ch 10/11/13/14 marketing exam 2
Nielson Company
"global leader in audience measurement, data and analytics, shaping the future of media."
We decided to run an advertising campaign in the local newspaper. We paid $1,000 for 2,000 impressions. What is our CPM?
$500
Product Adoption Rate
**very impoirtnat metric** Product adoption (or user adoption) is the process by which people learn about a product and start using its features to meet their needs. The formula for calculating the adoption rate:pictured
communication after receiver
-they decode it- unpack the message and assign meaning. - they respond -The feedback loop tells the sender if the receiver understood the message as they were intending it when they encoded the message.
Personal selling components
Expensive bc its one-on-one Used mostly in B2B products like pharmaceutical Personal selling is ideal for products that can be customized, are complex, and have a relatively high price point.
different types of pretesting for advertising: jury tests
the respondents discuss the advertisements most likely to induce a purchase.
different types of pretesting for advertising: Theater tests
utilize a sample of the target audience as well. In this form of pretesting, the audience is shown advertisements—usually television ads—in the context that they would be shown to the entire target market.
The advantages of digital media include a host of valuable analytics, such as the following:
website traffic page views bounce rate conversion rate impressions cost per click
explain the Affordable method of creating promotional budgets:
what we can afford
factors that contribute to success of an item
- delivering unique benefits -planning before development -technological synergy and quality: is when a new product is built on the firm's existing technological resources. -marketing synergy and quality: examines the fit between the needs of the new product development project and the company's sales, advertising resources, customer service capabilities, distribution, and marketing research. -The market attractiveness - measure of potential value and considers factors like short- and long-term profit, market growth rate, how much competition currently exists in the market, the cost of entry into the market, and how much the product satisfies the needs of customers in the target market.
ethical issues related to advertising
- lies/ exaggerations or selective truth telling solution: transparency and fact-checking - advertising to children (children see 40k commercials per year-- juul advertising on nickelodeon) - advertising harmful products -
in textbook, what happens in stage 7 of new product development, test-marketing? what are methods of consumer-goods marketing testing?
. If the product team is satisfied with how the prototype performs functionally, the product concept is then test-marketed to determine its viability before it's launched on a large scale. Sales-Wave Research: least costly method of test-marketing. Controlled Test-Marketing:company arranges for a certain number of stores to carry the new product. Test-Marketing: Of course, the best (but also the most expensive) Simulated Test-Markets:consumers are exposed to simulated market situations in order to gauge their reactions. Marketers interview consumers in two stages: concept stage and after use. The concept stage interviews provide the marketer with information about the product's appeal and trial rate, whereas the post-usage interviews determine consumers' likelihood of purchasing the product again. Crowdsourcing: useful if your product includes mobile apps, web apps, or websites.
push vs pull strategy
A push strategy is aimed at pushing the brand in front of an audience. Often uses advertisements and PR pull- bring audiences to the product. putting ads for your video game on another video game that will pull them away from competitors * When you create storing brand, consumers go into stores asking for your product
The communication process
9 elements: - sender and receiver - message and media - communication functions: encoding, decoding, response, and feedback. - noise
5 components of promotion mix:
Advertising PR Personal Selling Direct and Digital Marketing Sales Promotion
Advertising
Advertising is effective based on the frequency with which it is usually viewed. And because of the media, the advertising message can usually be repeated many times, depending on the budget. Due to its repeatability, production costs have a better return on investment (ROI) the more an ad is used, and the recall of the ad increases significantly.
