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107 Cards in this Set
- Front
- Back
Product
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anything offered to a market for consumption that satisfies a need, lots of attributes that satisfies consumers and is received in exchange for money
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consumer goods
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products purchased by the ultimate consumer
different types of products |
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different types of consumer goods
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convenience, shopping, specialty, unsought
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convenience product
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(consumer)- relatively inexpensive product that merits little shopping effort e.g. toothpaste, laundry detergent
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shopping product
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(consumer)- more expensive than convenience product, requiring more shopping effort e.g. fridge, clothes, furniture
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Specialty product
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(consumer)- extensive search effort; consumer reluctant to accept subsitute
e.g. car, speakers, watches, favorite restaurant |
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Unsought products
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(consumer)- product that the buyer does not actively seek
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Business goods
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products that assist directly or indirectly in providing products for resale
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Production products
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(business) items used in the manufacturing process that become part of the final product
e.g. ingredients for a recipe at a restaurant |
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Support products
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(business) Items used to assist in producing goods/services
e.c. paper clips, pencils, copiers |
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Product line
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a specific version of a product (e.g. tomato soup by campbells)
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product line
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a group of closely related product items (e.g. all the different campbells soups)
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Product mix
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all products an organization sells
e.g. Johnson and Johnson's products |
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3 levels of a product
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1. (inside) core benefit
2. (middle level) basic product- tangible product features 3. (outside level) augmented product- service, warranty, ancillary products, accessories, packaging |
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Product life cycle
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the stages a product goes through in the market place:
introduction growth maturity decline |
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4 premises of the product life cycle
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1. products have limited life
2. product sales pass through distinct stages, each with different marketing implications 3. profits from a product vary at different stages in the life cycle 4. products require different strategies at different life-cycle stages |
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New Product development process
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Idea generation, idea screening, concept testing, marketing strategy, business analysis, product development, market testing ---- commercialization
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Idea generation
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customers, suppliers, employees, R&D, competition
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idea screening
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"missing the boat"- type 1 error: rejecting H0 when H0 is true
"sinking the ship"- type 2 error: not rejecting H0 when H0 is false |
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concept testing
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test the concept with potential customers
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marketing strategy
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target market + marketing mix
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business analysis
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forecasting, profitability analysis, legal
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product development
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create product/prototype
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market testing
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place the products in several test markets, measure performance, project results to the larger market, (2-6 cities, choose cities that are microcosms of larger market, long enough test to observe repeat purchase rates)
Action: high trial, high repurchase=go high trial and low repurchase=? low trial, high repurchase= ? low trial and low repurchase=stop |
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Where does the process "break down" most often in new product development?
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concept testing
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Product development
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IDEO??
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Brand
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name, term, symbol, design, or combo that identifies a seller's products and differentiates them from competitors' products
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The only way to market is to....?
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own market-dominant brands
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Advantage of branding
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1. allows marketers to distinguish their products from all others
2. helps consumers identify products they wish to buy again and avoid those they do not 3. it is useful when introducing new products |
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What should brands do?
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1. resonate with customers
2. differentiate from competitors 3. motivate employees |
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Developing Brand equity (not in notes?)
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1. brand awareness
2. brand image 3. brand loyalty 4. brand equity |
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Types of brands
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functional, image, experiential
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Functional brands
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1. satisfy functional needs (e.g. washing clothes, relieving pain)
2. differentiates from competitors by offering superior performance or superior economy 3. connect with consumers by helping them achieve basic goals related to physical needs (e.g. safety, food) |
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Image brands
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1. create value by projecting a distinct/admired image
2. differentiate from competitors by offering unique set of associations or images 3. connects with consumers through emotional images, symbols, and associations |
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Experiential brands
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1. focus on how consumers feel when interacting with the brand
2. products/environments/services are combined to create temporary multisensory encounters with the brand 3. connect with consumers through experiences that are co-created by the brand and the consumer at the time of consumption |
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3 components of brand positioning
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1. competitive frames of reference
2. points of difference 3. points of parity |
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competitive frames of reference (component of brand positioning)
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- nature of competition
- target market |
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points of difference (component of brand positioning)
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- desirable to consumer
- deliverable by the brand - differentiating from competitors |
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points of parity (component of brand positioning)
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- negate competitor point of difference
- demonstrate category credentials |
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the 3 d's of brand positioning
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1. desirable? (consumer's perspective)
-personally relevant -believable and credible 2. deliverable? (firm perspective) -feasible -profitable -preemptive, defensible, and difficult to attack 3. Differentiating? (competitive perspective) -distinctive and superior |
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3 Brand Valuation Approaches
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1. market-based
2. income-based 3. formulary |
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Market Based brand valuation approach
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valuation is based on an estimation of the amount for which a brand can be sold
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Income-Based brand valuation approach
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Valuation is based on the future net revenues directly attributable to the brand, discounted to the present value using an appropriate discount rate
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Formulary Brand Valuation Approach
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valuation is based on multiple criteria such as: profitability, leadership, stability, market, internationality, trend, support, protection
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Examples of Promotion
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advertising, personal selling, sales promotion, publicity
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Why do companies promote?
