for orgs
product item
___: a specific product that has an unique brand, size, or price
product line
___: a group of product or service items that are closely related because they satisfy a class of needs, are used together, sold to the same group, distributed through the same outlets, or fall within a given price range
lines
nike’s product ___ include shoes and clothing
product mix
___ consists of all of the product lines offered by an org
newness compared with existing products, newness in legal terms, newness from the org’s perspective, newness from consumer’s perspective
what are 4 important points of view when considering a product’s “newness”?
feature bloat
products may be considered new when they differ from existing products, but this encourages the proliferation of extra features which is known as __
dynamically continuous
__ innovation (1 of 3 types of new product innovation): disrupts consumer’s normal routine but doesn’t require totally new learning
continuous
__ innovation (1 of 3 types of new product innovation): requires no new learning by consumers
discontinuous
__ innovation (1 of 3 types of new product innovation): requires new learning and consumption patterns by consumers
continuous
___ innovation: when a toothpaste is improved by adding a whitening ingredient
discontinuous
what must the consumer learn about when a new product is a ___ innovation:
-previously unencountered benefits
-proper use of the product
6 months
the federal trade commission advises that the term “new” be limited to use with a product up to __ after it enters regular distribution
B, A, C
considering the concept of product newness from an organizational point of view, match the following by risk and level of innovation:
A) product line extension
B) radical invention
C) significant technology jump

__ revolutionary new products
__ threat of cannibalization
__ moderate risk

protocol
a ___ is a predevelopment statement that IDs a target market, customer needs, and what the product will be or do
3
less than __% of new consumer package goods (CPG) exceed first-year sales for $50 million (the benchmark for a successful launch)
new-product failures
insignificant points of difference, incomplete protocols, and bad timing are among the reasons for ___
new-product strategy development, idea generation, screening and evaluation, business analysis, development, market testing, commercialization
list the 7 steps of the new-product process
new-product strategy development
in the __ stage of the new-product process, an org defines the role of a new product in terms of the firm’s overall objectives
idea generation
__ is the stage of the new-product process that results in a pool of concepts as candidates for new products
open
apple’s use of the professional R&D lab IDEO to create the first computer mouse is an example of __ innovation
employees
general mills got the idea for nature valley granola bars when a mngr saw coworkers bringing granola to work in baggies, illustrating the importance of using __ in the new-product process
customers and suppliers
bc their ideas of what they want may be limited or skewed, __ should be used in the new-development process but with a focus on what the new product will actually do for them
industrial design
___: the applied art that improves the aesthetics and usefulness of mass-produced products for users
research and development (R&D)
orgs may rely on new products coming from its own labs, often known as ___ labs
assessing the strengths and weaknesses of competitor’s products
what is the most appropriate use of competitors in the development of new-product ideas?
screening and evaluation
the new-product process stage of __ involves determining which ideas should be eliminated from further effort
screening and evaluation
in the __ stage of the new-product process, a firm’s employees evaluate the technical feasibility of a proposed idea
concept testing
external evaluations in the screening and evaluation stage of new-product process often involved ___, consisting of preliminary testing of a new-product idea rather than an actual product
concept
in __ testing, new-product idea rather than an actual product is presented to potential consumers, often in written form, to obtain their reactions
concept tests
__ in the screening and evaluation stage of the new-product process are most useful when used for minor modifications of existing products
concept testing
___ helps an org determine early in the new-product process how the customer may perceive the product, as well as who would use it and how, before additional investment is made
business analysis
the new-product process stage of __ involves:
-making financial projections for a new product
-specifying the marketing strategy needed to bring a new product to market
prototype
__: a full scale operating model of a new product
business analysis
during the __ stage of the new-product process, orgs should consider:
-whether a new product will require new machinery to produce
-has potential to cannibalize existing products
-if product will require new patents
business analysis
due to the nature of services, the __ stage of the new-product process should include consideration of capacity mngt to influence consumer demand cycles
development
for services, a complete analysis of the “service encounter” may be required to develop customer service delivery expectations in the __ stage of the new-product process
development
safety tests, even for usage that is not as intended for a new product, are important to conduct in the __ stage of the new-product process
development
the __ stage of the new-product process involves:
-ensuring the product meets the standards established by the protocol
-manufacturing the product
market testing
the __ stage of the new-product process involves:
-exposing actual products to prospective consumers
-using realistic purchase conditions to see if consumers will buy
market testing
2 ways that ___ is used:
-to try different ways of marketing a new product
-to determine whether consumer will actually buy a new product
advertising, potential sales volume, pricing
during test marketing, what are 3 things that may be tested for a new product?
