MKTG 304 Exam 3

New-product development process

A seven-phase process for introducing products: Idea generation Screening Concept testing Business analysis Product development Test marketing Commercialization

Brand licensing

An agreement whereby a company permits another organization to use its brand on other products for a licensing fee

Experience qualities

Attributes that can be assessed only during purchase and consumption of a service

Credence qualities

Attributes that customers may be unable to evaluate even after purchasing and consuming a service

Brand Equity

Brand loyalty - A customer's favorable attitude toward a specific brand • There are three degrees/levels of brand loyalty: • Brandrecognition-acustomerisawarethatabrandexistsandviewsthebrandasanalternative purchase if their preferred brand is unavailable • Brand preference-a customer prefers one brand over competitive offerings• Brand insistence-The degree of brand loyalty in which a customer strongly prefers a specific brand and will accept no substitute.

Inseparability

Cannot separate production of the service from its consumption

Product modification

Changes in one or more characteristics of a product• Differs from a line extension in that the original product does not remain in the product line • Certain conditions must exist for the modification for work • Customers must be able to perceive that a modification has been made • Modificationshouldenhancecustomersatisfaction

Which of the following statements does NOT apply to convenience goods?

Consumers are brand loyal to convenience products and are not likely to substitute other brands.

Service quality

Customers' perceptions of how well a service meets or exceeds their expectations

Product development

Determining if producing a product is technically feasible and cost-effective • To test its acceptability, the idea or concept is converted into a prototype, or working model, and overall functioning ▶ Its performance, safety, convenience, and other functional qualities are tested both in a laboratory and in the field

Which of the following statements about labeling is false?

Labels do not have to disclose nutritional information.

The annual Consumer Reports rating of your company's flagship product was just released. Generally speaking the rating was good but not great. Based on the consumer comments that were referenced in the rating, it appears that many consumers have a negative view of the product's convenience and safety attributes. In order to address these consumer concerns your company should consider doing which of the following?

Make functional modifications to the product.

• Depth of product mix

The average number of different products in each product line

Search qualities

Tangible attributes that can be judged before the purchase of a product

Of the following choices, which would be the easiest brand name to legally protect?

Tarzink Yogurt

Which of the following issues is least important in using co-branding effectively?

The brands involved should be owned by different companies.

Intangibility

The characteristic that a service is not physical and cannot be perceived by the senses (More abstract, harder to grasp and/or to visualize

Perishability (inventory)

The inability of unused service capacity to be stored for future use Services cannot be stored or held in inventory for sale at a later time • If not used when available, they "go to waste". ifficult to balance supply and demand

Width of product mix

The number of product lines a company offers

Product life cycle

The progression of a product through four stages

Co-branding

Using two or more brands on one product Effective co-branding capitalizes on the trust and confidence customers have in the brands involved

Private distributor brands are owned by

wholesalers or retailers.

Product Deletion

A systematic review allows an organization to improve product performance and ascertain when to delete products There are three basic ways to delete a product: Phase-out - Allows a product to decline without a change in the marketing strategy Run-out - Exploits any strengths left in the product Immediate drop - Used when losses are too great to prolong the product's life

Product mix

The total group of products that an organization makes available to customers

If Saluki School Furniture Company provides standard primary school chairs in new colors to match the interiors of schools, this modification is most likely to be viewed as a(n) ____ modification.

aesthetic

The three major ways to modify a product include

aesthetic, quality, and functional changes

Service

an intangible product that involves a deed, a performance, or an effort that cannot be physically performed

Heterogeneity

ariation in quality of service provided Goods are produced by machines = they are identical or standardized. Services are (usually) produced by human beings = difficult to maintain a consistent quality of service delivery due to human nature

When Marvel characters appear on apparel made by another company, this would be an example of

brand licensing.

