marketing exam 2
It can differentiate along the lines of product, services, channels, people, or image.
In what specific ways can a company differentiate itself or its market offer?
Organization marketing
consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization.
people differentiation
hiring and training better people than their competitors do
product attribute
For example, Whirlpool can position its major home appliance products on attributes such as quality, selection, style, and innovative features.
Greater service value
More effective and efficient customer value creation, engagement, and service delivery, which results in . . .
operating supplies (lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, brooms).
Supplies include
Customer value-based pricing
Which of the following refers to setting prices based on buyers' perception of value rather than on the seller's cost?
augmented product
around the core benefit and actual product by offering additional consumer services and benefits
target market
consists of a set of buyers who share common needs or characteristics that a company decides to serve
Person marketing
consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people.
style
is a basic and distinctive mode of expression
Design
is a larger concept than style.
Growth
is a period of rapid market acceptance and increasing profits.
quantity discount
is a price reduction to buyers who buy large volumes.
Market-penetration pricing
A company has set a low price on a new product it introduced. It wants to maximize its market share and attract a large number of buyers quickly. Which new product pricing strategy should the company use?
Customer service
A company's offer usually includes some support services, which can be a minor part or a major part of the total offering.
Perceptual positioning map
A manufacturer of half-ton pickup trucks creates a positioning map for the U.S. half-ton pickup market. The position of each circle on the map indicates the brand's perceived positioning on two dimensions: price and orientation (economy versus performance). The size of each circle indicates the brand's relative market share. This is an example of a _____.
Convenience products
Examples include laundry detergent, candy, magazines, and fast food.
Product mix width
For example, Colgate markets a fairly wide product mix, consisting of dozens of brands that constitute the "Colgate World of Care"—products that "every day, people like you trust to care for themselves and the ones they love."
Co-branding
For example, Google partnered with Oreo to name a latest version of its Android operating system Android Oreo, creating a fun association with great buzz value for both brands.
brand extension
For example, Google-owned Nest—which began as a maker of stylish, connected, learning thermostats that can be controlled remotely by phone—has extended its line with a host of smart and stylish smart-home products, including a smoke and carbon monoxide alarm, home monitoring cameras, a home security alarm system, and a video doorbell that lets you know who's calling.
optional-product pricing
For example, a car buyer may choose to order a navigation system and premium entertainment system.
by-product pricing
For example, cheese makers in Wisconsin have discovered a use for their leftover brine, a salt solution used in the cheese-making process. Instead of paying to have it disposed of, they now sell it to local city and county highway departments, which use it in conjunction with salt to melt icy roads.
product bundle pricing
For example, fast-food restaurants bundle a burger, fries, and a soft drink at a "combo" price.
Line extensions
For example, over the years, KFC has extended its "finger lickin' good" chicken lineup well beyond original recipe, bone-in Kentucky fried chicken. It now offers grilled chicken, boneless fried chicken, chicken tenders,
Service intangibility
For example, people undergoing cosmetic surgery cannot see the result before the purchase.
Service variability
For example, some hotels—say, Marriott—have reputations for providing better service than others. Still, within a given Marriott hotel, one registration-counter employee may be cheerful and efficient, whereas another standing just a few feet away may be grumpy and slow.
style
For example, styles appear in homes (colonial, ranch, transitional), clothing (formal, casual), and art (realist, surrealist, abstract).
fashion
For example, the more formal "business attire" look of corporate dress of the 1980s and 1990s gave way to the "business casual" look of the 2000s and 2010s.
courts, employment services, hospitals, military services, police and fire departments, the postal service, and schools.
Governments offer services through
product development
Here, R&D or engineering develops the product concept into a physical product.
Service inseparability
If a service employee provides the service, then the employee becomes a part of the service. And customers don't just buy and use a service; they play an active role in its delivery.
inelastic
If demand hardly changes with a small change in price, we say demand is
good-value pricing
In many cases, this has involved introducing less-expensive versions of established brand name products or new lower-price lines.
buildings (factories, offices) and fixed equipment (generators, drill presses, large computer systems, elevators
Installations consist of major purchases such as
product attributes, desirable benefit, strong beliefs and value
Marketers need to position their brands clearly in target customers' minds.
