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133 Cards in this Set

  • Front
  • Back
Product
offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.
Service
Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the owner ship of anything.
Pure Tangible good
a company’s market offering. Ex: soap, toothpaste, salt- no services accompany the product.
Levels of Products and Services
1) Core Customer- “what is the buyer really buying” (benefits) 2) Actual Product (features, brand name, design) 3) Augmented Product (warranty, websites, instructions, technical support
Product and Service Classifications
1) Consumer Products 2) Industrial Products (both include other marketable entities such as experiences, organizations, persons, places, and ideas.
Consumer Products
- bought by final consumers for personal consumption - includes convenience products, shopping products, specialty products, and unsought products.
Convenience Product
- products that customers usually buy, with a minimum comparison and buying effort. Ex: laundry detergent, candy, magazines, and fast food. – Usually low priced, many locations, and readily available when consumers need them.
Shopping Products
- less purchased viewed carefully on suitability, quality, price, and style. –more time and effort is spent by consumer. Ex: Furniture, clothing, used cars, major appliances, and hotel and airline services. – Distributed through fewer outlet -deeper sales support
Specialty Products
- unique characteristics or brand identification for which a significant group of buyers is willing to make a personal purchase effort. Ex: Specific brands of cars, designer clothes, and services of financial or legal specialists. – not usually compared.
Unsought Products
does not know about or knows about but does not normally think of buying. – most major new innovations are unsought until customer becomes aware of them through advertising, marketing Ex: life insurance, preplanned funeral services, and blood donations.
Business Products
those purchased for further processing or for use in conducting a business.
Business Products and Services
1) Materials and Parts 2) Capital Items 3) Supplies and Services
Materials and Parts
raw materials and manufactured. Raw material consists of farm products (wheat, cotton, livestock, fruits, vegetables) and natural products (fish, lumber, crude petroleum, iron ore) - consist of component materials (iron, yarn, cement, wires)
component parts
( small motors, tires, castings.) -for business users. – Price and service: major factors.
Capital Items
aid in the buyer’s production or operations, including installations (factories, offices) and accessory equipment (generators, drill presses, hand tools, lift trucks, computers, fax machines, desks). – have a shorter life than installations and simply aid in production process.
Supplies and Services
include operating supplies (lubricants, coal, paper, pencils) and repair and maintenance items ( paint, nails, brooms). – convenience products of business, purchased with minimum effort or comparison. – business services include maintenance and repair services ( window cleaning, computer repair) and business advisory services (legal, management consulting, advertising). – supplied under contract.
Organization marketing
often carry out activities to “sell” the organization itself. Consists of activities undertaker to create, maintain, or change the attitudes and behavior of target consumers toward an organization.
Person, Place, Idea Marketing
to change attitude toward them.
Social marketing
the use of commercial marketing concepts and tools in programs designed to influence individual’s behavior to improve well-being and that of society. Ex: public health campaigns to reduce smoking, alcoholism, family planning, human rights, and racial equality.
Product and Service Decision Levels
1) Quality 2) Features 3) Style and Design
Individual Product and Service Decisions
1) Product Attributes 2) Branding 3) Packaging 4) Labelling 5) Product Support Services
Product and Service Attributes
1) Product Quality 2) Product Features 3) Product Style and Design
Product Quality
marketer’s major positioning tools. – creating customer value and satisfaction. Two dimensions- level and consistency
Total quality management
an approach in which all the company’s people are involved in constantly improving the quality of products, services, and business processes.
Level
in developing a product, the marketer must choose a quality level that will support the product’s positioning. – here product quality means performance quality.
Consistency
delivering a targeted level of performance.
Product Features
product with varying features. Ex: Ipod 16 gb, Ipod 32 gb
Style
appearance of a product. – does not make product perform better.
Design
more skin deep- it goes to the very heart of a product. – starts with understanding of customers needs. –involves shaping the customer’s product experience.
Branding
1) Brand 2) Packaging
Brand
name, term, sign, symbol, design or combination that identifies the maker or seller of a product or service. –customers attach meanings to brands, and develop brand relationships.
Packaging
designing and producing the container or wrapper for a product. – may be seller’s last and best chance to influence buyers to buy product.
Labelling
simple tags attached to products to complex graphics that are part of the package. – identifies product or brand. – describes several things about the product. – promote the brand. – affected in recent times by unit pricing on product, open dating (stating the expected shelf life), and nutritional labelling.
Product Support Service Steps
(Company) 1) Survey customers periodically to assess the value of current services and to obtain ideas for new ones. 2) Take steps to fix problems and add new services that will both delight customers and yield profits. 3) dealers with high customer ratings get rewards
Product Line
group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.
Product line length
the number of items in the product line. – if line is too short, items can be added. – if line is too long, items can be dropped.
Line filling
adding more items within the present range of the line. – reasons: reach for extra profits, satisfying dealers, using excess capacity
Line Stretching
when a company lengthens its product line beyond its current range. – can stretch downward, upward or both ways. – downward: for companies located at the upper end of the market (to plug a market hole that would attract a new competitor) (or add lower-end products). –upward: add prestige to current products. – or faster growth rate or higher margins at higher end. –both directions- upward and downward.
