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119 Cards in this Set
- Front
- Back
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Actual Product
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physical product with features and brand name and packaging ex… iPhone
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Augmented Product
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additional services and benefits ex… calling and data plans
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Convenience Product |
purchased frequently, with minimum buying effort/look at competition, low priced ex… laundry detergent, candy |
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Shopping Product |
purchased less frequently, but focus on suitability, quality, price, and style. Much effort spent gathering information and comparing ex… furniture |
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Speciality Products |
Unique characteristics or brand identification a significant amount of buyers are willing to make a special purchase for. ex… photo equipment |
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Unsought Products |
customer does not know about, or does not generally think about buying. ex… blood donation, life insurance, preplanned funeral services |
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Industrial Products |
purchased for further processing or conducting in a business Materials and parts, capital items, manufactured materials and parts |
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Why do new products fail? |
Lack of differentiation Diffusion of Innovation - most people wait until idea is proven before purchase. Technology Adoption Life Cycle - people don't take leap from being “early adopters” to “early majority” there is a “chasm”/significant gap |
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Product Life Cycle |
Product Development Product Introduction - Growth Stage - Sustain this as long as possible. (honeymoon) Maturity Stage - sales slow down. Must try and prevent from declining. Decline Stage - sometimes marketers decide to stay in decline because it means other competitors back out leaving little/no competition |
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Product Line Stretching |
lengthens beyond current range. can stretch upward or downward. |
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Product line filling |
adding more items within present range of line |
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Service Marketing |
Intangibility - service cant be seen, tasted, felt, heard, smelled. Can have uncertainty. Inseparability - can not be separated from providers, either people or machines. Variability - Quality depends on who provides them and how, when and where Perishability - Service can not be store for later sale or use. |
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The Service Profit Chain |
Links service firm profits with employee and customer satisfaction Internal Service Quality - Good working environment Satisfied Service Employees - More productive employees Greater Service Value - Better, more effective service to customers Satisfied Customers - Loyal customers repeat purchases and refer to other Profits - More customers lead to growth and profits |
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Brand Personality |
sum of all the attributes of brand and emotion it inspires in minds of customers. Created strategically and deliberately by marketers. |
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Brand Equity |
dollar amount attributed to value of brand based on all the intangible qualities that create that value |
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Line Extensions |
company extends existing brand names to new forms, colours, sizes, ingredients, or flavours of existing product category. (multigrain cheerios) |
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Brand Extensions |
extend a current brand name to new or modified product in a new category. (rits crackers made into mini sandwiches) gives product instant recognition and faster acceptance. Saves advertising costs. |
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Mulit Brands |
strategy where same manufacturer makes different brands in given product category. (ex.. Whirlpool, but also Maytag, KitchenAid) |
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New Brands |
when develops a new product or product line (ex.. Sion from Toyota) |
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Touchpoints |
advertising, personal experience with brand, anything that brings a customer into contact with a brand. |
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Brand Ambassadors |
person who acts as spokesperson for brand |
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Brand advocates |
don't get paid |
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Customer Value-Based Pricing |
sets price based on buyers’ perceptions of value rather than on the seller’s cost. Customer asses customer needs and values. Sets target based on customer perception of value. Price set to match customer perceived value. |
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Cost Based Pricing |
Product driven. Company adds costs of producing product together, and sets a price that covers the costs plus a target profit. Then must convince customers it is worth the price. |
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Good Value Pricing |
offering just the right combination of quality and good service at a fair price. ex.. McDonald’s value menu. Retailer with pricing strategy that caters to that need is likely to be successful. “everyday low pricing” EDLP |
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Value-Adding Pricing
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adding amenities and charging more rather than cutting services to maintain lower prices. ex… movie theatre.
