MARK 201 Exam 3 (Pt. 2)

factors that influence future changes in services

- technology -improved understanding -social imperative for sustainability

Evaluative properties

-search (size, color) -experience (restaurant, child care) -credence (services provided by specialized professionals)

elastic demand

1% decrease in price leads to 1% or more increase in quantity demanded (% change in Q/ % change in P)

Inelasticity

1% decrease in price leads to less than !5b change in quantity demanded

five categories of product adopters

1. Innovators 2. Early Adopters 3. Early Majority 4. Late Majority 5. Laggards

3 major benefits of packaging and labeling

1. communication 2. functional (storage convenience) 3. perceptual (build brand equity)

4 main types of consumer products

1. convenience (purchased frequently) 2. shopping (makes comparison on alternatives) 3. specialty (special effort) 4. unsought (didn't know about; didn't initially want)

Test market

1.) standard 2.) controlled 3.) simulated

Oligopoly

A market structure in which a few large firms dominate a market

As Apple's CEO, the late Steve Jobs orchestrated innovations that revolutionized five different industries. Which industry below is not one of them?

Cable television

Standard test market

City is selected that is demographically representative of the markets targeted for the new product

All of the following statements about price are true except which?

For most products and services, there is an agreed upon price range set by makers

Which of the following statements is most accurate?

For some products, price influences perception of overall quality and ultimately value to consumers

Development Stage

Internal and External testing. Internal: lab tests for quality and safety external: market test exposing products to prospective consumers

protocol

Product recipe

All of the following comprise the seven Ps of services marketing except which

Profitability

objectives

Specific, short-term statements detailing how to achieve the organization's goals.

inconsistency of services refers to the fact that

The performance of one employee may vary from the performance of another employee even though they may be employed by the same firm

All of the following are true about the length of product life cycle except which?

There is no set time that a product takes to move through its life cycle

Idle production capacity affects service delivery and is defined as

a situation where a service provider is available but there is no demand for service

in marketing, an idea is

a thought that leads to a product or action

express warranty

a written guarantee

trading up (repositioning)

adding value & quality

Controlled test market

an entire test program conducted by an outside service in a market in which it can guarantee distribution

A nondurable good is defined as

an item consumed in one or a few uses

marketing metric to find weak sales

annual percentage change in unit volume by state

implied warranty

assign responsibility for product deficiencies to the manufacturer

Why can an "insignificant point of difference" lead to new-product failure?

characteristics of a product must give clear difference of unique benefits

off-peak pricing

charging different prices during different times of the day or days of the week to reflect variations in demand for the service

Internal screening

company employees evaluate the technical feasibility of new-product ideas to determine whether they meet the objectives defined in the new-product strategy development stage

consumer-driven prices

comparison from store and online

raw materials, such as grain or lumber, as well as assemblies or parts are referred to as

components

while pricing objectives frequently reflect corporate goals, pricing constraints often relate to

conditions existing in the marketplace

What kind of innovation would an electronic toothbrush be

continuous innovation; no need to learn

variable costs

costs that vary with the quantity of output produced

why do firms add new tech and automation when they increase fixed cost

creates profit beyond the Break even point because of higher production with new technology

To reduce uncertainty created by _________ properties, service consumers turn to personal sources of information such as opinion leaders, early adopters, and reference group members during the purchase decision process

credence

Sales exhibit a downward trend throughout which stage of the product life cycle?

decline

services can be classified according to whether they are

delivered by people or equipment

trading down (repositioning)

downsizing & reducing quality

External Screening

evaluation consists of preliminary concept testing of the new-product idea (not the actual product itself) using written descriptions, sketches, mockups, or promotional literature with consumers.

Services such as restaurants and childcare, have __________ properties, which can only be discerned after purchase or during consumption.

experience

shift of demand curve

factors change, pricing and substitutes

movement along the demand curve

factors stay unchanged, but price is lowered or increased

A good has tangible attributes that a consumer's __________ can perceive.

five senses

break-even point equation

fixed cost / (unit price - unit variable cost)

consumer products are classified into four categories based on the effort the consumer spends on the decision, the attributes used in making the purchase decision and the...

frequency of purchase

carrying costs

high (salaries) or low (commission)

According to the price equation, final price equals list price minus ________ plus extra fees

incentives and allowances

The interaction between a service provider and the consumer such that the two of them co-create value together is due to which element unique to services

inseparability

Four I's of Services

intangibility, inconsistency, inseparability, inventory

Commercialization

introducing a new product into the market

Advertising plays a major role in the ___________ stage of the product life cycle, and ________ plays a major role in maturity

introduction; product differentiation

advertising plays a major role in the _______ stage of the product life cycle and _______ plays a major role in the maturity

introductory; product differentiation

constraints

limit range of prices

The use of "special fees" and "surcharges" is driven by consumers' zeal for ________ combined with the ease of making price comparisons on the internet

low prices

_______ products have a life cycle that reflects benefits that are readily understood by consumers, and because the products are easily imitated by competitors, the appropriate marketing strategy is to broaden distribution quickly

low-learning

monopolistic competition

many sellers who compete on nonprice factors

pure competition

many sellers who follow the market price for identical, commodity products

capacity management

matching demand with capacity

role of product manager

modify product, modify market, reposition product

Gatorade offers a range of product offerings. The firm uses one name for all its products in a product class. Gatorade is using a __________ strategy.

multi-branding or family branding

create a new use situation

new uses for existing products

which of the following are elements involved in Step 1 of the price-setting process

objectives and constraints

pure monolopy

one seller; price is up to them

Main sources of new product ideas

open innovation: employee suggestions

During the introduction stage of the product life cycle, the strategy that discourages competitive entry by charging a low price for new product is referred to as _________ pricing

penetration

services can be classified by their delivery. Services such as management consulting, plumbing, and cleaning are considered

people-based services

Primary demand is a desire for the ________ rather than for a ________; it might be the focus of marking when there are few competitors with the same product

product class; specific brand

A concept that describes the stage a product goes through in the marketplace-- introduction, growth, maturity, and decline-- is referred to as the

product life cycle

A group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range are referred to as

product line

According to the service continuum, what are offerings such as neckties, dog food, and tailored suits

product-dominated offerings

Organizations attempt to reduce inconsistency in their services by

providing standardization and training

simulated test markets

replicates a full scale test market

low learning product

sales begin immediately because little learning is required by the consumer and the benefits of purchase are readily understood

seller driven pricing actions

seller changes online prices

intangible items such as theater performances, legal advice, or music streaming that an organization provides to consumers are referred to as

services

which type up of consumer product is purchased relatively infrequently and the purchase decision takes some time because the consumer compares offerings during the shopping experience?

shopping product

To help consumers assess and compare services, marketers try to make them tangible or __________.

show the benefits of using the service

high learning product

significant customer education is required and there is an extended introductory period

to eliminate service inconsistencies, companies rely on...

standardization; training

What is the marketing objective for the growth stage of the product life cycle

stress differentiation

All of the following marketing actions can be used by a firm to counteract barriers to product adoption except which?

targeting new consumers

Price refers to

the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service

break-even point

the point at which the costs of producing a product equal the revenue made from selling the product

Profit=

total revenue - total cost or (unit price X quantity sold)-(fixed+variable)

if a consumer is reluctant to try a new product because he'd have to change his normal everyday behaviors, the company introducing it most likely is facing a _______ barrier

usage

New product strategy development

using SWOT analysis and environmental scanning it defines the role for a new product in terms of the firm's overall objectives

The ratio of perceived benefits to price is referred to as

value