Aided recall vs unaided recall
Aided recall a type of advertising posttest that uses cues to assist a sample audience in recalling brands and products in an advertisement. unaided recall Probably in concentration set; more powerful does not use any cues or prompts to test the recollection of the advertisement message. The respondent is typically asked open-ended questions to gauge information retained from the advertising message.
define attutude tests, inquiry tests, and sales tests
Attitude tests How do you feel? What were your reactions? inquiry test runs two or more similar ads on a limited scale and determines which of the ads are most recalled by and effective for respondents. Are you motivated enough to ask questions? A/B testing: 2 adds to 2 groups, see how they vary sales test best test determines how many sales will be made based on a test market. This test can be done as either a pretest or a posttest. As a pretest, it is used as an estimate or prediction of future sales that the advertisement will attract. As a posttest, it measures the actual sales that can be linked to the advertisement Problematic: its unrealistic to expect advertising to directly influence sales Because advertising is only 1 of the 4PS (price might be too high, may not be available, etc) So if advertising doesn't work, evaluate the other Ps Advertising can directly lead to recall though
Examples of sales promotions:
Buy One Get One (BOGO). When Domino's Pizza offers the customer a free pizza when they buy a medium one-topping pizza, this BOGO deal is used to get an immediate increase in sales for Domino's pizza. Consumers may buy Domino's over other pizza brands because they can get more pizza for their money. Enter to Win. PepsiCo needed to gain traction with the millennial audience. It needed to boost the Lay's brand of potato chips and compete with new flavorful organic chips that were getting market share in the category once dominated by Lay's. To generate new interest in its brand, Lay's launched a campaign for consumers to create a new flavor. New flavors could be entered, Lay's would create samples, and the winner of the new chip flavor would win $1 million. Coupons. This method of promotion has come a long way with the use of technology. While consumers are still able to "clip" coupons and redeem them at the point of sale to receive savings on the products they are buying, many companies are making coupons available through mobile apps and discount codes to apply at the point of sale through an e-commerce store. Using coupons is a great method of inducing trial of a new product and increasing market share. Rebates. Companies offer rebates to induce purchase and generally to receive something in return besides the sale. When a rebate is offered for the purchase of an Energy Star-certified product, the consumer gets a designated dollar amount off the price of the product, and in turn they must submit the proof of purchase along with identifying information about themselves.
explain the Competitive Parity method of creating promotional budgets:
Companies of every size closely monitor the promotional activities of their competitors. With the competitive parity method of budgeting, the allocations essentially mirror whatever the closest competitor is spending on promotions. This method of budgeting doesn't allow for increased market share.
methids od excercising due care during product development
Conduct a Trademark Conduct a Trademark Search: It's critical to know whether anyone else is already using the mark before time and resources are invested into developing a name and market recognition. For example, Takeda Pharmaceuticals was required to change the name of its antidepressant drug Brintellix to Trintellix because of consumer confusion between Brintellix and an anti-blood-clotting drug named Brilinta.49 File a Trademark Application: Filing a trademark application provides the company with a bona fide statement of intention to use the mark within six months of the application. Conduct a Patent Search: If the product relates to a technological or scientific invention, the company should also conduct a patent search. As noted above, the patent excludes others from making, using, or selling a claimed invention for 20 years.50
What kind of marketing test is this? the company arranges for a certain number of stores to carry the new product. The new product is delivered to the store, and marketers manage shelf position in the store, pricing, point-of-purchase displays, and more. The company then measures sales results through the scanners at checkout.
Controlled Test-Marketing
What kind of marketing test is this? what is it best for? Using the input of a large group of people.