Usage rate
Markets can also be segmented into light, medium, and heavy product users
User status
Markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product
Satisfied and productive service employees
More satisfied, loyal, and hardworking employees, which results in . . .
Geographic
Munoz Specialty Foods groups its customers by regions in the United States, such as Midwest, Northeast, and Southwest. For each region, Munoz creates a different set of advertisements and promotions. On which of the following segmentation variables does the firm divide its market?
Value-added pricing
New premium movie theaters offer features such as online reserved seating, high-backed leather executive chairs with armrests and footrests, the latest in digital sound, super-wide screens, and other amenities for which they charge a higher price. This is an example of which type of pricing?
Product quality
Quality affects product or service performance; thus, it is closely linked to customer value and satisfaction.
value-added pricing
Rather than cutting prices to match competitors, they add quality, services, and value-added features to differentiate their offers and thus support their higher prices.
market-penetration pricing
Rather than setting a high initial price to skim off small but profitable market segments, some companies use, Companies set a low initial price to penetrate the market quickly and deeply—to attract a large number of buyers quickly and win a large market share.
An indicator of quality
Roshika has been invited to a fancy dinner party and wanted to bring a good bottle of wine as a gift for the host. Since she does not know much about wine, she will likely use the price of the wines as____.
Good-value pricing
Sadie's restaurant has listened to its customers over the years and is now able to offer the right combination of quality and good services at a fair price. Which pricing strategy is Sadie's using?
Satisfied and loyal customers.
Satisfied customers who remain loyal, make repeat purchases, and refer other customers, which results in . .
by having more able and reliable customer-contact people, developing a superior physical environment in which the service product is delivered, or designing a superior delivery process.
Service companies can differentiate their service delivery
They want to increase their service differentiation, service quality, and service productivity.
Service companies face three major marketing tasks
product lines upward
Sometimes, companies stretch upward to add prestige to their current products or to reap higher margins
marketing strategy statement
The first part describes the target market; the planned value proposition; and the sales, market-share, and profit goals for the first few years. The second part of the marketing strategy statement outlines the product's planned price, distribution, and marketing budget for the first year: The third part of the marketing strategy statement describes the planned long-run sales, profit goals, and marketing mix strategy:
income segmentation
The marketers of products and services such as automobiles, clothing, cosmetics, financial services, and travel have long used
price and orientation
The position of each circle on the map indicates the brand's perceived positioning on two dimensions:
demand curve
The relationship between the price charged and the resulting demand level is shown in the
Price discrimination
The robinson-patman act seeks to ensure that sellers offer the same price terms to customers at a given level of trade to prevent _____.
actual product.
They need to develop product and service features, a design, a quality level, a brand name, and packaging.
positioning statement
To (target segment and need) our (brand) is (concept) that (point of difference).
Understanding its consumers, markets, and competitors, and develop products that deliver superior value to customers
To create successful new products, a company must _____?
team-based new product development approach
Under this approach, company departments work closely together in cross-functional teams, overlapping the steps in the product development process to save time and increase effectiveness.
freight-absorption pricing
Using this strategy, the seller absorbs all or part of the actual freight charges to get the desired business. The seller might reason that if it can get more business, its average costs will decrease and more than compensate for its extra freight cost. Freight-absorption pricing is used for market penetration and to hold on to increasingly competitive markets.
differentiation (what makes the brand stand out), relevance (how consumers feel it meets their needs), knowledge (how much consumers know about the brand), and esteem (how highly consumers regard and respect the brand).
Valuator measures brand strength along four consumer perception dimensions
Promotional
When a retailer temporarily prices a few select items below cost to create excitement and pull consumers into the store, it is practicing ______ pricing.
What is the buyer really buying?
When designing products, marketers must first define the core, problem-solving benefits, services, or experiences that consumers seek.
Unique selling proposition
When marketers aggressively promote only one benefit to the target market, the benefit promoted is known as the product or service's _____.
concentrated marketing
When the firm's resources are limited
Positioning
Which of the following describes the process of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers?
Innovation can be very expensive and very risky
Which of the following statements about new products development strategy is correct?
Modified and improved products are considered new
Which of the following statements concerning new products is correct?
