BUSA 330 Quiz 4 Chapters 11, 12, & 13 WVU
Knowledge Gap
A type of service gap; reflects the difference between customers' expectations and the firm's perception of those expectations.
Delivery Gap
A type of service gap; the difference between the firm's service standards and the actual service it provides to customers.
Brand
Add value to merchandise and services, for both consumers and sellers, beyond physical and functional characteristics or the pure act of performing the service.
Product Design
Entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and feature or service's features. Also called product development.
Reverse Engineering
Involves taking apart a competitor's product analyzing it and creating an improved product that does not infringe on the competitor's patents, if any exist.
Market Testing
Once the firm has developed its new product or service and tested the prototypes, it must test the market for the new product with a trial batch of products. These tests can take two forms: premarket testing & test marketing.
Manufacturer Brands (National Brands)
The majority of the brands marketed in the United States are __, and these firms spend millions of dollars each year to promote their brands.
Brand Associations
The mental and emotional links that consumers make between a brand and its key product attributes; can involve a logo, slogan, or famous personality.
Co-Branding
The practice of marketing two or more brands together, on the same package or promotion.
Manufacturer's Suggested Retail Price (MSRP)
The price that manufactures suggest retailers use to sell their merchandise.
Concept Testing
The process in which a concept statement that describes a product or a service is presented to potential buyer or users to obtain their reactions.
Perceived Value
The relationship between a product's or service's benefits and its cost.
Tangible Restitution
When there is a service failure, customers like an apology, but they also want distributive fairness. In other words, they want to receive ___.
Service Failure
When this happens, the best course of action is to attempt to make amends with the customer and learn from the experience. When a __ does occur, the firm has a unique opportunity to demonstrate its customer commitment.
the customer who is using the self-checkout:
perceives he is being processed faster than through the traditional employee-assisted checkout
Communication Gap
A type of service gap; refers to the difference between the actual service provided to customers and the service that the firm's promotion program promises.
Trade Promotions
Advertising to wholesalers or retailers to get them to purchase new products, often through special pricing incentives.
Alpha Testing
An attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in firm's research and development (R&D) department.
Educational Institutions
An intangible service that promote the quality of services by touting their famous faculty and alumni as well as their accreditations.
Voice-of-Customer (VOC) Program
An ongoing marketing research system that collects customer inputs and integrates them into managerial decisions.
Service
Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed; intangible customer benefits that are produced by people on machines and cannot be separated from the producer.
Product
Anything that is of value to a consumer and can be offered through a voluntary marketing exchange.
Heterogeneity/ Heterogeneous
As it refers to the differences between the marketing of products and services, the delivery of services is more variable.
Specialty Products/ Services
Consumers devote a lot of time and effort to selecting just the right one. Examples might include luxury cards, legal or medical professionals, or designer apparel. Example of what kind of product type?
Laggards
Consumers who like to avoid change and rely on traditional products until they are no longer available.
Components of a Product
Core customer value, actual product, associated services.
Wrap Rage
Costco has replaced the clamshells with packaging made of coated paperboard that still requires scissors to open but is flat and therefore can be opened easily. Costco did this to reduce __ in consumers.
Delivery Gap
Firms can close this gap by getting employees to meet or exceed service standards when the service is being delivered by empowering service providers, providing support and incentives, and using technology where appropriate.
Standards Gap
Firms can close this gap by setting appropriate service standards, training employees to meet and exceed those standards, and measuring service performance.
Types of Products
Consumer Products; Specialty Products/ Services; Shopping Products/ Services; Convenience Products/ Services; Unsought Products/ Services.
Depth
Firms might add items to address changing consumer preferences or to preempt competitors while boosting sales. This is an example of a firm increasing ___.
Block-Busters
Firms are betting that a few extremely successful new products, often known as __, can generate enough revenues and profits to cover losses from other introductions that might not fare so well.
Knowledge Gap
Firms can close this gap by determining what customers really want by doing research using marketing metrics such as service quality and the zone of tolerance.
a manager who designs a specific way for all hostesses to accept reservations over the phone
Heterogeneity in service delivery at a restaurant can result from all of the following EXCEPT:
offer cues to customers such as comfortable waiting rooms and sparkling examination rooms with their diplomas on the wall
to reduce the uncertainty of the intangible nature of services, a medical provider will often
Pioneers
New product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market; also called breakthroughs.
Breakthroughs
New product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market; also called pioneers.
Decline Stage
Stage of the product life cycle when sales decline and the product eventually exits the market.
Growth Stage
Stage of the product life cycle when the product gains acceptance, demand and sales increase, and competitors emerge in the product category.
Growth Stage
Stage that consists of product adopters. Profits in this stage rise because of the economies of scale associated with manufacturing and marketing costs, especially promotion and advertising. At the same time, firms that have not yet established a stronghold in the market, even in narrow segments, may decide to exit in what is referred to as industry shakeout.
Core Customer Value
When developing or changing a product, marketers start with the ____ to determine what their potential customer are seeking.
Honestly listen to the students' complaints and use their messages to build a committed relationship
When many students are complaining about a problem at an online university, one of the best things the university can do to better serve its students is to __.
Product Life Cycle
4 stages; introduction, growth, maturity, and decline.
Micromarketing
A ___ strategy can customize a service to meet customers' needs exactly.
Intangible
A brand like Google will invest resources in creating a simple, attractive site that has interesting images and icons, such as the daily updates to the Google logo for holidays and special events, in order to better communicate the __ element of their service and image to users.
Perishable
A characteristic of a service: it cannot be stored for use in the future.
