.

PRODUCT CONCEPTS

PRODUCTS AND SERVICES

Terms

1. Product – anything … offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need (see Exhibit 10.1 page 168)

a. Product item

b. Product Line

c. Product Mix

2. Service – Any activity or benefit … one party can offer another that is essentially intangible and does not result in the ownership of anything

3. Expanded Product – a product and all peripheral factors that contribute to a consumers satisfaction

Levels of Product and Services

1. Core

2. Actual

3. Augmented

Review #1

C. Classification of Goods (Product and Service)

1. Consumer Goods – based on purchase behavior

a. Convenience – items usually purchased frequently, immediately, and with a minimum of comparison and buying effort

1) Types: staples, impulse and emergency

2) Brand and price are secondary

3) Soap and fast-food

b. Shopping – items whose selection may entail visits to several stores and the expenditure of considerable time and effort on the part of the consumer

1) Heterogeneous ------------------------------------ Homogeneous

(Quality, style and suitability) (Price)

2) Strongest personal selling effort

3) Automobiles and fashion clothing

c. Specialty – items with unique characteristics and/or brand identification for which a significant group of buyers is willing to make a special effort to purchase

1) Brand is insisted upon

2) Rolex® watch and Bayer® Aspirin

d. Unsought – items the consumer either does not know about [transient] or does normally think about [regular]

1) Requires aggressive and skillful selling

2) Fuel cell and life-insurance

2. Industrial Goods

a. Capital items

b. Materials and parts

c. Supplies and services

Review #2 and #3

Push pause and take a Short Break

II. BRAND

Terms

1. Brand – identifier of a seller’s goods and services (a name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products)

2. Brand name – utterable brand

3. Brand mark – nonutterable brand

4. Brand equity – the positive differential effect (...) knowing the brand name has on customer response to the product or service

5. Trade mark – legally protected brand

a. Lanham Act (1946)

b. Protection - civil

c. Generic problem

6. Logo – company identifier

Levels of Brand Familiarity

1. Rejection

2. Non-recognition

3. Brand recognition

4. Brand preference

5. Brand insistence

Brand Development Considerations

1. Line Depth

2. Line Extension

3. Line Contraction

4. Brand Extension

5. Multibrands

6. New Brands

7. Product Mix Width

8. Brand Strategies

a. Generic vs. branded

b. Manufacturers’ brand vs. private brands

c. Individual brands vs. family brands

d. Cobranding

Review #4

III. PACKAGING

Package – something that contains and protects, promotes and facilitates the storage, use, and convenience of products

1. Adds to product through: convenience, attractiveness, economy and promotional appeal

2. Types: primary, secondary and tertiary

Fair Packaging and Labeling Act (1967) Review

1. Enforced by the FTC

2. Covers: items packaged, labeled but not packaged, unpackaged and unlabeled

3. Requires: product identity, name and place of business of responsible party, and net contents

Universal Product Code [UPC] – (1974)

1. Code format - ten digits with three extra

2. Distribution Bank

3. Technical system

4. Issues

Review #5

C-11

DEVELOPING AND MANAGING PRODUCTS

I. New Product

New

1. Standard marketing definition – makes the old product obsolete

2. Federal Trade Commission (FTC) “a product must be entirely new or changed in ‘functionally significant or substantial respect’ to be termed new”; “new” may be used for a maximum of six months.

New Product Development Process (see Exhibit 11.1 page 180)

1. New-product strategy

2. Idea Generation

3. Idea Screening

4. Business Analysis

5. Product Development

6. Test Marketing

7. Commercialization

8 New product

C. New Product Failure

1. Overall innovation success rate

2. Consumer products

3. Industrial products

4. Services

II. Product Perishability

A. All products will experience some deterioration in value

B. Deterioration comes from:

1. Advances in technology

2. Life-style and taste changes

3. Natural

Review #6

SECOND INTERMISSION Push pause and take a Short Break

III. Product Quality

A. Physical quality (durability, reliability, precision, ease of operation and repair, etc.)

B. Psychological Quality (prestige, image, etc.)

C. Level of Quality

1. Is the highest quality always best?

2. Multiple quality product lines

3. Planned obsolescence

IV. Adoption

A. Stages in the Adoption Process

1. Awareness

2. Interest

3. Evaluation

4. Trial

5. Adoption

B The Adoption Curve – E. M. Rogers (see Exhibit 11.4 page 192)