Product Mix
(all product lines from seller)
Width
(number of different product lines company carries. Ex: sony has tv’s, playstation, and semi conductors
Length
(total number of items company carries within it’s product lines. Ex: Camera and camcorder line- digital cameras, camcorders, photo printers, and accessories)
Depth
number of versions offered of each product in the line. Ex: Sony tv’s- tube, flat panel, rear projection
Consistency of product mix
how closely related the various product lines are in end use, in production requirements, distribution channels, or some other way.
Brand Equity
differential effect that knowing the brand name has on a customer response to product and its marketing. – differentiation (what makes the brand stand out) - relevance (how customer feel it meets their needs) . – knowledge (how much consumers know about the brand). Esteem (how highly consumers regard and respect the brand)
Service Characteristics
Intangibility (cannot be seen, tasted, felt, etc. Ex. Airline passenger) -Inseparability (cannot be separated from their providers. – Variability (quality of service depends on who provides them as well as when, where and how). – Perishability (cannot be stored for later sale or use. Ex: missing dentist appointment.
Service-Profit Chain
links service firm profits with employee and customer satisfaction. – five links: internal service quality (inside the job, training, work environment). – satisfied and productive service employees (more satisfied, hardworking) -Greater service value. – Satisfied and loyal customers. – Healthy service profits and growth (superior service firm performance)
Internal marketing
service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction.
Interactive Marketing
service quality depends heavily on the quality of the buyer-seller interaction during the service encounter.
Managing Service Differentiation
- offer (include innovative features that set one company’s offer apart from others) -delivery (having more able and reliable customer- contact people). – images (symbols and branding)
Price
amount of money charged for a product or service.
Value-based pricing
uses buyer’s perceptions of value, not the seller’s cost, as the key to pricing.
Good-value pricing
offering just the right combination of quality and good service at a fair price.
High-low pricing
higher prices on everyday purchases, and lower prices on temporarily selected item
Value-added pricing
attaching value-added features and services to differentiate a company’s offers and charging higher prices.
Cost-based Pricing
Setting Prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk.
Fixed Cost (overhead)
Costs that do not vary with production or sales level.
Variable Costs
Costs that vary directly with the level of production.
Total Costs
The Sum of the fixed and variable costs for any given level of production.
Experience Curve (learning curve)
The drop in the average per-unit production cost that comes with accumulated production experience.
Cost-Plus Pricing
Adding a standard markup to the cost of a product.
Break- even pricing ( target profit pricing)
Setting price to break even on the costs of making and marketing a product, or setting price to make a target profit.
Target Costing
Pricing that starts with an ideal selling price, then target costs that will ensure the price is met.
Pricing in different types of markets
pure competition (not much effect on price. Ex wheat, copper) - monopolistic competition (many buyers and sellers) - oligopolistic competition (few sellers who are sensitive to each other’s strategies) - Pure monopoly ( one seller – Ex. TTC)
Demand Curve
A curve that shows the number of units that the market will buy in a given time period, at different prices that might be charged.
Price Elasticity
A measure of the sensitivity of demand to changes in price.
External Factors when Setting Prices
Economic conditions, resellers, government, social concerns
Market-skimming pricing
Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales.
Market- Penetration Pricing
Setting a low price for a new product to attract a large number of buyers and a large market share.
Product line pricing
Setting the price steps between various products in a product line based on cost differences between the products customer evaluations of different features, and competitor’s prices.
Optional-Product Pricing
The pricing of optional or accessory products along with a main product.
Captive-product pricing
Setting a price for products that must be used along with a main product, such as blades for a razor and ink for a printer.
By-Product Pricing
Setting a price for by-products to make the main product’s price more competitive.
Product bundle pricing
Combining several products and offering the bundle at a reduced price.
Discount
A straight reduction in price on purchases during a stated period of time.
Revenue management
ensuring company will sell the right product to the right consumer at the right time for the right price
Discount and allowance pricing
Reducing prices to reward customer responses such as paying early or promoting the product
Segmented Pricing
Adjusting prices to allow for differences in customers, products, or locations.
Psychological Pricing
Adjusting prices for psychological effect
Promotional Pricing
Temporarily reducing prices to increase short-run sales
Geographical Pricing
Adjusting prices to account for the geographic location of customers
Dynamic Pricing
Adjusting prices continually to meet the characteristics and needs of individual customers and situations
International Pricing
Adjusting prices for international markets
Reference Pricing
Prices that buyers carry in their minds and refer to when they look at a given product.
FOB-origin pricing
geographical pricing strategy in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination.
Uniform-delivered Pricing
A geographic pricing strategy in which the company charges the same price plus freight to all customers, regardless of their location.
Zone pricing
A geographical pricing strategy in which the company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price.
Price-fixing
sellers must set prices without talking to competitors.