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High/low pricing
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Contrary to EDLP, having high prices but frequent low price sales |
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Competition Based Pricing |
setting prices based on competitors strategies, costs, prices, and market offerings. How do customers value competitors product? If lower than yours, you can charge higher price. If higher than yours, forced to charge lower price or change customer perceptions to justify higher price. |
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Target Costing |
Pricing that starts with an ideal setting price, and then targets costs that will ensure that the price is met. |
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Pure competition |
many buyers and sellers. No single buyer or seller has much effect on market. |
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Monopolistic |
Many buyers and sellers trade over a range of prices rather than single market price. Sellers try and develop differentiated offers for different customer segments. |
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Oligopolistic |
few sellers highly sensitive to each others pricing. Each seller has to be alert and responsive to competitions pricing. |
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Pure Monopoly |
Market consists of one seller. (ICBC) |
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Market-Skimming Pricing |
setting a high initial price, then skim the prices down layer by layer. ex… apple phones extremely expensive at first because to first buyers, price is no issue. As product is on market longer, becomes cheaper inviting other segments. |
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Market-Penetration Pricing |
setting a low initial price to penetrate market quickly and deeply (large number of buyers, win large market share) High sales means companies can cut prices even further.To keep out competition, low price positioning must be sustainable. |
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Product Line Pricing |
setting prices across an entire product line. Management must decide on the price steps to set between various products on a line. |
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Optional-Product Pricing |
Main product is sold at low margin/near cost, and marketers focus on selling extras and upgrades. ex… new car offers bluetooth and GPS |
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Captive-Product Pricing |
Cannot be used alone, must be used with main product. ex…. razor blades, ink cartridges. |
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By-Product Pricing |
Pricing low value by-products to get rid of them |
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Product Bundle Pricing |
Offer several of products together at a reduced price. ex…. “combo” |
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Discount and Allowance Pricing |
Reducing prices to reward customer responses such as paying early or promoting the product. |
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Segmented Pricing |
Adjusting prices to allow for differences in customers, products, or locations. |
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Customer Segmented Pricing |
ex… museum price difference for seniors and children. |
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Product Form Pricing |
different versions priced differently. ex… economy flight vs. business flight. |
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Location-Based Pricing |
charging different prices at different locations even though cost is the same. ex… hockey tickets |
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Time-Based Pricing |
price varies by season, time of day, hour.z
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Psychological Pricing |
Many customers use price to judge quality. |
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Promotional Pricing |
Companies temporarily pricing things below list price to create excitement and urgency. |
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Geographical Pricing |
setting difference prices for people located in different parts of country or world. |
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Initialing Price Cuts |
excess capacity, failing demand. Slashing prices to boost sale. |
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Initialing Price Increases |
If possible, companies should try to cut costs rather than raise pricing. If raising prices, might make customers angry and accuse of being price gouger. |
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Retailers |
one of the most important and visible channel partner |
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Wholesalers |
selling goods and services to those buying for resale or business use. Buy from producers, and sell to retailers, business customers. |
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Drop Shippers |
intermediary takes order from customers and passes to manufacturer or wholesaler which then ships item immediately to customer. (considered wholesalers) |
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Rack Jobbers |
buy merchandise and set up a “rack” where merchandise os sold to customers
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Brokers |
differ from wholesalers in 2 ways: do not take title to goods, and perform only a few functions. Brings buyer and seller together and assists in negotiation |
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Agents |
Has permanent relationship representing one party. ex. Real estate agent |
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Vertical Marketing System |
Producers, wholesalers, and retailers acting in unified system. Must all cooperate. |
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Corporate VMS |
under single ownership |
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Administered VMS |
independent firms at different levels of production that act together under a contract |
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Franchise Organization |
links several stages in the production and distribution process and controls operations from a head office. |
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Horizontal Marketing System |
two or more companies that operate at same channel level join together to follow a new marketing opportunity. ex… Tim Hortons in gas stations |
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Vertical conflict |
conflict between different levels of same channel … ex.. KFC not agreeing on advertising grilled chicken oppose to original crispy
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Horizontal conflict |
conflict between firms that perform same function. ex… One Toyota dealer selling cheaper “stealing” from other location |
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Disintermediation |
when established intermediary becomes useless and is cut out of channel. New term with introduction of internet… ex… Travelocity making travel agents no longer necessary, or Netflix kicking out Blockbuster |
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Intensive Distribution |
stocking product in as many outlets as possible. Often impulse items, marketing strategy is to make them available to customers whenever possible (convenience stores) |
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Selective Distribution
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Marketer selects a set of retailers that specialize in their product category and price range |
