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61 Cards in this Set

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Adoption Curve

Curve that shows how time and ownership of a product correlate. Starts slow with innovators, then Early adopters, Majority market, and ends with laggards.

stages in the Product Life Cycle: Market introduction



market introduction, a new product (good or service) is brought into the marketplace with heavy marketing spending (e.g., communications to spark awareness). In addition to advertising to provide information and attempts at persuasion, promotion can include samples and coupons to spur trial.

stages in the Product Life Cycle:

Second phase is one of market growth. Sales are accelerating and profits rise at first. Customer awareness is stronger, and there may be some buzz in the marketplace. Distribution channel coverage is greater, so greater access also contributes to stronger sales. The firm might be able to begin increasing prices (resulting in higher margins and greater profits). At the same time, competitors observe the pioneering company’s successes and start sniffing profit potential, so they enter the game.

stages in the Product Life Cycle:Some point later brings a product to market maturity.

Some point later brings a product to market maturity. Advertising continues to try to persuade customers about a brand’s relative advantages, and serves as a reminder to buy in the product category. Products may proliferate to a fuller product line to satisfy more segments of customers. Industry sales have leveled off, so competition is intensifying—there is more competition than in any other stage in the life cycle. The final phase in the product life cycle is that of market decline. Sales and profits are both dropping, and new products are replacing older generations. The firm needs to decide what to do with the old product:

stages in the Product Life Cycle: The final phase in the product life cycle is that of market decline.

The final phase in the product life cycle is that of market decline. Sales and profits are both dropping, and new products are replacing older generations. The firm needs to decide what to do with the old product

Explain the concept of Diffusion of Innovation

The concept of Diffusion of Innovation is that new products are akin to contagious diseases. If you put a person with a cold in a room full of people and they sneeze, think about who will get sick fastest—the people closest to Sneezy. The spreading word-of-mouth helps activate the process of the “diffusion of innovations.”

The “innovators” are the

first 3-5% who like to try new ideas and are willing to take risks.

The “early adopters” are the

next 10-15% who are even more influential than “innovators” because they are a bigger group, and because some write-off “innovators” as zealots.

The “early majority”

(34%) are more risk averse than the first two groups, and they wait to hear positive reviews before adopting a product.

The “late majority” are

even more cautious and tend to be older, more conservative, and more reliant on consistent messages received through word of mouth.

Lastly, the “laggards” are the

last 5-15% of customers to adopt a product, and are risk averse, skeptical of new products in general, and stereotypical have lower income.

culture

patterns of values, beliefs, and learned behavior that are held in common and transmitted by the members of any given society -our


native ____ is in almost every corner of our lives, and yet we are the least aware of it as a level of social influence -


marketing strategies must be tailored to each country in which a marketer is active

norms

all societal units establish rules of behavior which provide guidance regarding acceptable and unacceptable behavior

subculture

any cultural patterning that preserves important features of the dominant society but provides for values, norms and behaviors of its own

Taboo

proscribed by society as improper or unacceptable:

What are reference groups?

Reference groups are groups that consumers compare themselves to or associate with. Reference groups are similar to opinion leaders in that they can have a profound influence on consumer behavior. Reference groups are considered a social influence in consumer purchasing

Why are some individuals opinion leaders? What are possible sources of their influence?

Opinion leaders are anyone who's an active voice in a community. It's somebody who (a) speaks out and (b) gets asked for advice a lot.This is different than a community gadfly, like the guy who always shows up to every city council meeting and asks question after question about some obscure pet issue. He's s not an opinion leader. Sure, he speaks out a lot -- but nobody really listens, and people aren’t stopping him on the street to ask about other issues, like who they should support for president or what dentist he recommends.

Membership group –

The individual is currently a member of this type of group. Among the obvious groups in this classification are fraternities and sororities, social clubs, social networking circles or groups. Other groups may be somewhat less publicly obvious, such as one’s family, religious organization, residential neighborhood association, country club, etc.

Negative reference group

A reference group that an individual disapproves of and uses as a standard representing opinions, attitudes, or behavior patterns to avoid. Compare positive reference group.