Predatory pricing
selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business.
Price maintenance
a manufacturer cannot require dealers to charge a specified retail price for its product.
Deceptive Pricing
when a seller states prices or price savings that are not actually available to consumers.
Value Delivery Network
The network made up of the company, suppliers, distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system in delivering customer value.
Supply chain
they supply the materials, parts, information, etc
Marketing Channel (distribution channel)
A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.
Marketing Channel Functions
1) Information (gathering info) 2) Promotion (spreading communication) 3) Contact (finding and communicating with prospective buyers) 4) Matching (shaping and fitting the offer to the buyer’s needs) 5) Negotiation (Reaching an agreement on price and other term of the offer so that the ownership or possession can be transferred)
Channel Level
A layer of intermediaries that perform some work in bringing the product and its ownership closer to the final buyer.
Direct marketing channel
A marketing channel containing one or more intermediary levels.
The flows
physical flow, flow of ownership, the payment of flow, the information flow, and the promotional flow.
Channel conflict
Disagreements among marketing channel members on goals and roles- who should do what and for what rewards.
Horizontal conflict
occurs among firms at the same level of the channel.
Vertical Conflict
between different levels of the same channel
Conventional Distribution Channel
A channel consisting of one or more independent producers, wholesalers, and retailers, each separate business seeking to maximize its own profits, even at the expense of profits for the system as a whole.
Vertical Marketing System (VMS)
A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel members own the others, has contracts with them, or has so much power that they must all cooperate.
Corporate VMS
A vertical marketing system that combines successive stages of production and distribution under single ownership- channel leadership is established through common ownership.
Contractual VMS
A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone.
Franchise Organization
A contractual marketing system in which a channel member, called a franchisor, links several stages in the production- distribution process.
Manufactured-sponsored retailer franchise system
Ex. Ford and its network of independent franchised dealers.
Manufacturer-sponsored wholesaler franchise system
Ex. Coco-Cola licenses bottlers (wholesalers) in various markets who buy Coco-Cola syrup concentrate and then bottle and sell the finished product to retailers in local markets.
Intensive Distribution
Stocking the product in as many outlets as possible.
Exclusive Distribution
Giving a limited number of dealers the exclusive right to distribute the company’s products in their territories.
Selective Distribution
The use of more than one but fewer than all of the intermediaries who are willing to carry the company’s products.
Promotion mix (marketing communications mix)
The specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships.
Promotion Tools
Advertising, Sales Promotion, Personal Selling, Public Relations, Direct Marketing
Advertising
Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor
Sales Promotion
Short-term incentives to encourage the purchase or sale of a product or service.
Personal Selling
Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships.
Public relations
Building good relations with the company’s various publics by obtaining favourable publicity, building up a good corporate image, and handling or heading off unfavourable rumours, stories, and events
Direct Marketing
Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.
Integrated marketing communications (IMC)
Carefully integrating and coordinating the company’s many communication channels to deliver, a clear, consistent, and compelling message about the organization and its products.
Communication Process
for Company Sender, Encoding (putting thought in symbolic form), Message, Media (communication channels), Decoding (receiver assigns meaning to the symbols encoded by the sender), Receiver (The party receiving the message sent by another party), Response ( The reaction of receiver after being expose to the message), Feedback (the part of the receiver’s response communicated back to the sender), Noise (The unplanned static or distortion during the communication process)
Buyer-readiness stage
The stages consumers normally pass through on their way to purchase, including awareness, knowledge, liking, preference, conviction, and purchase.
AIDA
message should get attention, hold interest, arouse desire, and obtain action.
Personal Communication Channels
Channels through which two or more people communicate directly with each other, including face to face, on the phone, through mail or email, or even through an internet “chat”.
Word-of-mouth Influence
Personal communication about a product between target buyers and neighbours, friends, family, members or associates.
Buzz marketing
cultivating opinion leaders and getting them to spread information about a product or service to others in their communities.
Non-personal Communication Channels
Media that carry messages without personal contact or feedback, including major media, atmospheres, and events.
Affordable Method
Setting the promotion budget at the level management thinks the company can afford.
Percentage-of-Sales method
Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price.
Competitive-parity method
Setting the promotion budget to match competitors’ outlays.
Objective-and-task method
Developing the promotion budget by (1) defining specific objectives, (2) determining the tasks that must be performed to achieve these objectives, and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.
Push strategy
A promotion strategy that calls for using the sales force and trade to push the product through channels. The producer promotes the product to channel members who in turn promote it to final consumers.
Pull strategy
A promotion strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product creating a demand vacuum that “pulls” the product through the channel.
Integrating the marketing mix
1) Start with customers (touch points) 2) Analyze trends (which can affect business) 3) Audit the pockets of communications spending throughout the organization. 4) Team up in communications planning. 5) Create Performance measures that are shared by all communication elements. 6) Appoint a director responsible for the company’s persuasive communications efforts.
Three-day cooling off rule
special protection to customers who are not seeking products.