standard test marketing
when subway introduced a new sub in florida before launching it nationwide, it was engaging in __
test market
the following are desirable characteristics when choosing a __ for a new product:
-city pop that is demographically representative of target market
-cable system that is able to deliver different ads to different homes
simulated test markets
reasons some companies use ___ rather than test markets:
-market tests are time consuming
-market tests may alert competitors to a firm’s plans
-market tests are expensive
simulated test markets
in ___, participants are questioned abt a new product, shown ads about it, and finally given $ to make a decision abt whether or not to buy it
lower cost products (not services)
for what type of product is a test market more feasible?
commercialization
the new-product process stage of ___ involves launching full-scale production for a new product
regional rollouts
primary purpose of using ___ in the commercialization stage of the new-product process is to gradually build up production levels and marketing activities
commercialization
burger king’s new fries failed during __ bc they proved too complicated to get right day after day in all their restaurants (except under ideal conditions)
slotting fees, failure fees
commercialization of grocery products can be very expensive for manufacturers bc of what 2 things?
time to market
parallel development and fast prototyping are helpful in improving ___, a critical factor in the success of some new products
product life cycle
___: the different stages a product goes through during its existence
1 intro, 2 growth, 3 maturity, 4 decline
list the 4 stages of the product life cycle
introduction
the ___ stage of the product life cycle for a new product occurs when it is introduced to its intended target market
introduction
the ___ stage of the product life cycle is characterized by initial losses to the firm due to its high start up costs and low levels of sales revenue
introduction
in the ___ stage of the product life cycle, advertising and promotional spending is used to stimulate primary demand and build awareness
gain awareness
__ is a marketing objective when a product is in the intro stage of the product life cycle
primary
promotional expenditures in the intro stage are often made to stimulate __ demand
skimming, penetration
during the intro stage, pricing a product high is known as ___, and pricing it low is called ___
growth
the ___ stage of the product life cycle is characterized by a rapid increase in sales
sales, competition
the key characteristics of the growth stage of the product life cycle include rising __ and increasing ___
repeat purchasers
during the growth stage, part of the growth in sales is attributed to __, people who tried the product, were satisfied, and bought again
maturity
the ___ stage of the product life cycle is characterized by a slowing of total industry sales or product class revenue
maturity
marketing attention in the ___ stage of the product life cycle is often directed at holding market share though:
1 finding new buyers
2 further product differention
maturity
soft drinks and running shoes are at the ___ stage of the product life cycle
decline
when a product goes into the ___ stage of the product life cycle, the company may eventually remove it from the market
decline
during the ___ stage of the product life cycle, a company often minimizes promotion
harvesting, deletion
a company will resort to __ or __ when a product in the decline stage tends to consume a disproportionate share of resources relative to their future worth
product deletion
___: dropping a product from the company’s product line
harvesting
___ is when a company increases its profit from declining product by simply reducing its marketing costs
harvesting
when coke continues to make tab for fans but doesnt promote the drink, it is known as __
1 their length, 2 shape of their sales curves, 3 how they vary with different levels of products, 4 the rate at which consumers adopt products
what are the 4 aspects of product life cycles?