Winning large market share
______ is one major objective associated with a market-penetration pricing strategy.
crowdsourcing
a company invites broad communities of people—customers, employees, independent scientists and researchers, and even the public at large—into the innovation process.
undifferentiated marketing (or mass marketing) strategy
a firm might decide to ignore market segment differences and target the whole market with one offer.'
time-based pricing
a firm varies its price by the season, the month, the day, and even the hour. For example, movie theaters charge matinee pricing during the daytime, and resorts give weekend and seasonal discounts.
discount
a price reduction to buyers who pay their bills promptly.
PLC concept can describe
a product class (gasoline-powered automobiles), a product form (SUVs), or a brand (the Ford Escape
cost-plus pricing (or markup pricing
adding a standard markup to the cost of the product
dynamic pricing
adjusting prices continually to meet the characteristics and needs of individual customers and situations.
business organizations offer services
airlines, banks, hotels, insurance companies, consulting firms, medical and legal practices, entertainment and telecommunications companies, real estate firms, retailers, and others.
private brand
also called a store brand
Services
are a form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.
Allowances
are another type of reduction from the list price.
Convenience products
are consumer products and services that customers usually buy frequently, immediately, and with minimal comparison and buying effort.
Specialty products
are consumer products and services with unique characteristics or brand identifications for which a significant group of buyers is willing to make a special purchase effort
Unsought products
are consumer products that a consumer either does not know about or knows about but does not normally consider buying.
Fixed costs
are costs that do not vary with production or sales level.
Capital item
are industrial products that aid in the buyer's production or operations, including installations and accessory equipment.
Shopping products
are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style.
Consumer products
are products and services bought by final consumers for personal consumption
Fads
are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
Total cost
are the sum of the fixed and variable costs for any given level of production
Industrial products
are those products purchased for further processing or for use in conducting a business.
Offering the same for less
can be a powerful value proposition—everyone likes a good deal.
Market targeting (or targeting)
consists of evaluating each market segment's attractiveness and selecting one or more market segments to enter.
social marketing
consists of using traditional business marketing concepts and tools to encourage behaviors that will create individual and societal well-being.
marketing strategy development
designing an initial marketing strategy for introducing this car to the market.
customer-segment pricing
different customers pay different prices for the same product or service. For example, museums, movie theaters, and retail stores may charge lower prices for students, people in the military, and senior citizens.
Behavioral segmentation
divides buyers into segments based on their knowledge, attitudes, uses, or responses to a product.
Demographic segmentation
divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation.
The Consumer Product Safety Act of 1972
established the Consumer Product Safety Commission, which has the authority to ban or seize potentially harmful products and set severe penalties for violation of the law
Zone pricing
falls between FOB-origin pricing and uniform-delivered pricing. The company sets up two or more zones. All customers within a given zone pay a single total price; the more distant the zone, the higher the price
channel differentiation
gain competitive advantage through the way they design their channel's coverage, expertise, and performance
geographic location
grouping countries by regions such as Western Europe, the Pacific Rim, South Asia, or Africa
Safety legislation
has been passed to regulate fabrics, chemical substances, automobiles, toys, and drugs and poisons.
Gender segmentation
has long been used in marketing clothing, cosmetics, toiletries, toys, and magazines.
Product classes
have the longest life cycles; the sales of many product classes stay in the mature stage for a long time.
customer equity
he value of customer relationships that the brand creates.
The Federal Trade Commission Act of 1914
held that false, misleading, or deceptive labels or packages constitute unfair competition.
value proposition
how it will create differentiated value for targeted segments and what positions it wants to occupy in those segments.
price elasticity
how responsive demand will be to a change in price.
modifying the marketing mix
improving sales by changing one or more marketing mix elements.
Consumer products
include convenience products, shopping products, specialty products, and unsought products.
Business services
include maintenance and repair services (window cleaning, computer repair) and business advisory services (legal, management consulting, advertising).
Materials and parts
include raw materials as well as manufactured materials and parts.
Micromarketing
includes local marketing and individual marketing.
concentrated marketing (or niche marketing) strategy
instead of going after a small share of a large market, a firm goes after a large share of one or a few smaller segments or niches.
Product line filling
involves adding more items within the present range of the line
Market segmentation
involves dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes.
More-for-more positioning
involves providing the most upscale product or service and charging a higher price to cover the higher costs.