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Exclusive Distribution |
marketer gives right to distribute its product to only one retailer or one retailer in geographic territory. |
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Product Assortment |
should differentiate themselves while still targeting shoppers expectations. ex.. La Senza offering lingerie, Addition Elle having plus size |
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Service Mix |
includes inviting customers to ask questions or consulting representatives via phone, in person, or internet. |
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Store’s Atmosphere |
want to create a unique store experience that suites the target market and makes customers want to buy. |
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Pricing Decisions |
Must fit target market, positioning, product, and services into factor. Usually offer either high markups and low volume, or low markups and high volume. |
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Sales Promotion |
Short term incentives to encourage the purchase or sale of a product or service (discounts, coupons, demos) attract customer attention and incentive to buy. Short lived, not as effective as advertising or personal selling |
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Personal Selling |
Personal customer interactions by the firms sales force for the purpose of making sales and building customer relationships (sales presentations, trade shows) most effective in building up buyers’ preference, convictions, and actions. Allows customer relationships and friendships. Buyer usually feels greater need to listen and respond. Comes at a cost, most expensive tool. |
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Public Relations |
Building relations with company’s various publics by obtaining favourable publicity, building corporate image. (press releases, events, webpages) very believable. Can reach many people who avoid sales people and advertisements ( see as “News” rather than sales directed |
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Integrated Marketing Communications |
company carefully integrates blend of promotion tools to deliver clear compelling message about brand. |
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Push Strategy |
pushing product through marketing channels to final customer. Producer promotes to channel members, which in tern promote to final customers. |
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Pull Strategy |
Producer directs marketing strategies to final customers to induce them to buy the product that creates a vacuum that pulls the product through the channel. (will demand product from retailers, which will make retailers demand from producer) |
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Setting Advertising Objectives |
Informational Persuasive Reminder |
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Setting the Advertising Budget |
Affordable Method - setting promotion budget at levels they think company can afford. Ignores the effect of promotion on sales because uses only remaining money for advertising even if it is necessary. Percentage of Sales Method - setting budget on certain percentage of current or forecasted sales. Competitive Parity Method - setting budgets to match competitors. Objective and Task Method - most logical. set budget based on what company wants to accomplish with promotion. define specific objectives, determine tasks needed to achieve these, and estimate costs. |
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Developing Advertising Strategy |
Creating advertising message and selecting advertising media. Madison and Vine - represents merging of advertising and entertainment in effort to break through clutter and create more engaging messages for customers |
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4 Major Steps in Advertising Media |
1) Determining reach, frequency, impact, and engagement 2) Choosing among major media types 3) Selecting specific media vehicles 4) Choosing media timing |
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Territorial sales force structure |
Each sales person is assigned a geographical region and sells full line of company products to all customers in that area. |
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Product sales force structure |
salespeople specialize in only portion of company’s products or lines. Usually used when numerous and complex products |
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Customer (or market) sales force structure |
sales people specialize in selling to only certain customers or industries |
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Outside sales force |
Salespeople who travel to call on customers in the field |
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Inside sales force |
Salespeople who conduct business from office/home via telephones, social media, ect |
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downfalls of team selling |
sales people may not trust each other as it is a competition, confusing from customers being overwhelmed, and evaluating individual contributions to team efforts can be difficult |
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The best sales people possess 4 key talents |
Intrinsic motivation Disciplined work style Ability to close a sale Ability to build relationships with customers |
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The Personal Selling Process |
Prospecting and Qualifying- identifying qualified or potential customers. Pre-approachsales person needs to know as much as it can about organization and its buyers. Approach Get relationship off to a good start.Listening to customer is crucial Presentation and Demonstration tells “value story” to buyer showing how offer solves customer problem. Handing ObjectionsSales person takes positive approach, and take objections as opportunities to provide more information and then turn those into reasoning for buying Closing need to recognize signals from buyers.Follow UpNecessary to ensure customer satisfaction and repeated business |
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Customer Promotions |
samples, coupons, refunds, advertising specialties, point of purchase promotions ect. |
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Trade Promotions |
sales promotions to get resellers to carry a brand, give it shelf space, and promote in advertising. |
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Business Promotions |
Sales promotions used to generate business leads, stimulate purchases, reward customers, and motivate salespeople. |
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e-tailer |
selling directly to final customer using internet ex.. Amazon/expedia |
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Multichannel marketing |
marketing through stores as well as other channels (digital, online, social media, mobile channels) ex.. Staples |
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Marketing websites |
interacts with customers and tries to make inquiries turn into sales |
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Branded community websites |
dont try to sell anything at all … meant to engage customers and create customer community around a brand. ex…ESPN |
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Viral Marketing |
so infections customers will seek it our or pass it along to friends |
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Advantages of Direct & Digital |
targeted and personal, marketers can create tailor made brand content to individuals.