shortening it
mass communication and technological change can affect the product life cycle by ___
fad
a ___ product’s life cycle curve has a different shape than most products; it typically has rapid sales at intro and a rapid decline
high-learning
a long intro stage in the product life cycle is a characteristic of a ___ product
low-learning
a __ product life cycle curve is shaped like an inversed U-shape
form
product ___ pertains to variations within the product class, where each may have its own product life cycle curve
form
cassette tapes, CDs, and digital music are examples of product __
adopt
the diffusion of innovation refers to the rate at which consumers ___ a given product or service
diffusion of innovation
___ is the way a product spreads through the population
warranties, guarantees, extensive usage instructions, demos, free samples
what 5 things are effectively used by firms to stimulate initial trial of new products?
innovators (2.5%), early adopters (13.5), early majority (34), late majority (34), laggards (16)
list the 5 categories of product adopters (in order) based on when they adopt a new product
resisted
a new product that isn’t compatible with existing habits and provides no incentive to change is likely to be ___ by consumers
early adopters
which group of consumers is crucial to the success of new products bc of its social influence over later adopters?
innovators
__ are buyers of a product or service who are the first ones to adopt it
early adopters
__ are leaders in social settings
product modification
___ consists of altering the product’s quality, performance, or appearance
market modification
with ___ strategies, a company tries to find new customers, increase a product’s use among existing customers, or create new use situations
increasing product use
an example of ___ as a market modification strategy in the cereal category would be advertising the use of cereal as a late night snack
marketing mix
a firm can reposition its product by changing one or more of the __ elements
reposition
reasons a company may wish to __ its product:
-react to a competitors position
-change value offered
-catch a rising trend
trading up
example of a ___ repositioning strategy is a tire manufacturer offering more value by adding “run-flat” tech
trading down
downsizing the content of a product’s package is an example of a ___ strategy for repositioning
trademarks
brands are assets that can legally be protected through __
branding
__ provides a way for a firm to differentiate its products from competitors
logo
__: the visual branding element that stands for corporate names or trademarks
personality
when harley davidson has ads to reinforce that the brand is masculine, rugged, it is building brand __
brand equity
the value of a brand translates into __
perceived value
from the customer’s perspective, the relationship between a product’s or service’s benefits and its cost is called __
brand equity
an advantage of building strong __ is that consumers are willing to pay a higher price for the product
brand equity
steps in building __:
1 develop positive brand awareness
2 establish a brand’s meaning in consumer’s mind
3 elicit the proper consumer responses to a brand’s ID/meaning
4 create a consumer-brand connection
meaning
both the functional, performance related dimension and the abstract, imagery related dimension are used to help a consumer form a __ for the brand in her mind
brand licensing
__: a contractual arrangement between firms, where one firm alllows another to use its brand name, logo, symbols, and/or characters in exchange for a negotiated fee
toys
brand licensing is most common for __
family, corporate
multiproduct branding is also called __ branding or __ branding
extension
advantage of a product line __ is that the company can spend less money to develop brand awareness
product line extension
a __ is the practice of using a current brand name to enter a new market segment in its product class
subbrands
some firms use __ for each of their products, in addition to the family brand, to distinguish different parts of the product line
brand dilution
___: when a brand extension adversely affects consumer perceptions abt the core brand
cobranding
__ can benefit firms by allowing a brand to enter a new product class, capitalizing on an existing well known quality brand in it
multibranding
disadvantages of __
-ads and promotion are typically more expensive
-awareness will have to be build from scratch
multibranding
___ strategy: when a firm uses a distinct name for each of its products
fighting
chief purpose of a __ brand is to counteract competition
mixed branding
__ strategy: when a firm markets products under its own name and that of a reseller bc each attracts different segments
communication, functional, perceptual
what are 3 benefits packaging and labeling provides a product?
functional
storage and protection of product are considered which kind of benefits added by packaging and labels?
perceptual
for firms competing in the global marketplace, “country of origin” ads on product is considered which kind of benefit added by packaging and labels?