VALS

Values and Lifestyle Consumer Types

Ideals:Thinkers

Ideals oriented, mostly satisfied with their lives, tend to be mature and well-rounded. Practical. Value functionality. Enough resources for lifestyle

Ideals:Believers

Have fewer resources than thinkers, achievers, or experiences. Driven by their own strong principles. Tend to buy proven brands. (obedient type)

Achievement: Innovators

Abundant resources, likely to be sophisticated and successful. Open to change, concerned with social issues, discriminating taste, buy to please themselves.

VALS subcategories

Ideals, Achievement, Self Expression

Achievement: Achievers:

Sufficient resources, value careers and are successful (think upwardly-mobiles) Feel they are in control of their lives; risk averse and value stability. Unlike thinkers, they are status-oriented;they buy products for prestige and to display status.

Achievement:Strivers

Limited resources, they seek security and approval from others (think social comparison) Tend to buy products that give them status.

Achievement: Survivors

minimal resources-little education, few skills, no money, they live day to day. Preoccupied with today-no energy left to worry about tomorrow. They buy goods that are daily essentials.

Self expression: Experiencers:

Younger, like achievers and thinkers. They tend to be action-oriented. They are impulsive and tend to take risk. They have sufficient money to spend and they like new things.

Self expression: Makers

Limited resources like Strivers. Tend to be self-sufficient. Motivated to express individuality. Lots of energy and drive, very practical. DIY

Maslow's hierarchy +1


Hedonic needs

The second level. It is fun loving, thrill seeking, fantasy, etc. exist at the same level as self esteem.

What are motivations?

They're situational motives, which come from motivations, which come from the hierarchy of needs.. so is power and status, a motivator for people.

Heuristics

Day to day life is filled with decisions ,whether it is your breakfast cereal or whatradio station to listen to. In decision making consumers seek the assistance ofheuristics.• Researches have identified that in low involvement decision making consumersrely on heuristics. i.e. rules of thumb or mental short cuts.• For example, Bob has decided to buy a shirt at his usual store named X .Thisdecision is driven by his belief that this store thinks it has the best range and itsbrand gives him confidence. Therefore Bob is ignoring any information searchabout competitors or substitute products. His assumption about X acted as ashortcut that removed a few steps from the decision making process.

HeuristicsFor a marketer

, understanding heuristics is an advantage that helps them forecastconsumers behavior when purchasing their brand. In this lecture note three mainheuristics are described:• The Representativeness Heuristic• The Availability Heuristic• The Anchoring and Adjustment Heuristic

Iterative Nature

A process for arriving at a decision or a desired result by repeating rounds of analysis or a cycle of operations. The objective is to bring the desired decision or result closer to discovery with each repetition (iteration). The iterative process can be used where the decision is not easily revocable (such as a marriage or war) or where the consequences of revocation could be costly

Failure points

The Classics (New Coke, Sony Betamax). Idea failures (crystal pepsi, Beer branded water, Barbie PC) and Extension failures (Harley davidson perfume, BIC disposable pantyhose, Smith and Wesson Mountain Bikes, Lifesaver's Soda)

Evoked set

A group of relevant brands that a prospective consumer is favorably familiar with when they are thinking about making a purchase. The goal of many marketing campaigns is to establish their business brand firmly among the evoked set of products considered by most target consumers when making a purchase decision.

Choice set

AKA consideration set. A choice set is one scenario, also known as a treatment, provided for evaluation by respondents in a choice experiment. Responses are collected and used to create a choice model.

Post-Purchase consumer Behaviors and Attitudes

Post-purchase behavior is the final stage in the consumer decision process when the customer assesses whether he is satisfied or dissatisfied with a purchase.How the customer feels about a purchase will significantly influence whether he will purchase the product again or consider other products within the brand repertoire.A customer will also be able to influence the purchase decision of others because he will likely feel compelled to share his feelings about the purchase.Source: Boundless. “Post-Purchase Behavior.” Boundless Marketing.

Brand extension

Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. The new product is called a spin-off

Line extension

A product line extension is the use of an established product brand name for a new item in the same product category.Line Extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes

Trading up

1.Increasing the number of features (and their associated benefits) of a product, improving its quality, or backing it with a superior level of service to justify a higher price. Opposite of trading down.2.Type of selling in which the customer is persuaded to buy a more expensive item, or a larger quantity, than originally intended in exchange for an attractive discount or some other incentive.