Crowdsourcing. This form of market testing would be particularly useful if your product includes mobile apps, web apps, or websites. The product team would choose a crowdsource testing platform, test the product, analyze the results, and tweak the product accordingly.24
Categories of Newness + Customer Perceptions
Discontinuous Innovation (aka radical or disruptive innovations): new-to-the-world products that are so different that they require a significant change in consumer behavior when adopted. ex: when the first cell phone came out Continuous Innovation: change that doesn't require consumer adjustments (like color tv coming out after b&w tv) Dynamically Continuous Innovation: some changes in consumer habits are necessary. For example, PC keyboards from typewriters. or home button removal
reasons products fail
Failure to Understand Failure to Understand Consumer Needs and Wants: Let's illustrate this with a real-life scenario that some of you may recall: Google Glass "smart glasses," which were like eyeglasses with smartphone capabilities (i.e., wearable technology). When Google announced the product in 2013, it issued a statement of principle reading, "We think technology should work for you — to be there when you need it and get out of your way when you don't." However, sales were disappointing despite the company's usual market hype, and it quickly became clear that consumers didn't want or need the product. There were other devices with longer battery life, faster processors, and better cameras, and most had lower prices. Google discontinued the product's development in 2015.39 Targeting the Wrong Market: It doesn't matter how incredible your technology is or how phenomenal you think your product is. If you can't reach the right people in the right market at the right time to buy your product, it's likely going to fail. Even Microsoft fell prey to this mistake. The company decided to challenge the Apple iPod and launched Zune in 2006. The product failed, and Microsoft later admitted that it was just chasing Apple, and its product gave consumers little incentive to switch from the iPod to Zune.40 Lack of Product Point of Difference: This could also be referred to as a lack of product uniqueness. If a new product doesn't satisfy a unique need of consumers, it's unlikely to dislodge existing brands that are available. The bottom line is that, to succeed in the market, a product has to either satisfy a new function or satisfy an existing function in new ways. For example, Google launched Google+, its own social media site, in 2011 to compete with Facebook. However, Google+ was unable to distinguish itself from Facebook, and the site never garnered the market share Google anticipated. The company shut down personal accounts in 2019.41 Prolonged Development/Delayed Market Entry: You've probably heard the idiom that "time is money," and this is especially true in new product development. If a company takes too long to launch a product, it often spells doom for the product launch. By
The National Ethics Association (NEA) has two suggestions.
First, within your ethics program, make customer service a core component. Second, promote values and ethics, and include them within the rules for your frontline workers along with the consequences if they aren't followed.44
What are the 5 gaps in the Gap Model of Service Quality
Gap 1—knowledge gap: the difference between customer expectations and what managers think they expect Gap 2—policy gap: the difference between management's understanding of the customer's needs and how they translate that understanding into service delivery policies and standards for employees Gap 3—delivery gap: the difference between the experience specification and the actual results of the service They know what to do, but don't do it Gap 4—communication gap: the difference between the delivery of the customer experience and what is communicated to the customer Gap 5—customer gap: the difference between the customer's expectations of the service or experience and their perception of the experience
pulsing promotional schedule
If you see promotions on a regular basis and then suddenly you see them a lot during certain seasons,
in textbook, what happens in Commercialization phase of new product development?
In this stage, the company launches the product, complete with full-scale production, distribution, advertising, and sales promotion. The cost of launching a new product varies depending on the product itself, the industry, and the competition.
what are the new product adopter categories?
Innovators risk-takers in the market. usually higher income/ well-educated. They enjoy the "rush" of taking risk but are also willing to accept the consequences of failure. It's the innovators who buy new products as soon as they hit the market. Early Adopters: Early adopters are actually the best target market for new innovations. well-educated "opinion leaders" with neighbors and friends, and their product advice is generally accepted more readily than product advice provided by innovators. Early Majority: look to the innovators and early adopters to determine if the new product meets expectations less risk but stoll early. typically above average in terms of education and income but also tend to be "followers" in their social group. Late Majority: slow to catch on to the popularity of new services, products, ideas, or solutions. 34% percent of the population will buy a new product only after about half of the population does. They're not interested in the "bells and whistles" (i.e., functionality and benefits) of the "latest model" and want simple, cost-effective products that focus on specific uses. As a general rule, their income and education are limited, and they're typically unwilling to take a chance with a new product unless the majority of consumers has already adopted the innovation Laggards: Laggards are more in tune with the past than the future, and they're leery of new ideas. By the time they adopt a product, there's probably already a new version or innovation taking its place.