Procedural Fairness
After waiting in line over two hours to experience a new ride at an amusement park, the ride breaks down and guests learn it will be down for four hours. if everyone waiting is given a "rain check" with the sequential order of their location in the line enabling them to return in four hours and re-queue in order, most guests will be satisfied, as they are experiencing
Retailer/ Store Brands
Also called private-label brands, are products developed by retailers.
Brand Repositioning (Rebranding)
Although ___ can improve the brand's fit with its target segment or boost the vitality of old brands, it is not without costs and risks. Firms often need to spend tremendous amounts of money to make tangible changed to the product and packages as well as intangible changes to the brands image through various forms of promotion. These costs may not be recovered if the ___ and message are not credible to the consumer or if the firm has mistaken a fad for long-term market trend.
Communicate
Although firms have difficulty controlling service quality because it can vary from day to day and provider to provider, they have nearly constant control over how they __ their service package to their customers.
95%
As many as __ of all new consumer goods fail.
Characters
Brand symbols that could be human, animal, or animated. Examples include the Pillsbury Doughboy and the Keebler Elves.
Listening to the Customer & Involving Them in the Service Recovery
Customer can become very emotional about a service failure. The customer may just want to be heard, the very process of describing a perceived wrong to a sympathetic listener is therapeutic in and of itself. Service providers therefore should welcome the opportunity to be that sympathetic ear, listen carefully, and appear anxious to rectify the situation to ensure it doesn't happen again.
Building Blocks of Service Quality
Customers generally use 5 distinct service dimensions to determine overall service quality: Reliability, Responsiveness, Assurance, Empathy, & Tangibles.
Service Gap
Customers have certain expectations about how a service should be delivered. When the delivery of that service fails to meet those expectations, a __ results.
Service Quality
Customers' perceptions of how well a service meets or exceed their expectations.
Why Change Product Mix Breadth?
Decrease: to address changing market conditions or meet internal strategic priorities (ex: to focus on a different product line). Increase: to capture new or evolving markets and increase sales (ex: adding a new line of jam products to complement its bread line)
Product Life Cycle
Defines the stages that new products move through as they enter, get established in, and ultimately leave the marketplace and thereby offers marketers a starting point for their strategy planning.
Diffusion (Diffuse)
Different products __ at different rates, marketers must work to understand the __ curve for each new product and service as well at the characteristics of the target customer in each stage of the __.
13.5%
Early adopters represent __ of all buyers in the market.
34%
Early majority represents approximately __ of the population in the buyers' market.
Service Recovery
Effective __ demands: (1) listening to the customers and involving them in the ___, (2) providing a fair solution, and (3) resolving the problem quickly.
Manufacturer Brands (National Brands)
Examples include: Nike, Coca-Cola, KitchenAid, and Sony.
What are the steps in the new product development process?
First, they generate new ideas for the product or service. Second, firms test their concepts by either describing the idea of the new product or service to potential customers or showing them images of what the product would look like. Third, the design process entails determining what the product or service will actually include and provide. Fourth, firms test market their designs. Fifth, if everything goes well in the test market, the product is launched. Sixth, firms must evaluate the new product or service to determine its success.
Expectations
If the concept fails to meet customers' __, it is doubtful it would succeed if it were to be produced and marketed.
Product Launch
If the market testing returns with positive results, the firm is ready to introduce the product to the entire market. This most critical step in the new product introduction requires tremendous financial resources and extensive coordination of all aspects of the marketing mix.
Concept Testing
In __ market researchers should ask whether the product would satisfy a need that other products currently are not meeting. Researchers might also ask about the expected frequency of purchase, how much customers would buy, whether they would buy it for themselves or as a gift, when they would buy, and whether the price information indicates a good value. Marketers usually collect information about the customers, so they can analyze which consumer segments are likely to be most interested in the product.
Empowerment
In context of service delivery, means allowing employees to make decisions about how service is provided to customers.
Lead Users
Innovative product users who modify existing products according to their own ideas to suit their specific needs.
Heterogeneity/ Heterogeneous
Jane has realized that she does not enjoy taking a taxi to work because there is substantial __ in the delivery of the service depending on who is driving her cab that day.
Breadth
Kellogg's has four: Ready-to-cereal; Toaster Pastries and wholesome portable breakfast snacks; Cookies and crackers; & Natural, organic and frozen food. This is an example of __.
16%
Laggards make up roughly __ of the buyers' market.
34%
Late Majority represents approximately __ of the population in the buyers' market.
Trade Show
Major events attended by buyers who choose to be exposed to products and services offered by potential suppliers in an industry.
What are the Differences Between Manufacturer and Private-Label Brands?
Manufacturer brands are owned and managed by the manufacturer. The manufacturer develops the merchandise, produces it to ensure consistent quality, and invests in a marketing program to establish an appealing brand image. Example: Coca-Cola and Sony. Private-label brands are products developed by retailers, "store brands."
Demand
Manufacturers also use promotion to generate __ for new products with consumers. If manufacturers can create __ for the products among consumers, they will go to retailers asking for it, thus further inducing retailers to carry the products.
Depth
Number of categories within a product line.
Place
Manufacturers work with their retailers on __ decisions such as: Should the merchandise be stored at retailer's distribution centers or distributed directly to stores? What initial and fill-in quantities should be shipped? Should the manufacturer be involved in reordering decisions? Should the merchandise be individually packaged so it is easy to display in the stores? Should price stickers be affixed on the merchandise at the factory or at the store? Should the manufacturer be involved in the maintenance of the merchandise once in the store?
Why can't we separate firms into just service or just product sellers?
Many of them are a blend and fall within the product-service continuum.
Actual Product
Marketers convert core customer value into an ____. Attributes such as the brand name, features/ design, quality level, and packaging are important, but the level of their importance varies, depending on the product.