Trading Down

Reducing the number of features (and their associated benefits) or the quality of a product to suit the selling price demanded by its customers. Opposite of trading up

New product classification

The three different types of innovations - Continuous Innovation- Dynamically Continuous Innovation- Discontinuous Innovation

marketing mix

The set of tactical marketing tools-product, price, place, and promotion-that the firm blends to produce the response it wants in the target market

Consumer decision making process

Stimulus, Evoked Set, Informal information search,Criteria Development, Formal information search, Choice Set, Depth evaluation, selection,Purchase Post Purchase attitudes and behaviors, future purchases
Cognitive dissonance

Buyer discomfort caused by post purchase conflict

Consumer product classifications

Consumer goods are products which are purchased for personal consumption. Consumer goods are classified into three areas: Convenience goods, shopping goods and specialty goods

Convenience products

Convenience products are inexpensive frequent purchases, there is little effort needed to purchase them. Examples include fast food, toiletries and confectionery products. Convenience products are split into staples, such as milk, eggs and emergency products which are purchased when the need arises e.g. Umbrellas.

Shopping goods

Shopping goods are products that consumers do not buy as frequently as convenience goods. They usually cost more than convenience goods and consumers expect to have them for longer, so they will do some research prior to purchase. The research will include comparing product features and price. Examples of shopping goods include white goods (such as fridge/freezers and washing machines), clothing and furniture.

Specialty goods

Specialty goods are products with unique features or branding. Consumers do not compare them with other products as the goods have features unique to them. Instead they will spend time searching for the retailer selling the product they want. Consumers are often prepared to travel to purchase their product and pay a premium. Specialty goods include designer clothes, luxury cars, antiques. Professional services provided by a person known for the effectiveness and quality of their work can also come under this category. For example a lawyer or accountant.

Product mix

Product mix pertains to the variety of products a company sells. It also refers to the total number of product lines that a company offers to its customers. There are four dimensions to product mix, namely, width, length, depth and consistency.

width

The width of a company's product mix pertains to the number of product lines that a company sells. For example, if a company has two product lines, its product mix width is two. Small and upstart businesses will usually not have a wide product mix. It is more practical to start with some basic products and build market share. Later on, a company's technology may allow the company to diversify into other industries and build the width of the product mix

length

Product mix length pertains to the number of total products or items in a company's product mix, according to Philip Kotler's textbook "Marketing Management: Analysis, Planning, Implementation and Control." For example, ABC company may have two product lines, and five brands within each product line. Thus, ABC's product mix length would be 10. Companies that have multiple product lines will sometimes keep track of their average length per product line. In the above case, the average length of an ABC Company's product line is five.

Depth

Depth of a product mix pertains to the total number of variations for each product. Variations can include size, flavor and any other distinguishing characteristic. For example, if a company sells three sizes and two flavors of toothpaste, that particular brand of toothpaste has a depth of six. Just like length, companies sometimes report the average depth of their product lines; or the depth of a specific product line.

consistency

Product mix consistency pertains to how closely related product lines are to one another--in terms of use, production and distribution. A company's product mix may be consistent in distribution but vastly different in use. For example, a small company may sell its health bars and health magazine in retail stores. However, one product is edible and the other is not. The production consistency of these products would vary as well.

Continuous Innovation

-modify existing product to set it apart -no new learning or behavior modification needed (knockoff product & copies existing product with a few changes) Ex. Ipod
Requires no consumer learning. Frosted v. Non frosted poptarts

Knock off

name brand that creates some copy cats, sometimes store brand, sometimes not

Dynamically Continuous Innovation

Pronounced modification to an existing product. Moderate learning or behavior modification needed. Convergence products (when teo technology come together to create more than sum of it's part) ex. Blackberry cell phone

Discontinuous Innovation

New product that changes the way we live. Major learning or behavior modification needed. Ex: computer

Packages should...

Protect product, protect product after purchase, protect product from children, be useful for display in stores, be easy to stock and stack, Provide product information to buyers (Price, Usage, etc), Attract attention, Be persuasive, provide competitive advantage and help conform to some international barriers.