Competition-based pricing
involves setting prices based on competitors' strategies, costs, prices, and market offerings.
Cost-based pricing
involves setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for the company's effort and risk.
Local marketing
involves tailoring brands and promotions to the needs and wants of local customers.
fashion
is a currently accepted or popular style in a given field
product concept
is a detailed version of the idea stated in meaningful consumer terms.
product line
is a 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.
Introduction
is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses
Maturity
is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.
seasonal discount
is a price reduction to buyers who buy merchandise or services out of season.
Total quality management (TQM)
is an approach in which all the company's people are involved in constantly improving the quality of products, services, and business processes.
product idea
is an idea for a possible product that the company can see itself offering to the market.
Undifferentiated marketing
is more suited for uniform products, such as grapefruit or steel
Brand equity
is the differential effect that knowing the brand name has on customer response to the product and its marketing.
Uniform-delivered pricing
is the opposite of FOB pricing. Here, the company charges the same price plus freight to all customers, regardless of their location.
Micromarketing
is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and local customer segments
Mass customization
is the process by which firms interact one to one with masses of customers to design products, services, and marketing programs tailor-made to individual needs.
Brand value
is the total financial value of a brand.
product position
is the way a product is defined by consumers on important attributes—the place the product occupies in consumers' minds relative to competing products.
product image
is the way consumers perceive an actual or potential product.
Unsought products
life insurance, preplanned funeral services, and blood donations to the Red Cross.
Service inseparability
means that services cannot be separated from their providers, whether the providers are people or machines.
Service perishability
means that services cannot be stored for later sale or use.
Value-based pricing
means that the marketer cannot design a product and marketing program and then set the price.
Service variability
means that the quality of services depends on who provides them as well as when, where, and how they are provided.
Internal marketing
means that the service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction.
Product line stretching
occurs when a company lengthens its product line beyond its current range.
good-value pricing
offering the right combination of quality and good service at a fair price
Multibranding
offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share.
sequential product development approach
one company department works individually to complete its stage of the process before passing the new product along to the next department and stage.
reference prices
prices that buyers carry in their minds and refer to when looking at a given product.
optional-product pricing
pricing optional or accessory products along with the main product.
Benefit segmentation
requires finding the major benefits people look for in a product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit.
The Nutritional Labeling and Educational Act of 1990
requires sellers to provide detailed nutritional information on food products, and recent sweeping actions by the Food and Drug Administration (FDA) regulate the use of health-related terms such as low fat, light, high fiber, and organic.
target costing
reverses the usual process of first designing a new product, determining its cost, and then asking, "Can we sell it for that?" Instead, it starts with an ideal selling price based on customer value considerations and then targets costs that will ensure that the price is met
The Robinson-Patman Act
seeks to prevent unfair price discrimination by ensuring that sellers offer the same price terms to customers at a given level of trade.
psychological pricing
sellers consider the psychology of prices, not simply the economics. For example, consumers usually perceive higher-priced products as having higher quality.
predatory pricing
selling below cost with the intention of punishing a competitor or gaining higher long-run profits by putting competitors out of business.
Product forms
tend to have the standard PLC shape, such as dial telephones, VHS tapes, and film cameras passed through a regular history of introduction, rapid growth, maturity, and decline. The PLC conc
perceptual positioning maps
that show consumer perceptions of their brands versus those of competing products on important buying dimension
segmented pricing
the company sells a product or service at two or more prices, even though the difference in prices is not based on differences in costs.
modifying the market
the company tries to increase consumption by finding new users and new market segments for its brands
value proposition
the full mix of benefits on which a brand is differentiated and positioned.
pure competition
the market consists of many buyers and sellers trading in a uniform commodity, such as wheat, copper, or financial securities. No single buyer or seller has much effect on the going market price., marketing research, product development, pricing, advertising, and sales promotion play little or no role. Thus, sellers in these markets do not spend much time on marketing strategy.
basing-point pricing
the seller selects a given city as a "basing point" and charges all customers the freight cost from that city to the customer location, regardless of the city from which the goods are actually shipped.
test marketing
the stage at which the product and its proposed marketing program are tested in realistic market settings.
idea generation
the systematic search for new product ideas.