Characteristics of Services
Intangibility Inseparability inconsistency/ Variability Inventory/ Perishability
Risks of New Products
Lack of Differentiation: apple disc homepod bc not different enough from amazon alexa financial feasibility: its expensive and might fail technical feasability: Does the organization have the technical resources to meet capacity? Can the technical team convert the idea into a working product or service? Poor Timing: coming out with something at the wrong time
Direct marketing
Like mail, telephone, text messaging, email marketing
Types of New Products
New-to-the-World Products: new inventions that create new markets. Some examples from products recently introduced include biomagnetic ear stickers for weight loss, cat self-groomers, and portable blenders. New-to-the-Firm Products: new to a company but not to the world. It's likely that marketers have seen a gap in the market and their product line and attempted to fill that void by adding a "me-too" type of product to their product line. For example, Nature Valley originally only made granola cereal but later introduced granola bars that could be eaten "on the go." product that wasn't new to the world, but it certainly was new to Nature Valley. Additions to Existing lines are simple product line extensions, designed to "flesh out" the product line. Coca-Cola has launched a number of product line extensions, such as Coca-Cola Cherry, Coca-Cola Cherry Vanilla, etc Improvements and Revisions to Existing Products: This is when existing products are improved. . example: Meta (formerly Facebook) released its Oculus Quest 2 VR (virtual reality) headset and controllers late in 2021, which was simply an updated version of its original Oculus Quest.6 Repositioned products are those that are retargeted for a new use or application. For example, Bayer repositioned its aspirin from treating headaches, fever, and inflammation to also safeguarding against heart attacks.
Public relations:
Nonpaid, non personal form of promotion Highly credible like feature articles, captioned photos, press conferences, etc
How does christopher lovelock break down services:
People processing: production and consumption of services done simultaneously Possession processing: service is directed toward the customer's physical possessions, not the customer. production and consumption are separate (you can drop off your item that needs repair) . Mental Stimulus Processing: services intercat with mind not body. Education/ counseling Information Processing: is the least tangible form of service, although it can be transformed into a tangible service output like reports, books, letters, DVDs, etc. Some examples of information processing services are things like meeting with your financial advisor regarding investment advice, legal services, and banking.6
Tools in PR
Press relations entails establishing and maintaining positive relationships with those in the media, such as newspapers and television. public affairs—efforts to influence public policy and engage with public officials and trade associations. lobbying involves the intention of influencing public policy and law. Lobbying is a way for companies to influence legislation in their favor. Lobbying events- a way to showcase the company, products/services, and/or brands to the public. Often, companies use special events to show the public that their values and ideals are part of their business model.
pretesting advertising
Pretesting advertising involves research that predicts the performance of an advertisement before it airs. The three most common types of pretesting are portfolio tests, jury tests, and theater tests.
return on customer investment (ROCI)
ROCI is a marginal analysis that shows the efficiency of marketing communications spending.
how to select advertising media
Reach refers to the estimated number of potential customers that can be reached with an advertising campaign. Frequency refers to how many times someone is exposed/shown to an advertisement in a given time Impact refers to how quickly members of the audience receive an advertising message. engagement refers to any interaction with advertising content.
RATER framework of service quality by Zeithaml in book delivering service quality
Reliability Consistent service of delivering promise Assurance Trustworthiness - communicate expertise Tangibles Physical appearance of facilities. Empathy Making customers feel values Responsiveness promptness and willingness of staff support
The Service Marketing Triangle
Shows impirtnace of people in company's ability to deliver on promises You take out one triangle, everything else falls apart Components: External service marketing: making promises Through promotional mix Internal Service Marketing—Enabling Promises motivating employees to deliver customer value and ensure customer satisfaction by acting as a team. While Interactive Service Marketing—Keeping Promises When employees and customers interact Establishes short and long teram CS
what are the stages in the adoption process?