Zone of Tolerance
Marketing metric to evaluate how well firms perform on the five service quality dimensions is the __.
Inseparable
One of the basic ways in which services differ from products is that production and consumption are __ from each other. Consequently, service providers often include options for the customer to become more involved in the production of the service, which usually results in greater customer satisfaction.
Customize
One of the distinct advantages of heterogeneity of services is that it enables the provider to __ the service and not deliver a standardized, cookie-cutter approach uniformly to every buyer.
Brands Establish Loyalty
Over time and with continued use, consumers learn to trust certain brands. They know, for example, that they wouldn't consider switching brands and, in some cases, fell a strong affinity to certain brands. This is describing what value of branding for customers?
Reasonable
People are generally __ when they are warned that some aspect of the service may be below their expectations. They just don't like surprises!
decreased the rate of service heterogeneity
Replacing people with machines in the delivery of services has __ through the use of in-store kiosks.
Unsought Products/ Services
Require lots of marketing effort and various forms or promotion. Consumers either do not normally think of buying or do not know about it at all. Example of what kind of product type?
Service Gap
Results when a service fails to meet the expectations that customers have about how it should be delivered.
76%
Services account for __ of the U.S. gross domestic product (GDP).
cannot be easily separated from, the service providers such as the stewards and crew
Susan is looking to purchase a cruise to Alaska. in the search process, she discovers that this purchase is different from purchasing an automobile, in that the cruise:
Promotion
Test results help the firm determine an appropriate integrated marketing communications strategy. __ for new products is required at each link in the supply chain. IF the products are not sold and stocked by retailers, no amount of __ to consumers will sell the products.
Pioneers
The Apple iPod is an example of what type of product?
Use of Technology
The __ can cause problems. Some customers either do not embrace the idea of replacing a human with a machine for business interactions or have problems using the technology. IN other cases, the tech may not perform adequately, such as ATMs that run out of money or are out of order. Supermarket self-check-out devices are too challenging for some consumers.
Service Gap Model
The __ is designed to encourage the systematic examination of all aspects of the service delivery process and prescribes the steps needed to develop an optimal service strategy.
FDA (Food and Drug Administration)
The ___ is the primary federal agency that reviews food and package labels and ensures that the claims made by the manufacturer are true.
Knowledge Gap
The __shows the difference between a customer's expectations and what the company thinks the customer expects.
Reliability
The ability to perform the services dependably and accurately. Part of the building blocks of service quality.
Core Customer Value
The basic problem solving benefits that consumers are seeking.
Diffusion of Innovation
The theory surrounding ___ helps marketers understand the rate at which consumers are likely to adopt a new product or service. It also gives them a means to identify potential markets for their new products or services and predict their potential sales, even before they introduce the innovations.
Individual Brands
The use of individual brand names for each of a firm's products.
Research and Development (R&D)
To generate ideas for new products, a firm can use its own internal __ efforts, collaborate with other firms and institutions, license technology from research-intensive firms, brainstorm, research competitors' products and services, and / or conduct consumer research.
Breadth
Too much __ in the product mix becomes costly to maintain, and too many brands may weaken the firm's reputation.
Innovators
Type of buyer that keep themselves very well informed about the product category by subscribing to trade and specialty magazines, talking to other experts, visiting product-related forums, seminar, and special events.
Diffusion of Innovation
Using the ___ theory, firms can predict which types of customers will buy their new product or service immediately after its introduction as well as later as the product is more and more accepted by the market. With this, knowledge, the firm can develop effective promotion, pricing, and other marketing strategies to push acceptance among each customer group.
Introduction Stage
Usually starts with a single firm, and innovators are the ones to try the new offerings. The __ is characterized by initial losses to the firm due to its high start-up costs and low levels of sales revenue as the product beings to take off. If the product is successful, firms may start seeing profits toward the end of this stage.
Inseparable
When a dentist fills a cavity in a patient's tooth, there is the element of __ that indicates the dentist should try to engage the patient in the process as much as possible since she must be present for the service.
approximately how long it will take the firm to resolve the issue.
When a service delivery fails, customers need to be told __ in order to reduce buyers' irritation and dissatisfaction and reduce the perceived time for resolution.
Service Recovery
When a service failure occurs, effective __ efforts can significantly increase customer satisfaction, purchase intentions, and positive word of mouth, though customers' post-recovery satisfaction levels usually fall lower than their satisfaction level prior to the service failure.
Depth
Within Kellogg's breakfast snack product line, for example, it offers Nutri-Grain, Special K, and Kashi bars as well as Pop-Tarts. This is an example of __.
Innovation
Without __ and its resulting new products and services, firms would have only 2 choices: continue to market current products to current customers or take the same product to another market with similar customers.
Logos, Symbols
__ are visual branding elements that stand for corporate names or trademarks. __ are logos without words. Examples include the Nike swoosh and the Mercedes star.
Test Marketing
__ costs more and takes longer than premarket tests, which may provide and advantage to competitors that could get a similar or better product to market first without ___. For this reason, some firms might launch new products without extensive consumer testing and rely instead on intuition, instincts, and guts.
Brand Licensing
__ is an effective form of attracting visibility for the brand and thereby building brand equity while also generating additional revenue. There are, however, some risks associated with it. For the licensor, the major risk is the dilution of its brand equity through overexposure of the brand, especially if the brand name and characters are used inappropriately.
Satisfaction
__ leads to loyalty.
Procedural Fairness
after sitting on the tarmac in a delayed flight for three hours, passengers are finally removed from the plane. In dealing with their complaints in the terminal, the airline needs to pay attention to __ and follow the airline's guidelines concerning delays.