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1. increase demand (on graph, shift to the right)
2. make demand more inelastic, consumers become less price sensitive |
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Definition of Advertising (in relation to promotion mix)
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Paid placement of announcements and persuasive messages to inform and/or persuade
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Sales Promotion Definition ((in relation to promotion mix)
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short term incentives to encourage trial or increase purchase
(e.g. coupons, rebates, samples, contests, premiums, price packs) |
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personal selling (in relation to promotion mix)
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personal contact b/w a rep of the firm and customer with the intention of making a sell
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Publicity (in relation to promotion mix)
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unpaid placement of news or media presentations with the deliberate attempt to manage the public's perception
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Relative importance of promotion mix for B2C/ consumer goods
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ads, sales promotion, personal selling, PR
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Relative importance of promotion mix for B2B/ industrial goods
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personal selling, sales promotions, ads, PR
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Push strategy
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Producer --> (marketing activities) --> intermediaries --> (marketing activities) --> end users
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Pull strategy
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end users --> intermediaries --> producer --> (marketing activities) --> back to end users
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3 objectives of advertising
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1. cognitive (build awareness) - Attention, interest
2. affect (gain interest, liking) - desire 3. behavioral (stimulate action) - action |
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Judging good ads from bad ads
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1. make PRODUCT obvious
2. make the ADVERTISER obvious 3. make the BENEFIT obvious |
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Benefits of using intermediaries in distribution
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1. breaking bulk- buy in quantities you want
2. providing assortment- find a variety of products 3. holding inventory- get the product when you want it 4. offering services- promotion, delivery, warranty 5. market efficiency- buy from a few sellers instead of many |
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Two main elements of a channel?
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1. Marketing Arm
2. Logistics Arm |
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Marketing Arm of a Distribution Chanel (primary concern)
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-manufactures
- wholesalers - retailers - dealers - customers |
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Logistics Arm of a Distribution Chanel
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- transportation
- warehousing |
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The best distribution channel system should achieve ideal......?
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Ideal Market Exposure
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How do marketing channels add value?
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1. product benefit
2. service benefit 3. image benefit |
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Market Channel Performance
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1. customer reach (volume)
2. Operating efficiency (cost to serve) 3. service quality (retention) |
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Customer Reach (market channel Performance)
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- direct marketing channel
- e-marketing channel |
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Operating Efficiency
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Direct Channel
Indirect Channel |
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Direct Channel of Operating Efficiency
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-produces higher margins
-mut bear the cost of channel management -must bear all marketing costs |
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Number 14 answer
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D
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Indirect Channel of Operating Efficiency
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- produces lower margins
- provides lower channel management costs - provides lower marketing costs |
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Direct Channel of Service Quality
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- manufacturer controls service quality
- manufacturer interfaces with customer at all contact points |
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Indirect Channel of Service Quality
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- Removes the manufacturer from the end-user customer
- manufacturer is dependent on channel partners to deliver the desired level of customer service |
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B2C Marketing Channels
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Manufacturer to direct channel systems to customers
manufacturer to mixed channel systems to customers or to channel itermediaries then to customers Manufacturers to indirect channel systems then to channel intermediaries then to customers |
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Direct Channel Systems (B2C)
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direct sales, internet sales, direct marketing, telemarketing, reps/agents
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indirect channel systems (B2C)
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Reps/AGents, Retailers, Wholesalers
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Direct Channel Systems (B2B)
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direct sales, internet sales, direct marketing, telemarketing, reps/agents
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Indirect Channel Systems (B2B)
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Wholesalers businesses, industrial dealers, reps/agents, VARs OEMs
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Channel Behavior
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- all channel members must have a common interest in selling the product
- channel conflict arrises when one channel member prevents other channel member to achieve goal - primary cause of conflict is the distribution of profits amng channel members |
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a primary cause of conflict in channel behavior is the...
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the distribution of profits among channel members
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Retailing Mix
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Place, Product, Pricing, Promotion
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Place (in context of retailing mix)
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location, access, convenience
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Product (in context of retailing mix)
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variety, assortment, service, image
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Pricing (in context of retailing mix)
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prices, margins, customer value
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Promotion (in context of retailing mix)
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Advertising, merchandising, atmospherics
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Customer Utilities (in context of retailing mix)
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Time- making the product available at a convenient time
Place- making product available at a convenient place Form- making product in the form customers want Possession - transfer of product ownership |
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Retail atmospherics (in context of retailing mix)
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The conscious design of space and its various dimensions to evoke certain effects in buyers (e.g. layout, colors, sounds, signage, the feel of the place0
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Signage(in context of retailing mix)
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- price influences sales more than signs
- if product is on sale, pricing signage increases sales over no signs - benefit signs dominate at both regular and sale prices |
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Colors in context of retailing mix
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warm colors- people are drawn to warm colors, place by entrances and for impulse buys
cool colors- more pleasant (involved in decision making) |
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Music
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up tempo- increases traffic flow
slower music- reduces flow and increases browsing and sales by 32% |
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AIDA model
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Attention, Interest, Desire, Action
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Ikea v. RC Willey? (Test ?)
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Ikea is very cheap?
pod- build yourself, pop- good furniture |
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Kraft (test ?)
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ChildreN? aware of certaing products?
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Union Pacific??
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Test question??
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Consumer Utilities
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time, place, form, possession
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Selective distribution
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select a few retail outlets in a specific area such as nordstrom
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exclusive distribution
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e.g. only sell porsche to porsche dealerships
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Channels of distribution
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the more steps you have in between, the higher the price
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The more you promote the higher the...
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brand image, quality perception people have in their mind, so they are willing to pay for it.
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Which strategy should I sue to talk to consumers?
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Introductory phase, so skimming or penetration
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Maturity stage
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modify market, modify product
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growth stage
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add features, improve quality
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decline stage
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maintain, harvest, drop
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Benefits-Costs=?
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Value to customer
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Total benefits=?
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product benefit+ service benefit + image benefit
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Total costs= ?
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non price costs + Price
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Push strategy
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manufacturer pushes product on you (incentives)
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Pull strategy
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Customer comes to you (have what they want)
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POD
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Points of Difference
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POP
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Points of Parity
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