FOB-origin pricing
this practice means that the goods are placed free on board (hence, FOB) a carrier.
return-on-quality approach
viewing quality as an investment and holding quality efforts accountable for bottom-line results.
new products
we mean original products, product improvements, product modifications, and new brands that the firm develops through its own product development.
service profit chain
which links service firm profits with employee and customer satisfaction
Fair Packaging and Labeling Act of 1966
which set mandatory labeling requirements, encouraged voluntary industry packaging standards, and allowed federal agencies to set packaging regulations in specific industries.
Internal service quality
Superior employee selection and training, a quality work environment, and strong support for those dealing with customers, which results in . . .
materials and parts, capital items, and supplies and services
The three groups of industrial products and services are
Behavioral segmentation
Which of the following describes the process of dividing markets into groups based on consumers' knowledge, attitudes, uses, or responses?
Product line depth
refers to the number of versions offered of each product in the line.
R-W-W
("real, win, worth doing")
It can introduce line extensions, brand extensions, multibrands, or new brands.
A company has four choices when it comes to developing brands
intangibility, inseparability, variability, and perishability
A company must consider four special service characteristics when designing marketing programs:
Services differentiation
Amazon is now promising same-day pick-up of goods as well as local secure pick-up points. What point of differentiation is this?
Fad
An example is the fidget spinner—the small, three-pronged ball-bearing device that you flick and spin to relieve stress or just because it's fun to do.
Affordable
Buyers can afford to pay for the difference.
Occasion segmentation
Buyers can be grouped according to occasions when they get the idea to buy, actually make their purchases, or use the purchased items
differentiated marketing (or segmented marketing) strategy
By offering product and marketing variations to segments, companies hope for higher sales and a stronger position within each market segment.
Product mix length
Colgate carries several brands within each line.
distributors and suppliers can contribute ideas.
Companies can also obtain good new product ideas from any of a number of external sources.
image differentiation
Even when competing offers look the same, buyers may perceive a difference based on company or brand
Shopping products
Examples include furniture, clothing, major appliances, and hotel services
Demographic
Heeltoe, a boutique that caters to the footwear needs of women, manufactures two different lines of footwear based on the purchasing power of its customers. One product line caters to the needs of affluent, middle-aged women, and the other line targets younger professionals and homemakers. Heeltoe most likely segments the consumer market based on _____ variables.
component materials (iron, yarn, cement, wires) and component parts (small motors, tires, castings).
Manufactured materials and parts consist of
market-skimming pricing (or price skimming)
Many companies that invent new products set high initial prices to skim revenues layer by layer from the market. Apple frequently uses this strategy,
Healthy service profits and growth
Superior service firm performance.
Profitable
The company can introduce the difference profitably
Important
The difference delivers a highly valued benefit to target buyers.
Communicable
The difference is communicable and visible to buyers
Superior.
The difference is superior to other ways that customers might obtain the same benefit
identifying a set of differentiating competitive advantages on which to build a position, choosing the right competitive advantages, and selecting an overall positioning strategy.
The differentiation and positioning task consists of three steps
Product line depth
Then each variety comes in its own special forms and formulations. For example, you can buy Colgate Total in regular, clean mint, advanced whitening, deep clean, total daily repair, 2in1 liquid gel, or any of several other versions.
quality, features, and style and design
These benefits are communicated and delivered by product attributes such as
collect, review, evaluate, and manage new product ideas.
a company can install an innovation management system to
product
as anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
Product development
begins when the company finds and develops a new product idea
product differentiation
brands can be differentiated on features, performance, or style and design
Geographic segmentation
calls for dividing the market into different geographical units, such as nations, regions, states, counties, cities, or even neighborhoods.
Concept testing
calls for testing new product concepts with groups of target consumers
Cultural factors
can also be used, grouping markets according to common languages, religions, values and attitudes, customs, and behavioral patterns.
product mix (or product portfolio)
consists of all the product lines and items that a particular seller offers for sale.
Positioning
consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
Psychographic segmentation
divides buyers into different segments based on lifestyle or personality characteristics.
Interactive marketing
means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter.
Service intangibility
means that services cannot be seen, tasted, felt, heard, or smelled before they are bought.