Recovery
while no service provider hopes for a situation of poor delivery, it can be converted into a situation of building positive interaction and buyer loyalty. the key is to deliver sound, swift, service __ that resolves the problem and shows the buyer that the firm is listening to the complaint and working to find a fair solution.
supply and demand
Much more than when marketing products, service providers such as seaside hotels and restaurants have a dilemma of matching __.
Brand (What Makes a)
Name, URLs, Logos & Symbols, Characters, Slogans, Jingles/ Sounds.
Types of Consumer Products
(1) Specialty: customer shows a strong preference and for which they will spend considerable time and effort to search for the best suppliers (ex: road bike enthusiasts). (2) Shopping: products for which consumers will spend a fair amount of time comparing alternatives (ex: furniture, apparel). (3) Convenience: consumer not willing to spend any effort to evaluate prior to purchase. (4) Unsought: products that consumers do not normally think to buy (ex: hand warmers)
Inseparable
A characteristic of a service: it is produced and consumed at the same time; that is, service and consumption are ___.
Intangible
A characteristic of a service; it cannot be touched, tasted, or seen like a pure product can.
Brand Awareness
A company lives or dies based on __. Consumers cannot buy products that they don't know exist. Even if the overall brand name is familiar, it won't help sales of individual products unless consumers know what the products are available under that name.
Brand Licensing
A contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiated fee.
The longer it takes to get an answer from the firm
A customer with a complaint about the way in which a washing machine repair was made will become increasingly more annoyed with the service provider:
Compatibility
A diffusion process may be faster or slower, depending on various consumer features, including international cultural differences. Example: Firefox has different features in China, then in the USA. Part of the factors that enhance the diffusion of a good or service.
Family Brand
A firm's own corporate name used to brand its product lines and products.
Wrap Rage
A great frustration with packaging that makes it seemingly impossible to get at the actual products.
the firm can still view service as a viable competitive advantage.
A grocery store is at the product-dominant side of the Service-Product Continuum since most items are selected self-service from the shelves: however, __.
Early Majority
A group of consumers in the diffusion of innovation model that represents approximately 34% of the population; members don't like to take much risk and therefore tend to wait until bugs are worked out of a particular product or service; few new products and services can be profitable until this large group buys them.
What is the Difference Between Product Mix Breadth and Product Line Depth?
A product mix is the complete set of all products offered by the firm; it's breadth represents a count of the number of product lines offered by the firm. Product lines are groups of associated items that consumers tend to think of as part of a group; it's depth equals the number of products within a line
Procedural Fairness
A restaurant is facing a problem in service delivery on a night when there are twice as many customers dining as usual. An integral part of recovery of the service dilemma is to provide both distributive and ____ in resolving the delays in getting all customers served.
Brand Repositioning (Rebranding)
A strategy in which marketers change a brand's focus to target new markets or realign the brand's core emphasis with changing market preferences.
Test Marketing
A strong predictor of product success because the firm can study actual purchase behavior, which is more reliable than a simulated test.
stockpile
A tire store finds that its business is heavily skewed to the weekend and they have less than 15% of customers on Monday through Wednesday. Sine rotating, re-balancing, and replacing tires is a service, one of the dilemmas facing the firm is that they cannot ____ the service for the weekend.
machines, such as ATMs and kiosks
A tool that is increasingly used by service providers to minimize the heterogeneity between those who deliver the service is to employ __.
Standards Gap
A type of service gap; pertains to the difference between the firm's perceptions of customers' expectations and the service standards it sets.
Critics of Lawyer or Attorney Advertising
At one time, lawyers were prohibited from advertising because such marketing seemingly would undermine the integrity of the profession. This has been repealed. Critics point to the aggressive promotions some attorneys use to prey on potential clients' vulnerabilities after they have been injured.
Jingles / Sounds
Audio messages about the brand that are composed of words or distinctive music. Examples are Intel's four-note sound signature that accompanies the Intel Inside slogan.
Purchase Risk
Because service is inseparable from its consumption __ is relatively high, service firms sometimes provide extended warranties and 100% satisfaction guarantees.
Intangible
Because services are ___, the images that marketers use must reinforce the benefit or value that a service provides.
Alpha Testing
Ben & Jerry's Ice Cream conducts ___ on all of its proposed new flavors on its own employees at its corporate headquarters in Vermont, where the employees try the new flavor.
Brand Equity Components:
Brand awareness, Perceived Value, Brand Associations, & Brand Loyalty.
What is the Difference Between Brand Extension and Line Extension?
Brand extension uses the same brand name for a new product that gets introduced into new or the same markets; increase in the breadth; example: Crest selling toothpaste, toothbrushes and mouthwash, but original product was toothpaste. Line extension is simply an increase of an existing product line by the brand; increase in depth.
Value of Branding for the Customer
Brands add value to merchandise and services in several ways: Brands facilitate purchases. Brands establish loyalty. Brands protect from competition and price competition. Brands are assets. Brands affect market value.
Brands Facilitate Purchases
Brands are often easily recognized by consumers, and because they signify a certain quality level and contain familiar attributes, brands help consumers make quick decisions, especially about their purchases. This is describing what value of branding for customers?
Private-Label Brands
Brands developed and marketed by a retailer and available only from that retailer; also called store brands.
Manufacturer Brands (National Brands)
Brands owned and managed by the manufacturer.
Concepts
Brief written descriptions of a product or service; its technology, working principles, and forms; and what customer needs it would satisfy. Might also include visual images of what the product would look like.
Inseparable
Buying a service such as a haircut, a medical treatment, or a lawyer's advice is perceived as more risky to the consumer, because of the service characteristic of __, since the service cannot really be sampled in advance not experienced without the provider.