interactive in starting customer conversation and participation |
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Challenges of Direct & Digital |
Most companies still trying to figure out how to use effectively. What can seem harmless social campaign can easily backfire if taken wrong way. User controlled, need to earn right to be in customers lives |
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Global Firm |
A firm that by operating in more than one country gains R&D, production, marketing, and financial advantages that domestic partners don’t get. ex… elevator company located in USA, gets door parts in France, Spain, Germany, and manufactured in Japan, China, ect. |
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Major International Market Decisions 1) Looking at the Global Marketing Environment |
Canadian companies must understand international trade system and that government may charge tariffs or taxes to force favourable trade from other nations 2 factors reflect country’s attractiveness - Industrial structure, income distribution May set quotas (limits on foreign imports) or exchange controls (limit exchange & rate) |
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Major International Market Decisions 2) Deciding Whether to go Global |
Domestically is easier and safer Reasons why company might go international: Competitors attacking company’s home market by offering better product/price Customers might be expandingInternational markets provide better opportunities for growthex… coca cola expanding internationally due to decline in sales in USA |
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Major International Market Decisions 3) Deciding Which Markets to Enter |
First define international marketing objectives and policies What types of counties? Depends on product, population, income, political climate |
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Major International Market Decisions 4) Deciding How to Enter the Market |
Exporting Joint Venturing Direct Investment |
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Major International Market Decisions 5)Deciding on the Global Marketing Program |
Most marketers adapt products to fit consumers desires in country“think globally, act locally” , find a middle ground!! |
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Major International Market Decisions 6) Deciding on Global Marketing Organization |
Organize an export department, create an international division, and finally become a global organization. |
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Exporting |
ntering foreign markets by selling goods produced in the company’s home country, often with little modification Typically start with indirect exporting.. firm doesn't require an overseas marketing organization, brings in international intermediaries -less investment, less risk |
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Joint Venturing |
Entering foreign marketing by joining with foreign companies to produce or market a product or service. |
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Licensing |
developing agreement with a licensee in foreign market. Little risk. Licensee pays royalty to use company trademark, patent, ect. |
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Contract Manufacturing |
contract with foreign market to produce product or provide service. Decreased control, loss of potential profits |
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Management Contracting |
supplying management know-how to foreign company that supplies capital, domestic firm exports management services rather than product. Low risk, yields income from beginning. |
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Joint Ownership |
create local business in foreign market, who share ownership/control. Partners may disagree over investments. |
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Direct Investment
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Entering foreign market by developing foreign based assembly or manufacturing facilities.
Biggest Involvement. If having experience, many advantages. |
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Standardized Global Marketing |
same marketing mix and strategies worldwideMore brand power, reduced cost from economies of scale. |
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Adapted Global Marketing |
producer adjusts the marketing strategy and mix elements to each target market… more cost but hopefully more market share & return |
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Straight Product Extension |
no changes to the product. “take product and find customers for it” no additional costs, but costly in long run if product fails to satisfy
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Product Adaption |
changing product for customer wants…ex oreo wafer |
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Communication Adaptions |
fully adapting advertising messages to local markets |