warranty
__: a statement indicating the liability of the manufacturer in case of product deficiencies
limited coverage
__ (1 of 4 types of warranties): states the bounds of coverage and noncoverage
implied
__ (1 of 4 types of warranties): assign responsibility for deficiencies to the manufacturer
full
__ (1 of 4 types of warranties): no limits of coverage
express
__ (1 of 4 types of warranties): written statement of liability
price
__: the money or other consideration (including other products or services) exchanged for the ownership or use of a product
surcharges
consumers’ zeal for low prices combined with the ease of making price comparisons on the internet has resulted in many companies adding __ to their list prices
value
__: the relationship between a products benefits and the consumers costs
value-pricing
at mcdonalds, you can get several items together as a meal, for less than those items separately. this is an example of __
reference value
when a consumer is comparing the costs and benefits of sub items, he is developing a __
fixed costs + variable costs
total cost = ___
total revenue – total cost
profit = ___
objectives, constraints
marketing mngr considers pricing __ and __ to narrow the range of choices among the variety of pricing strategies
objectives
marketing mngrs may ID profit, market share, social responsibility, or survival as profit __
current profit maximization, target return
__ and __ are 2 strategies used by firms that are pursuing a profit pricing objective
maximizing current profit
which profit-oriented pricing objective is common bc the targets can be set and performance measured quickly?
target return
__ is when a company sets a profit goal of 20% for pretax ROI
increasing sales
a pricing objective of __ can have the disadvantage of leading to price cuts that reduce the revenues of other products in firm’s line
revenues
a firm w/ a sales objective will set prices at a level that generates more __
unit volume
the pricing objective based on the quantity of product sold by a firm is also called __
unit volume
pricing objective known as __ can be counterproductive if its achieved by drastic price cutting that drives down profit
profit, sales, market share, unit volume, survival, social responsibility
what are the 6 pricing objectives?
pricing constraints
__: factors that limit the range of prices a firm may set
costs
in long run, a firm’s __ set a floor under its price, allowing firm to survive
pure competition, monopolistic competition, oligopoly, pure monopoly
list the 4 types of competitive markets from most competitive to least
oligopolistic
when only a few firms dominate a market, its known as __ competition
demand curve
__: a graph representing quantity sold and price
negative-sloping
the shape of most typical demand curve is a __ curve
consumer taste, consumer income, price and availability of similar products
what are the 3 factors that influence the demand curve?
price
movement along a demand curve occurs bc of a change in __
selling conditions
shift in the demand curve is the result of a change in __
marginal revenue
__: the change in total revenue that results from producing and marketing one additional unit of a product
marginal revenue
the slope of the total revenue curve represents the __
total, sold
avg revenue = __ revenue / quantity __
price, sold
total revenue= unit __ * quantity __
negative
a good marketing mngr will never set prices in the zone where marginal revenue is __
price elasticity of demand
__: the % change in quantity demanded relative to a % change in price
increase
according to price elasticity, when the price of iphones drop, the demand is likely to __
elastic
when a 1% decrease in price produces more than a 1% increase in quanity sold, the product or service is __
marginal analysis
__: the continuing, concise trade off between incremental costs against incremental revenue
total cost, total revenue
break even analysis analyzes the relationship between which 2 at various levels of output?
break-even point
__ = fixed cost / (unit price – unit variable cost)
marginal cost
the slope of the total cost curve represents the __
demand-oriented
__ (1 of 4 pricing approaches) strategy:
factors underlying customer tastes and preferences are weighed most heavily
competition-orientated
__ (1 of 4 pricing approaches) strategy:
price setter stresses what “the market” is doing is determining a price
cost-orientated
__ (1 of 4 pricing approaches) strategy:
price is set by looking at the production and marketing costs, and then adding enough to cover direct expenses, overhead and profit
profit-orientated
__ (1 of 4 pricing approaches) strategy:
the price setter balances both revenues and costs to set a price
demand-orientated
penetration, price lining, and bundle pricing are all types of which pricing approach?
skimming pricing
in __, prices are lowered in a series of steps with the demand by those who really desire the product being satisfied at the highest prices
price lining
__: when a firm is selling a line of products and prices them at a number of different specific pricing points
odd-even
in __ pricing, an org sets a price a few dollars or cents under an even number (3.99)
cost-plus
__ pricing entails: adding total units cost and adding a fixed percentage or fee to arrive at a price
cost-plus
common forms of __ pricing:
percentage of cost
fixed fee