Manufacturer Brands (National Brands)
By owning their brands ___ give more control over their marketing strategy, are able to choose the appropriate market segments and positioning for the brand and can build the brand and thereby create their own brand equity.
Late Majority
By the time the __ enters the market, sales tend to level off or may be in decline.
Use of Technology
Can be employed to reduce delivery gaps. Can provide many benefits, such as access to a wider variety of services, a greater degree of control by the customer over the services, and the ability to obtain information. Also improves the service provider's efficiency and reduces servicing costs; in some cases, it can lead to a competitive advantage over less service-oriented competitors.
Co-Branding
Can create risks, especially when the customer of each of the brands turn out to be vastly different. For example, the __ of Burger King and Häagen-Dazs failed because the customer profiles for each brand were too different. __ may also fail when there are disputes or conflicts of interest between the brands.
What are the reasons firms innovate?
Changing customer needs, market saturation, managing risk through diversity, and fashion cycles.
Brand Extension
Cheetos Lip Balm was based on the idea that if you like Cheetos, you would want to wipe it all over your lips; Colgate Kitchen Entrees were microwavable frozen dinner entrees that shared the name with the famous toothpaste Thee are examples of unsuccessful __.
Inseparable
Claire's accessory stores sell many girls their first pair of earrings along with the process of piercing their ears. the store tries to create an entire experience for the event, and both the customer and the store employee are integral to the process. Claire relies on the service attribute of __ as an opportunity to involve the customer and increase perceived value.
10%
Completely new-to-the-market products represent fewer than __ of all new product introductions each year.
Emotional Support
Concern for others' well-being and support of their decision in a job setting.
Premarket Test
Conducted before a product or service is brought to market to determine how many customers will try and then continue to use it.
Promotion
Consists of Trade promotions, introductory price promotions, and trade shows.
Service Gap Model
Consists of four service gaps: Knowledge gap, Standards gap, Delivery gap, Communication gap.
Listening to
Effective service recovery for an airline when facing a problem, such as a huge snowstorm that shuts down all flights for three days, includes resolving the dilemmas quickly, responding fairly, and __ customers and their complaints.
Support & Incentives for Employees
Employees must feel supported. First, managers should provide emotional support to service providers by demonstrating a concern for their well-being and standing behind their decisions. Second, service providers require instrumental support, the systems and equipment to deliver the service properly. Thirds, the support that managers provide must be consistent and coherent throughout the organization. Finally, a key part of any customer service program is providing rewards to employees for their excellent service.
Methods to Reduce Delivery Gaps
Empowering employees; Use of Technology; Provide Support & Incentives
Product Development
Entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and feature or service's features. Also called product design.
Panel Data
Evaluation of results occurs after the product has been launched, marketers must take a critical postlaunch review to determine whether the product and its launch were a success or failure. Many firms use __ to improve the probability of success during the test marketing phase of a new product introduction.
Delivery Gap
Even if there are no other gaps, a __ always results in a service failure.
Individual Brands
Example: while Kellogg's makes good use of the corporate branding strategy, it also allows other products, such as Morningstar Farms, Famous Amos cookies, Keebler cookies, and Cheez-Its to keep identities not readily seen under the Kellogg's umbrella.
Why is the Failure Rate for New Products so High?
Failure to assess the market properly by neglecting to do appropriate product testing, targeting the wrong segment, and/ or poor positioning. Firms may also overextend their abilities or competencies by venturing into products or services that are inconsistent with their brand image and/ or value proposition.
Slotting Allowance
Fees firms pay to retailers simply to get new products into stores or to gain more or better shelf space for their products.
Concept Testing
Firm likely start __ with exploratory research, such as in-depth interview or focus groups. After it can undertake conclusive research through Internet or mall-intercept surveys.
Depth
Firms might find it necessary to delete products within a product line to realign the firm's resources. Generally substantial investments have been made to develop and manufacture the products. Yet firms often must prune their product lines to eliminate unprofitable or low margin items and refocus their marketing efforts on their more profitable items. This is an example of a firm decreasing ___.
Brand Repositioning (Rebranding)
Firms occasionally change or update their packaging as a subtle way of ___. A change can be used to attract a new target market and/ or appear more up to date to its current market. Changes also can make consumers feel like they are receiving something tangible in return for paying higher prices, even when the product itself remains untouched. Whether true or not, consumers see new packaging and tend to think that the "new" product may be worth trying.
Breadth
Firms often add new product lines to capture new or evolving markets and increase sales. This is an example of a firm increasing ___.
Brainstorming
Firms often engage in __ sessions during which a group works together to generate ideas. One of the key characteristics of a __ session is that no idea can be immediately accepted or rejected.
Evaluation of Results
Firms perform a(n) ___. Firms can measure success of a new product by three interrelated factors: (1) its satisfaction of technical requirements, such as performance; (2) customer acceptance; and (3) its satisfaction of the firm's financial requirements, such as sales and profits.
Innovators
Firms that invest in the latest technology, either to use in their products or services or to make the firm more efficient, also are considered ___.
Research and Development (R&D)
Firms that want to be pioneers rely more extensively on __ efforts, whereas those that tend to adopt a follower strategy are more likely to scan the market for ideas.
Decline Stage
Firms with products in the __ either position themselves for a niche segment of diehard consumer or those with special needs or they completely exit the market. This is the stage where laggards enter.
Advantages to Using the Same Brand Name for New Products
First, because the brand name is already well established, the firm can spend less in developing consumer brand awareness and brand associations for the new product. It allows new products to be introduced quicker and more easily. Second, if either the original brand or the brand extension has strong consumer acceptance, that perception will carry over to the other product. Third, when brand extensions are used for complementary products, a synergy exists between the two products that can increase overall sales.