Product mix length
refers to the total number of items a company carries within its product lines.
product bundle pricing
sellers often combine several products and offer the bundle at a reduced price.
monopolistic competition
the market consists of many buyers and sellers trading over a range of prices rather than a single market price. A range of prices occurs because sellers can differentiate their offers to buyers. Because there are many competitors, each firm is less affected by competitors' pricing strategies than in oligopolistic markets. Sellers try to develop differentiated offers for different customer segments and, in addition to price, freely use branding, advertising, and personal selling to set their offers apart
product line length
the number of items in the product line
functional discount (trade discount)
to trade-channel members who perform certain functions, such as selling, storing, and record keeping
Customer value-based pricing
uses buyers' perceptions of value as the key to pricing.
Variable costs
vary directly with the level of production
width, length, depth, and consistency.
A company's product mix has four important dimensions
fixed-price policy
setting one price for all buyers—is a relatively modern idea that arose with the development of large-scale retailing at the end of the nineteenth century.
political and legal factors
such as the type and stability of government, receptivity to foreign firms, monetary regulations, and amount of bureaucracy.
by-product pricing
the company seeks a market for these by-products to help offset the costs of disposing of them and help make the price of the main product more competitive.
idea screening
which helps spot good ideas and drop poor ones as soon as possible.
Specialty products
Examples include specific brands of cars, high-priced photography equipment, designer clothes, gourmet foods, and the services of medical or legal specialists.
captive-product pricing
Examples of captive products are razor blade cartridges, video games, printer cartridges, single-serve coffee pods, and e-books. Producers of the main products (razors, video-game consoles, printers, single-cup coffee brewing systems, and tablet computers) often price them low and set high markups on the supplies.
Location-based pricing
When a college or university charges more for out-of-state students, it is practicing ____.
Spend a lot of money on product improvements, promotion, and distribution
Which of the following would be an appropriate strategy during the growth stage of the product life cycle?
Maturity
Which stage of the PLC is characterized by peak sales, low costs per customer, high profits, mainstream adopters, and a stable number of competitors that are beginning to decline?
Maturity
Which stage of the product life cycle normally lasts longer than the other and poses great challenges to marketing management?
product development
__________ is the step of the new product development process during which physical product is first developed
location-based pricing
a company charges different prices for different locations, even though the cost of offering each location is the same. For instance, state universities charge higher tuition for out-of-state students, and theaters vary their seat prices because of audience preferences for certain locations.
acquisition
by buying a whole company, a patent, or a license to produce someone else's product.
modifying the product
changing characteristics such as quality, features, style, packaging, or technology platforms to retain current users or attract new ones.
promotional pricing
companies will temporarily price their products below list price—and sometimes even below cost—to create buying excitement and urgency
Raw materials
consist of farm products (wheat, cotton, livestock, fruits, vegetables) and natural products (fish, lumber, crude petroleum, iron ore).
product form pricing
different versions of the product are priced differently but not according to differences in their costs. New York to London might cost $1,100, whereas a business-class seat on the same flight might cost $6,500 or more.
Customer-centered new product development
focuses on finding new ways to solve customer problems and create more customer-satisfying experiences.
conformance quality
freedom from defects and consistency in delivering a targeted level of performance
commercialization
introducing the new product into the market—it will face high costs.
Business analysis
involves a review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's objectives.
Place marketing
involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places.
Differentiation
involves actually differentiating the firm's market offering to create superior customer value.
brand
is a name, term, sign, symbol, or design or a combination of these that identifies the maker or seller of a product or service.
hyperlocal social marketing
location-based targeting to consumers in local communities or neighborhoods using digital and social media.
product line pricing
management must determine the price steps to set between the various products in a line
national brand
manufacturer's brand
A fad
n the early 1970s, Gary Dahl sold Pet Rocks. The product had a short, temporary period of unusually high sales driven by consumer enthusiasm and immediate product popularity, but then sales declined very quickly. The PLC sales pattern for Pet Rocks is known as?
controlled test markets
new products and tactics are tested among controlled panels of shoppers and stores.
Line extensions
occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category.
Deceptive pricing
occurs when a seller states prices or price savings that mislead consumers or are not actually available to consumers.
