Principles of Marketing: final exam (spring 2017)

Define product.
A good, service, or idea received in an exchange. Either tangible or intangible.
Define consumer products.
Products purchased to satisfy personal or family needs.
Define business products.
Products bought to use in an organization’s operations.
What are the classifications of consumer products?
Convenience. Shopping. Specialty. Unsought.
Define convenience products.
Relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort.
What are the characteristics of a convenience product?
Marketed through many retail outlets. Relatively low per-unit gross margins. Little promotional effort at retail level. Packaging is an important marketing mix element.
Define shopping products.
Items for which buyers are willing to expend considerable effort in planning and making purchases.
What are the characteristics of a shopping product?
Expected to last a long time. Less frequently purchased. Don’t have brand loyalty appeal. Require fewer retail outlets. Inventory turnover is lower. Gross margins are higher. More amenable to personal selling.
Define specialty products.
Items with unique characteristics that buyers are willing to expend considerable effort to obtain.
What are the characteristics of a specialty product?
Pre-selected by the consumer. Have no close substitutes or alternatives. Available in a limited number of retail outlets. Purchased infrequently and represent a significant and expensive investment. High gross margins. Low inventory turnover.
Define unsought products.
Products purchased to solve a sudden problem, products of which the customers are unaware, and products that people do not necessarily think about buying.
What are the characteristics of unsought products?
Speed and problem resolution of the utmost importance. Price and other features not considered. No consideration of substitutes or alternatives. Purchased infrequently.
Define product item.
A specific version of a product.
Define product line.
A group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations.
Define product mix.
The total group of products that an organization makes available to customers.
Define width of product mix.
Number of product lines a company offers.
Define depth of product mix.
Average number of different products in each product line.
Define product life cycle.
The progression of a product through four stages: introduction, growth, maturity, and decline.
What happens during the introduction stage of the product life cycle?
Product is introduced to the marketplace.
What are the characteristics of the introduction stage of the product life cycle?
Sales start at 0 and profits are negative.
What happens during the growth stage of the product life cycle?
Sales rise rapidly and profits reach a peak, then start to decline.
What are the characteristics of the growth stage of the product life cycle?
More competitors. Product pricing is aggressive. Brand loyalty is important. Gaps in market coverage are filled. Production efficiencies lower costs.
What happens during the maturity stage of the product life cycle?
Sales curve peak and starts to decline and profits continue to fall.
What are the characteristics of the maturity stage of the product life cycle?
Intense competition. Emphasis on improvements and differences in competitors’ products. Weaker competitors exit market. Advertising and dealer-oriented promotions dominate. Distribution sometimes expands globally.
What happens during the decline stage of the product life cycle?
Sales fall rapidly.
What are the characteristics of the decline stage of the product life cycle?
Pruning items from the product line. Cutting promotion expenditures. Eliminating marginal distributors. Planning to phase out product.
What are the steps of the product adoption process?
Awareness. Interest. Evaluation. Trial. Adoption.
What are the categories of product adopters?
Innovators. Early adopters. Early majority. Late majority. Laggards.
Define innovators of the product adoption process.
First adopters of new products.
Define early adopters of the product adoption process.
Careful choosers of new products.
Define early majority of the product adoption process.
Those adopting new products just before the average person.
Define late majority of the product adoption process.
Skeptics who adopt new products when they feel it is necessary.
Define laggards of the product adoption process.
The last adopters, who distrust new products.
Define line extension.
Development of a product that is closely related to existing products in the line but meets different customer needs.
What are characteristics of a line extension?
Less expensive, low-risk alternative. May focus on the same or a new segment. Can be used to counter competing products.
Define product modifications.
A change in one or more characteristics of the product and the elimination of the original product from the product line.
What are characteristics of product modifications?
Product must be modifiable. Customer must be able to perceive modification has been made. Modified product more closely satisfies customers’ needs.
What are the types of product modifications?
Quality. Functional. Aesthetic.
Define quality modification.
Changes in material or production processes related to a product’s dependability and durability.
Define functional modification.
Changes affecting a product’s versatility, effectiveness, convenience, or safety. Usually requiring a redesign of the product.
Define aesthetic modification.
Changes made to the sensory appeal of a product, such as altering taste, texture, sound, smell, or appearance.
Define product differentiation.
Creating and designing products so that customers perceive them as different from competing products.
What are some ways to differentiate your product?
Quality. Design. Support services. Branding.
Define product quality.
The overall characteristics of a product that allow it to perform as expected in satisfying customer needs.
Define product design.
How a product is conceived, planned, and produced. Good design provides strong advantage.
Define styling.
Physical appearance of a product.
Define product features.
Specific design characteristics that allow a product to perform certain tasks.
Define product support services.
Human or mechanical efforts or activities that add value to a product. A competitive advantage when all other product features are equally matched by competitors.
Define product positioning.
Creating and maintaining a certain concept of a product in customers’ minds.
Define repositioning a product.
Adjusting a product’s present position can strengthen/increase its market share and profitability.
Define product deletion.
The process of eliminating a product from the product mix.
Define brand.
An identifying name, term, design, or symbol. One item, family of items, or all items of a seller.
Define brand name.
The part of a brand that can be spoken. Words, letters, numbers.
Define brand mark.
The part of a brand not made up of words. Symbols or designs.
Define brand loyalty.
A customer’s favorable attitude toward a specific brand.
What are the different levels of brand loyalty?
Brand recognition. Brand preference. Brand insistence.
Define brand recognition.
A customer’s awareness that a brand exists and is an alternative purchase.
Define brand preference.
A customer prefers one brand over competitive offerings.
Define brand insistence.
A customer strongly prefers a specific brand and will accept no substitute.
Define co-branding.
Using two+ brands on one product to capitalize on the brand equity (customer confidence/trust) of multiple brands.
Define brand licensing.
A company permits another organization to use its brand on other products for a licensing fee. More royalty fee based.
What are the four components of brand equity?
Perceived brand quality. Brand name awareness. Brand loyalty. Brand associations.
What are the three types of brand policies?
Individual. Family. Brand-extension.
Define individual brand policy.
Naming each product differently. Avoids stigmatizing all products due to a failed one.
Define family brand policy.
Brand all of a firm’s products with the same name. Promotion of one item promotes them all.
Define brand-extension brand policy.
Using an existing brand name for an improved or new product. Provides support for new products through established brand name and image.
What are the two types of brand-extension branding?
Co-branding. Brand licensing.
What are the types of brands?
Manufacturer. Private distributor. Generic.
Define manufacturer brands.
Brands initiated by producers.
Define private distributor brands.
Brands initiated and owned by resellers. Dealer brands, private brands, store brands.
Define generic brands.
Brands indicating only the product category.
What is the value of branding for consumers?
Helps speed purchases by identifying specific preferred products. Provides a form of self-expression and status. Evaluates product quality to reduce the risk of purchase.
What is the value of branding for marketers?
Identifies and differentiates a firm’s products from competing products. Helps in introduction of new products. Facilitates promotion of all same-brand products. Fosters the development of brand loyalty. Can create valuable intangible assets.