Service-Oriented Economies in Developed Countries Have Emerged for:
First, it is generally less expensive for firms to manufacture their products in less developed countries. Second, people place a high value on convenience and leisure. Third, as the world has become more complicated, people are demanding more specialized services.
What Does a Product Launch Involve?
First, on the basis of the research it has gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the firm confirms its target market (or markets) and decides how the product will be positioned. Then the firm finalizes the remaining marketing mix variables for the new product, including the marketing budget for the first year.
Brands Are Assets
For firms, brands are also assets that can be legally protected through trademarks and copyrights and thus constitute a unique form of ownership. This is describing what value of branding for customers?
Licensing
For many other scientific and technological products, firms buy the rights to use the technology or ideas from other research-intensive firms through a __ agreement.
Convenience Products/ Services
Frequently purchased commodity items, usually bought with very little thought (not willing to spend any effort to evaluate prior to purchase), such as common beverages, bread, or soap. Example of what kind of product type?
Service Quality
Good __ leads to satisfied and loyal customers.
Product Lines
Groups of associated items, such as those that consumers use together or think of as part of a group of similar products.
Consortia
Groups of other firms and institutions, possibly including government and educational institutions, to explore new ideas or obtain solutions for developing new products. In many cases __ involve pharmaceutical or high-tech members, whose research costs can run into the millions, too much for a single company to bear.
Beta Testing
Having potential consumers examine a product protoype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use.
Brands Affect Market Value
Having well-known brands can have a direct impact on the company's bottom line. The value of a company is its overall monetary worth, comprising a vast number of assets. This is describing what value of branding for customers?
Dissatisfied Customers
IF a firm promises more than it can deliver, customer expectations won't be met. An advertisement may lure a customer into a service situation once, but if the service doesn't deliver on the promise, the customer will never return. __ also are likely to tell others about the underperforming service, using word of mouth or, increasingly, the Internet, which has become an important channel for __ to vent their frustrations.
Laggards
IN some cases, __ may never adopt a certain product or service. When a film eventually shows up on their regular TV networks, they are likely to go ahead and watch it.
Product Development Process
Idea Generation -> Concept Testing -> Product Development -> Market Testing -> Product Launch -> Evaluation of Results
Lead Users
If __ customize a firm's products, other customers might wish to do so as well. Thus, studying __ helps the firm understand general market trends that might be just on the horizon.
Relative Advantage
If a product or service is perceived to be better than substitutes, then the diffusion will be relatively quick. Part of the factors that enhance the diffusion of a good or service.
Communication Gap
If firms are more realistic about the services they can provide and at the same time manage customer expectations effectively, they generally can close this gap.
IDEO
In some cases, companies have trouble moving through the steps to develop new products, so they outsource. __ offers not new products but rather a stellar service that helps clients generate new product and service ideas and industries such as health care, toys, and computers. __ employs anthropologists, graphic designers, engineers, and psychologists whose special skills help foster creativity and innovation.
Product Life Cycle
In theory, the __ curve is bell shaped with regard to sales and profits. In reality, however, each product or service category has its own individual shape; some move more rapidly through their ___ than others, depending on how different the category is from offerings currently in the market and how valuable it is to the consumer.
Associated Service (Augmented Product)
Include the nonphysical aspects of the product, such as product warranties, financing, product support, and after-sale services.
Why Change Product Line Depth?
Increase: add items to address changing consumer preferences (ex: a bank adding eChecking to appeal to online users). Decrease: to realign the firm's resources, refocus resources on the firm's more profitable products.
Early Adopters
Innovators are crucial to the success of any new product or service, though, because they help the product gain market acceptance. Through talking about and spreading positive word of mouth about the new product, they prove instrumental in bringing in the next category of ___.
2.5%
Innovators represent __ of the total market for any new product or service.
Factors Differentiating Services from Goods
Intangible, Inseparable, Heterogenous, Perishable.
Sources of Ideas
Internal R&D, R&D Consortia, Licensing, Brainstorming, Outsourcing, Competitor's products, Customer input.
Identify different sources of new product ideas.
Internal R&D, collaborate with other firms and institutions, license technology from research-intensive firms, brainstorm, research competitor's products and services, and/or conduct consumer research.
Test Marketing
Introduces a new product or service to a limited geographical area (usually a few cities) prior to a national launch.
Brand Awareness
Measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm's communications to consumers.
Intangible
Most fundamental difference between a product and service is that services are __.
Service-Product Continuum
Most offering lie somewhere in the middle and provide some service and some good (hybrid of the two)
Pioneers
Not all __ succeed. In many cases, imitators capitalize on the weakness of the __ and subsequently gain advantage in the market. Because __ and brands face the uphill task of establishing the market alone, they pave the way for followers, who can spend less marketing effort creating demand for the product line and focus directly on creating demand for their specific brand. Also, because the __ is the first product in the market, it often has less sophisticated design and may be priced relatively higher, leaving room for better and lower-priced competitive products.
Product Life Cycle
Not every product follows the ___ curve. Many products, such as home appliances stay in the maturity stage for a very long time.
Breadth
Number of product lines offered by a firm; also known as variety. Represents a count of the number of product lines offered by the firm.
Brand Dilution
Occurs when a brand extension adversely affects consumer perceptions about the attributes the core bran is believed to hold.
Brand Loyalty
Occurs when a consumer buys the same brand's product or service repeatedly over time rather than buying from multiple suppliers within the same category.