Stage 1: Product Awareness. The first stage in the consumer adoption process is simply creating awareness that the product is available, so the company develops a successful marketing strategy to make customers cognizant of the new product. This strategy might include creating a strong presence for the product in social media, for example. Stage 2: Product Interest. In this stage, consumers are aware of the product, and it has piqued their interest. Stage 3: Product Evaluation. Before they buy it, consumers will typically examine, compare, and evaluate the product. Stage 4: Product Trial. This is the stage in the consumer adoption process where the consumer actually tries the product out. Stage 5: Product Adoption. When consumers enter this phase, they're ready to buy
Rewards of new products
Targeting New Markets: growing their customer base. new drink for those with anxiety Increasing Market Share: As the market grows, a company needs to expand with it in order to keep its share, but it can also increase its market share. Increasing Revenue Stream: New products and/or services will create additional revenue streams that will generate extra income for the business, perhaps spurring even more new product development. For example, Apple generates revenue streams by developing new hardware products such as the Apple Watch and AirPods wireless headphones, and the company enjoys recurring revenues from services such as iCloud, Apple Music, and Apple TV+.
The 5A Framework
The 5A framework is the map of the customer's needs. brand. The 5As provide the marketer with clear steps on the role of the messaging at each step of the framework. aware-- know it exists appeal-- what can it do for them ask-- customers seek out info act-- purchase or not purchase advocacy--consumer becomes loyal and an advocate
IMC
The method of using various forms of the promotional mix to send the same message to the target audience is called - consumers need to hear the same message many times in different forms.
Return on Investment(ROI):
This is a metric formula used to evaluate the profitability, or overall value, of an investment.
Explain the Objective and Task method of creating promotional budgets:
This is perhaps the best method but is often used the least. the marketer determines the objectives of the IMC campaign and what tasks need to be done in order to complete the objectives. The tasks are priced, and the level of reach (number of consumers who will see the message) and the frequency (the number of times the consumer will see the message) are estimated. Based on the tasks necessary to achieve the campaign objectives, the budget is established. - look at class notes to why this is never used
Current Year Percentage of Sales
This method calculates cost of goods sold, inventory, cash, and other financial line items as a percentage of sales and then applies that percentage to future sales estimates. It's a "quick and dirty" way to estimate the product's future value.
Research and Development Spending as a Percentage of Sales:
This metric is used to compare the effectiveness of R&D expenditures between companies in the same industry. It's important to use companies within the same industry because R&D numbers vary widely based upon the industry. For example, pharmaceutical and software companies tend to spend considerable dollars on R&D, whereas consumer product companies generally spend less. The percentage is calculated as R&D dollars spent divided by total sales.
in textbook, what happens in stage 4 of new product development, market strategy development?
This plan will address the target market for the product. It will outline product positioning, pricing, distribution, promotion, budget, and both short- and long-term goals for sales, market share, and profit.
Time to Value (TTV):
Time to value refers to how long it takes new users to recognize your product's value (sometimes referred to as the "aha!" moment in marketing). Obviously, the sooner this occurs, the better, although time to value varies widely depending upon the product itself.27 For example, if you purchase a new book for your Kindle, it's a matter of seconds before the book is available to you. On the other hand, if you subscribe to a magazine, it may be days or weeks before you see your first issue.
Paid sponsorship
another ethical challenge-- influencers should disclose if they are being paid to support a product
People-based services
are when people primarily deliver the service, rather than equipment or machinery subcategories: unskilled, skilled, professionals
According to the marketing firm Yankelovich Inc., the average digitally connected person is exposed to
around 5,000 ads per day.
in textbook, what happens in stage 5 of new product development, business analysis ?
assess the new product's business appeal There are a couple of different analyses that can be done: Payback: the time frame that the company can expect to recover the investment it made in the product development process. Break-even analysis: how many units must be sold before the company recoups its costs and starts making a profit.