Darlene loves going shopping. After a long day at work, she stops by a local shopping center. First, she decides to stop by Barnes & Noble. Darlene's favorite bookshop is the small, locally-owned bookshop close to her home, but she visits Barnes & Noble because it is convenient. Next, she stops by a local Starbucks, where she likes to try new things. When she looked at the menu, she saw the name of a new latte she had heard about from friends and decided to try it. Then she went to Ulta to pick up some lipstick that she has run out of. However, when she gets there, Darlene finds Ulta is out of her lipstick brand and color. She is tired after her long day and annoyed that they are out of the lipstick. Because it is her favorite brand, Darlene decides she will just have to come back another day. Darlene displays ______________ for Barnes & Noble, _____________ for the latte at Starbucks, and ________________ for the lipstick.

brand preference; brand recognition; brand insistence

When a product tries to capitalize on the brand equity of two separate brands, marketers are using

co-branding

Jonah is a member of a consumer panel consisting of about 30 people. The consumer panel has been introduced to a company's new idea for energy drinks. Some of the questions panel members have been asked are "How often would you buy this product?" and "Which features are of little or no interest to you?" Jonah is most likely participating in the ___ phase of the new-product development process.

concept testing

Millie's Cookie House sells cookies, pastries, and muffins. She offers 30 different types of cookies, 20 different types of pastries, and 10 types of muffins. While not all of these are available in-store, customers can special order or have the baked goods catered. The depth of the product mix that Millie's offers is ______________, while the width of the product mix is ___________________.

deep; narrow

A run-out policy of product deletion

exploits any strengths left in the product.

Labeling is used to perform only two roles: to promote and to inform.

false

The Federal Trade Commission is solely responsible for establishing and enforcing packaging regulations.

false

To try to be creative in developing a label is not worth the effort; most people prefer products to be labeled only with the brand name and relevant consumer information.

false

Introduction stage

first appearance in the marketplace, when sales start at zero and profits are negative The initial product price may have to be high to recoup expensive marketing research or development costs, which can depress sales

During the growth stage of the product life cycle, marketers must

fortify/strengthen the product position.

A product that is simply labeled with the product category is considered a

generic brand.

The manager at an engine manufacturer has asked a venture team to develop a more improved version of its most popular engine. Currently, the members of the venture team are brainstorming ways to improve the engine so that it better serves its target market. It decides to send customers surveys asking them what features they would like to see in a new engine. The venture team is most likely in the _________________ stage of product development.

idea generation

Harry is an athlete who plays a variety of sports that all require various athletic shoes. He has a favorable attitude toward Under Armour shoes. This favorable attitude is called brand

loyalty

During the introduction stage of a successful product, profits are usually

negative and increasing.

Product deletion can best be described as the process of deleting a product from the product mix when it

no longer satisfies a sufficient number of customers.

Madison is a graphic artist who is currently working on the development of a new container for mustard and mayonnaise. She is also developing its graphic design. Madison is likely working on the product's

packaging

Marketers begin to make decisions about labeling, packaging, branding, pricing, and promotion during

product development.

The decisions and activities intended to create and maintain a certain concept of the firm's product, relative to competitive brands, in customers' minds is

product positioning.

Gain liquid laundry detergent comes in a 40-ounce plastic bottle with a pour spout. When that bottle is empty, consumers can purchase Gain in a plastic pouch designed to refill the original 40-ounce plastic bottle. The pouches use less packaging, store flat, and cost less; however, they are not for repeated usage. The use of the original Gain 40-ounce bottle is an example of a(an)

reusable container.

Maturity stage

sales curve peaks and starts to decline, and profits continue to fall Intense competition because many brands are now in the market Competitors emphasize improvements and differences in their versions of the product. Marketing strategy - suggest new uses to increase the sales of mature products expand distribution into global markets suggestnewusesforproducts Modify product because as customers become more experienced and knowledgeable about products, the benefits they seek may change as well.

Decline stage

sales fall rapidly lost distinctiveness because similar competing or superior products have been introduced Marketing strategy - consider eliminating items from the product line that no longer earn a profit • Reducespendingonadvertising • do little to change a product's style and design

Growth stage

sales rise rapidly, profits reach a peak, and then they start to decline Marketing strategy - strengthen market share by emphasizing product benefits

Brand licensing gives a company the ability to gain more revenue and low-cost or free promotional exposure.

true

Functional modifications usually require that the product be redesigned.

true

One company markets such diverse products as Old El Paso Mexican foods, Yoplait yogurt products, and Blue Buffalo pet foods. These various offerings exhibit this firm's product mix

width