Distributive Fairness
One method to recover from a service delivery problem is to provide ____, by which customers perceive they are getting an equivalent return for the inconvenience they suffered when the service was not delivered as expected.
Nielsen BASES
One popular proprietary premarket test version is called ___. During the test, potential customers are exposed to the marketing mix variables, such as the advertising, then surveyed and given a sample of the product to try. After a period of time, they are surveyed about whether they would buy/ use the product again. This second survey provides an estimation of the probability of a consumer's repeat purchase. From this data, the firm generates a sales estimate for the new product that enables it to decide whether to introduce the product, abandon it, redesign it before introduction, or revise the marketing plan. An early evaluation of this sort, that is before the product is introduced to the whole markets, saves marketers the cost of a nationwide launch if the product fails.
Distributive Fairness
Pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss) that resulted from a service failure.
First Movers
Product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead.
Consumer Product
Products and services used by people for their personal use.
Unsought Products/ Services
Products or services consumers either do not normally think of buying or do not know about.
Specialty Products/ Services
Products or services toward which the customer shows a strong preference and for which he or she will expend considerable effort to search for the best suppliers.
Complexity and Trialability
Products that are relatively less complex and are also relatively easy to use. These products will generally diffuse more quickly and lead to greater/ faster adoption than those that are not so easy to try. Part of the factors that enhance the diffusion of a good or service.
How do sales and profits change during the various stages of the product life cycle?
Profits and sales grow until maturity and then begin to decline.
What Does a Product Launch Involve?
Promotion, Place, Price, Timing
Instrumental Support
Providing the equipment or systems needed to perform a task in a job setting.
PETA
Publicly cites companies it accuses of engaging in animal testing and other activities considered to be inhumane and praises those that do not test on animals.
Concept Testing
Reactions enable the developer to estimate the sales value of the product or service concept, possibly make changes to enhance its sales value, and determine whether the idea is worth further development. Because __ occurs very early in the new product introduction process, even before. A real product has been made, it helps the firm avoid costs of unnecessary product development.
Procedural Fairness
Refers to the customer's perception of the fairness of the process used to resolve complaints about service.
Product Mix
Reflects the breadth and depth of the company's product lines.
What are the four marketing elements that distinguish services from products?
Services are intangible, inseparable, variable, and perishable.
Slogans
Short phrases used to describe the brand or persuade consumers about some characteristics of the brand. Examples include Stat Farm's "Like A Good Neighbor" and Dunkin' Donuts' "America Runs On Dunkin."
Introductory Price Promotions
Short-term price discounts designed to encourage trial.
Heterogeneity/ Heterogeneous
Since humans' work output cannot be standardized to the same degree as the output of a machine, one substantial difference between the marketing of services and products is the ____of service delivery. For example, a restaurant is dependent on different chefs, servers, customers, and conditions within the restaurant that alter the uniformity of the output.
3%
Some estimates indicate that only about __ of new products actually succeed.
Variability
Some service providers tackle the __ issue by replacing people with machines. Examples include ATMs, and store kiosks.
Breadth
Sometimes it is necessary to delete entire product lines to address changing market conditions or meet internal strategic priorities. This is an example of a firm decreasing ___.
Customer Service
Specifically refers to human or mechanical activities firms undertake to help satisfy their customers' needs and wants. By providing good __, firms add value to their products.
Diffusion (Diffuse)
Speed with which products or services __ depends on several characteristics: Relative Advantage; Compatibility; Observability; Complexity & Trialability.
NIH (National Institutes of Health)
Sponsors medical foundations to conduct research to treat rare diseases. Is a consortia.
Maturity Stage
Stage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them.
Introduction Stage
Stage of the product life cycle when innovators start buying the product.
Brands Protect from Competition and Price Competition
Strong brands are somewhat protected from competition from other firms and price competition. Because such brands are more established in the market and have a more loyal customer base, neither competitive pressures or price nor retail-level competition is as threatening to the firm. This is describing what value of branding for customers?
Tangibles
The appearance of physical facilities, equipment, personnel, and communication materials. Part of the building blocks of service quality.
Zone of Tolerance
The area between customers' expectations regarding their desired service and the minimum level of acceptable service; that is, the difference between what the customer really wants and what he or she will accept before going elsewhere.
Empathy
The caring, individualized attention provided to customers. Part of the building blocks of service quality.
Product Mix
The complete set of all products offered by a firm.
Prototype
The first physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes, sometimes even crafted individually.
Assurance
The knowledge of and courtesy by employees and their ability to convey trust and confidence. Part of the building blocks of service quality.
Late Majority
The last group of buyers to enter a new product market; when they do, the product has achieved its full market potential.
URLs (Uniform Resource Locators) or Domain Names
The location of pages on the Internet, which often substitutes for the firm's name, such as Yahoo! and Amazon.
Market Saturation
The longer a product exists in the marketplace, the more likely it is that ___ will occur. Without new products or services, the value of the firm will ultimately decline.
Service Marketing Differs from Product Marketing
The marketing of services differs from products marketing because of four fundamental differences involved in services: services are intangible, inseparable, heterogeneous, and perishable.
Heterogeneity/ Heterogeneous
The more humans are needed to provide a service, the more likely there is to be __ or variability in the service's quality.
Augmented Product
The non-physical attributes of the product including product warranties, financing, product support, and after-sale service. Also referred to as associated services.
Associated Service
The non-physical attributes of the product including product warranties, financing, product support, and after-sale service. Also referred to as augmented product.
Primary Package
The packaging the consumer uses, such as the toothpaste tube, from which he or she typically seeks convenience in terms of storage, use, and consumption.
Actual Product
The physical attributes of a product including the brand name, features/ design, quality level, and packaging.