1. Innovators (2 ½ %) first to adopt

a. Guided by respect

b. Demographics: young, mobile, high socioeconomic status (class), and many outside contacts

c. Rely on factual information

d. Tend to be impersonal and scientific

2. Early Adopter (13 ½ %) opinion leaders

a. Guided by respect

b. Demographics: young, mobile, relatively high socioeconomic status and confined to local contacts

c. Creative

d. Greatest contact with salespeople for the product

3. Early Majority (34 %) first wave of mass market

a. Pragmatic and tend to be deliberate

b. Demographics: above average socioeconomic status and contact with early adopters

c. Most contact with the mass media

4. Late Majority (34 %) late mass market

5. Laggards (16 %) last to adopt

Review #7

V. Fashion

A. Terms

1. Style – a design characteristic

2. Fashion – prevailing or accepted style

3. Fad – intense, short-lived fashion cycle

B. Fashion Cycle

1. Distinctiveness stage

a. Customer seeking to be different from the majority

b. Willing to pay

2. Emulation stage

a. Customer seeking to copy fashion leaders

b. Not willing to pay as much

3. Economic emulation stage

a. Large customer segment accepts the fashion

b. Mass produced for low prices

VI. Product Life Cycle (PLC) - (see Exhibit 11.2 page 189)

A. Primary Stages of the PLC

Conditions Mix

1. INTRODUCTION

Expand the market strategy

a. Low level of sales a. Basic product

b. Few competitors b. High prices

c. Very high investment c. Irregular distribution

d. Losses or very low profit d. Extensive promotion for product

awareness

2. GROWTH

Market penetration strategy

a. Rapid growth in sales a. Improve product

b. New competitors b. Moderate prices

c. Investment high, but better return c. Intensive distribution

d. Typically reach peak profit margins d. Extensive promotion, seeking brand

(particularly for the innovator) preference

3. MATURITY

Maintain market share strategy

a. Slowed growth in sales a. Differentiated product

b. Intensified competition b. Low prices

c. Only moderate investment c. Intensive distribution

d. Moderate profit (because of price d. Moderate promotion, seeking brand

promotion and competition) loyalty

e. Demand becomes more elastic

4. DECLINE

Reduce costs strategy

a. Declining sales a. Limit production

b. Declining competition b. Raise prices

c. Declining investment c. Selective distribution

d. Declining profits (may still be good d. Low promotion directed at purchase

for a few) rationalization and basic awareness

B. Basic PLC Implications

1. Be aware of PLC stage

2. Be prepared to introduce new (improved) product between growth and maturity

3. Accordingly, maintain high profitability

Review #8

Online 351 Principles of Marketing MIDTERM EXAMINATION REVIEW A. LeBard

Familiarity with the following acronyms, concepts and subjects will aid Midterm Examination comprehension. In addition, carefully Podcast Notes and Exercised

1. Marketing Management Orientations/Concepts 2. Marketing and “ A Market ”

3. Economic Utilities 4. Societal Classification of Offerings

5. Product/Market Expansion Grid 6. Forms of International Trade

7. Trade Restrictions and Fostering Trade 8. Global Organizational Forms

9. Theory of Comparative Advantage 10. Demand

11. U.S. Marketing Laws 12. SBUs and Boston Consulting Group Grid

13. Segmentation Analysis 14. Demographics and Population Change

15. Social Class and Class Characteristics 16. NAICS

17. Forms of migration 18. Beliefs and Attitude

19. Forms of Income and Engel’s Law 20. Theories of Motivation

21. Motivation Theories 22. Organizational Buying Center Concept

23. Marketing Mix 24. Organizational Buying and Goods

25. Mission, Objectives, and Goals 26. Business Buying Situations

27. Segmentation dimensions and components 28. Packaging terms and levels

29. Segmentation Analysis 30. Demographics and Population Change

31. Targeting strategy/approach 32. New product terms and legal concepts

33. Position ladder and map 34. Adoption curve and process

35. Defining a market 36. PLC stages

37. Need for more and better information 38. Classification of Business goods

39. Marketing research problem definition step 40. Forms of marketing research

41. Primary and secondary data 42. MIS subsystems

43. Product terms 44. Brand terms

45. Classification of consumer goods 46. Levels of brand familiarity

47. Failure rate after commercialization 48 . Perishability

Review #1

Initial strategic and tactical changes to the levels of products and services should at which level?

1) Core

2) Actual

3) Augmented

4) All of the above

Review #2

In the first category of Consumer goods, brand and price are secondary to?

1) Actual product

2) Augmented product

3) Convenience

4) All of the above

Review #3

Successful salespeople have an average higher I.O. than the average U.S. physicist in which consumer goods category?

1) Convenience

2) Shopping

3) Specialty

4) Unsought

Review #4 followed by Intermission

Which of the following is best described as nonutterable?

1) Brand

2) Brand Name

3) Brand Mark

4) Logo

Review #5

In addition to something that contains and protects, promotes and facilitates the storage, use, and convenience of products, a package also adds value through which of the following?

1) Attractiveness

2) Convenience

3) Economy

4) Promotional Appeal

5) All of the above

Review #6

According to Federal Trade Commission, a product may only be considered new for?

1. Three months

2. Six months

3. One year

4. Two years

Intermission Two

Review #7

Which Adoption Curve segment includes the opinion leaders?

1. Innovators

2. Early Adopters

3. Early Majority

4. Late Majority

Review #8

According to Podcast and notes, which PLC stage recommends a raise of prices?

1. Introduction

2. Growth

3. Maturity

4. Decline

END