Co-branding
occurs when two established brand names of different companies are used on the same product.
age and life-cycle segmentation
offering different products or using different marketing approaches for different age and life-cycle groups.
product life cycle (PLC)
product development, introduction, growth, maturity, decline
consistency of the product mix
refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way
Product mix width
refers to the number of different product lines the company carries.
simulated test markets,
researchers measure consumer responses to new products and marketing tactics in laboratory stores or simulated online shopping environments.
through symbols and branding.
Finally, service companies also can work on differentiating their image
elastic
If demand changes greatly, we say the demand is
target costing
Many firms support such price-positioning strategies with a technique called
differentiated marketing (or segmented marketing) strategy
a firm decides to target several market segments and designs separate offers for each
brand extension
extends a current brand name to new or modified products in a new category
Decline
is the period when sales fall off and profits dro
intermarket segmentation (also called cross-market segmentation)
marketers form segments of consumers who have similar needs and buying behaviors even though they are located in different countries.
The Federal Food, Drug, and Cosmetic Ac
protects consumers from unsafe and adulterated food, drugs, and cosmetics
Labels and logos
range from simple tags attached to products to complex graphics that are part of the packaging
Style
simply describes the appearance of a product
concentrated marketing (or niche marketing) strategy
t can market more effectively by fine-tuning its products, prices, and programs to the needs of carefully defined segments. It can also market more efficiently, targeting its products or services, channels, and communications programs toward only consumers that it can serve best and most profitably.
individual marketing
tailoring products and marketing programs to the needs and preferences of individual customers.
oligopolistic competition
the market consists of only a few large sellers. For example, only a handful of providers—Comcast, Spectrum, AT&T, and Dish Network—control a lion's share of the cable/satellite television market. Because there are few sellers, each seller is alert and responsive to competitors' pricing strategies and marketing moves. In the battle for subscribers, price becomes a major competitive tool. For example, to woo customers away from competitors, they offers special discounts, free equipment upgrades, and lock-in prices
pure monopoly
the market is dominated by one seller. The seller may be a government monopoly (the U.S. Postal Service), a private regulated monopoly (a power company), or a private unregulated monopoly (De Beers and diamonds). Pricing is handled differently in each case.
performance quality
the product's ability to perform its functions.
economic factors
world markets can also be segmented based on
important, distinctive, superior, communicable, preemptive, affordable, profitable
A difference is worth establishing to the extent that it satisfies the following criteria
-Loyalty status
A market can also be segmented by consumer loyalty
captive-product pricing
Companies that make products that must be used along with a main product are using
Preemptive
Competitors cannot easily copy the difference
Distinctive
Competitors do not offer the difference, or the company can offer it in a more distinctive way
Dynamic pricing
Continually adjusting prices to meet the characteristics and needs of individual customers and situations is known as _____.
Idea generation
Crowdsourcing is used in the ______ step of the new product development process.
targeting
Once segments have been identified, market _____ evaluates each segment's attractiveness and selects one or more to serve
through museums, charities, churches, colleges, foundations, and hospitals.
Private not-for-profit organizations offer services
level and consistency.
Product quality has two dimensions
consumer products and industrial products.
Products and services fall into two broad classes based on the types of consumers who use them
competitive advantage.
To the extent that a company can differentiate and position itself as providing superior customer value, it gains
portable factory equipment and tools (hand tools, lift trucks) and office equipment (computers, fax machines, desks).
Accessory equipment includes
Business analysis
After market strategy is developed, the next step of the new product development process is _____?
Market segmentation
Dividing a market into smaller segments of buyers with distinct needs or behaviors that might require separate marketing strategies is known as?
Psychographic
Dividing buyers into groups based on social class, lifestyle, or personality characteristics is called _____ segmentation
Many companies have developed successful internal social networks and intrapreneurial programs that encourage employees to develop new product ideas
For example, AT&T has set up an internal online innovation community called The Innovation Pipeline (TIP), through which AT&T employees from all areas and levels of the company submit, discuss, and vote on new product and service ideas.
Service perishability
Some doctors charge patients for missed appointments because the service value existed only at that point and disappeared when the patient did not show up.
desirable benefit.
Thus, Whirlpool can go beyond technical product attributes and talk about benefits such as taking the hassle out of cooking and cleaning, better energy savings, or more stylish kitchens.
Packaging
involves designing and producing the container or wrapper for a product.