Co-Branding
The practice of marketing two or more brands together, on the same package or promotion; appeals to diverse segments. Example: combining restaurants together such as pizza hut, taco bell, A&W, and KFC into one store space
Innovation
The process by which ideas are transformed into new products and services that will help firms grow.
Diffusion of Innovation
The process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters.
Early Adopters
The second group of consumers in the diffusion of innovation model, after innovators, to use a product or service innovation; generally, don't like to take as much risk as innovators but instead wait and purchase the product after careful review.
Brand Equity
The set of assets and liabilities linked to a brand that add to or subtract form the value provided by the product or service.
Brand Name
The spoken component of branding, it can describe the product or service/ product characteristics and/ or be composed of words invented or derived from colloquial or contemporary language. Examples include Comfort Inn (suggests product characteristics), Apple (no association with the product), or Zillow.com (invented term).
Brand Extension
The use of the same brand name for new products being introduced to the same or new markets. IT is an increase in the product mix's breadth.
Line Extension
The use of the same brand name within the same product line and represents an increase in a products line's depth.
Responsiveness
The willingness to help customers and provide prompt service. Part of the building blocks of service quality.
Secondary Package
The wrapper or exterior carton that contains the primary package and provided the UPC label used by retail scanners; can contain additional product information that may not be available on the primary package.
Diffusion of Innovation
These purchasers can be divided into five groups under ___ curve. Innovators, Early Adopters, Early Majority, Late Majority, & Laggards.
Early Majority
This groups members do not like to take as much risk and therefore tend to wait until the bugs are worked out of a particular product or service. This group probably rents the latest movie during the first week it comes out on video. Thus, they experience little risk because all the reviews are in, and their costs are lower because they're renting the movie instead of going to the theater. When ___ customers enter the market, the number of competitors in the marketplace usually also has reached its peak, so these buyers have many price and quality choices.
Early Adopters
This market waits for the first reviews of the latest movie before purchasing a ticket, though they likely still go a week or two after it opens. They do not stand in line to grab the first Samsung LED Thin 3D TV; only after reading complaints and praises do they decide whether the new technology is worth the cost.
Early Adopters
This subgroup spreads the word of products or services. __ are crucial for bringing the other buyer categories to the market. If the ___ group is relatively small, the number of people who ultimately adopt the innovation likely will also be small.
Early Adopters
This subgroup that begins to use a product tend to enjoy novelty and often are regarded as the opinion leaders for particular product categories.
Innovators
Those buyers who want to be the first to have the new product or service. Buyers enjoy taking risks and are regarded as highly knowledgeable.
Shopping Products/ Services
Those for which consumers will spend time comparing alternatives, such as apparel, fragrances, and appliances.
Convenience Products/ Services
Those for which the consumer is not willing to spend any effort to evaluate prior to purchase.
Postpurchase Evaluation
Three outcomes: satisfaction, dissonance, and loyalty.
Managing Risk Through Diversity
Through innovation, firms often create a broader portfolio of products, which helps them to diversify their risk and enhance firm value better than a single product can. If some products in a portfolio perform poorly, other may do well. Firms with multiple products can better withstand external shocks, including changes in consumer preferences or intensive competitive activity.
Prevent Negative Consequences of Brand Extension
To __ firms consider the following: Evaluate the fit between the product class or the core brand and that of the extension. If the fit between the product categories is high, consumers will consider the extension credible, and the brand association will be stronger for the extension; Evaluate consumer perceptions of the attributes of the core brand and seek out similar attributes for the extension because brand-specific associations are very important for extensions; Firms should refrain from extending the brand name to too many products and product categories to avoid diluting the brand and damaging the brand equity; Firms should consider whether the brand extension will be distanced from the core brand, especially if the firm wants to use some but not all of the existing brand associations.
Zone of Tolerance
To define the __, firms ask a series of questions about each service quality dimension that relate to: The desired and expected level of service for each dimension, from low to high; Customers' perceptions of how well the focal service performs and how well a competitive service performs, from low to high; The importance of each service quality dimension.
Shopping Products/ Services
When people need new sneakers, for instance, they often go from store to store, trying shoes on and comparing alternatives. Consumers spend a fair amount of time making a decision. Example of what kind of product type?
Observability
When products are easily witnessed, their benefits or uses are easily communicated to others, which enhances the diffusion process. Part of the factors that enhance the diffusion of a good or service.
Packaging
Whether primary or secondary, ___ plays several key roles: It attracts the consumers' attention. It enables products to stand out from their competitors. It offers a promotional tool (e.g., "NEW" and "IMPROVED" promises on labels). Finally, it allows for the same product to appeal to different markets with different sizes, such that convenience stores stock little versions that travelers can buy at the last minute, whereas Costco sells extra-large versions of the product.
Brand Licensing
__ is common for toys, apparel, accessories, and entertainment products, such as video games. Disney uses __ in a variety of products based on their characters that are on packages in retailers. A long-standing staple of __ has been major league sports teams that play in the NBA, NFL, or NHL as well as various collegiate sports teams.
Branding
__ provides a way for a firm to differentiate its product offerings from those of its competitors.
Product
__(s) are comprised of: goods, services, places, ideas, organizations, people, communities.
Diffusion of Innovation
___ curve shows, the number of users of an innovative product or service spreads through the population over a period of time and generally follows a bell-shaped curve. A few people buy the product or service at first, then more buy, and finally fewer people buy as the degree of the diffusion slows.
75%
of a product's cost may be in the packaging.
Procedural Fairness
previously retailers offered no-questions-asked returns but have changed policies in recent years due to customers who took advantage of the policy. Since most buyers appreciate___. some electronics stores have instituted a restocking fee.