explain the Percent of Sales method of creating promotional budgets:
attributes sales to all the functions of marketing. Generally, an organization may provide an arbitrary percent of overall sales as the total budget for the marketing promotions. Because many issues affect the sale of a product, it is difficult to make sales the only determinant of the marketing activities and the promotional methods. ex: 7% of profits will go to marketing
external value proposition
the promise of value that a customer expects a business to deliver. Employees ensure this value. - part of the service-profit chain model
pros of IMC
better results (consistent message through diff channels) increased efficiency improved brand awareness repeated success customer satisfaction
what are KPIs in measuring campaign effectiveness
brand recognition, awareness, and impressions
explain the Top Down method of creating promotional budgets:
campaign budget is issued from the operating budget based on input from the executives responsible for setting the budgets. While this method takes into consideration the overall organization, it pays little heed to the needs of the specific campaign.
approaches to determining budget in IMC
consider consider where the consumer is in their journey, the current level of brand awareness for the product, accessibility of the target market, creation of the promotion, and specific media under consideration.
different types of pretesting for advertising: portfolio tests
consist of respondents browsing through various versions of an advertisement and then being asked to recall certain details from each. Respondents are chosen from the target audience, and those advertisements most recalled by participants are chosen to air for the entire target audience.
continuous promotional schedule
the marketer will conduct the promotion year-round on a very regular schedule. Consumers will continuously see the ads.
flighting promotional schedule
the marketer will run a period of heavy promotions and then go for a period of time without any promotional messaging. The idea is to give the target market a break and avoid potential wear-out of the message.
internet marketing vs digital marketing
digital: - tools include websites, landing pages, social media pages, widgets, and customer relationship management (CRM) systems. - geared toward very specific market segments and is primarily interactive internet: - By contrast, Internet marketing is sending a message to a mass audience. - Websites and digital adds, and social media , sms and mobile apps
breaking down elements of communication process
encoding -- The process of creating the message - Encoding could be writing a press release, developing a tag line, writing ad copy, creating a jingle, or designing a brand symbol. the message: When Nike tells its customers to "Just Do It," it has created a message. media/medium: how the message is delivered. The - then it hits the receiver
which components of the communication process does the marketer have control of?
encoding, message, and media
Service-Profit Chain Model
establishes relationships between profitability, employee satisfaction, loyalty, and productivity. The concept is reasonably simple: happy workers make happy customers, more profits broken down -Internal service quality (the support received by frontline employees from the rest of the organization) leads to employee satisfaction. -Employee satisfaction results in employee loyalty, productivity, and the willingness to go that "extra mile" for the customer, which creates value. -Value contributes to customer satisfaction, resulting in customer loyalty. Customer loyalty translates to profitability and growth for the organization.
Equipment-based services
firms utilize equipment, machinery, and other forms of technology to perform service tasks (see Subcategories: automated services: car washes and parking meters equipment-based services operated by relatively unskilled operators: dry-cleaning equipment equipment-based services operated by skilled operators: X-ray machines and ultrasound equipment
What kind of marketing test is this? The company will select a few representative cities (markets that closely resemble the target customers) and introduce the product with a full advertising and promotional campaign. In essence, the company is measuring the success of the new product on a smaller scale before launching it on a national or even global scale. Curious to know the top cities to test-market a national product? They are Nashville, Tennessee; Cincinnati, Ohio; Indianapolis, Indiana; Charleston, South Carolina; and Jacksonville, Florida.
full-blown test-marketing - best but most costly
impressions
how many times an advertisement appears in a chosen medium, rating= the percentage of the target audience that is reached with an advertisement
Types of advertising objectives: Informative Advertising vs Persuasive Advertising vs Comparative Advertising vs Reminder Advertising
informative- bring awareness through education (SUV by explaining features) persuasive- highlight benefit of product using emotions (SUV by showing family) comparative- benefit of our over competitor reminder- used in maturation to remind (Mcdonalds showing fries)
the process of diffusion of innovation
mass media--> personal influence--> individual —the process through which new products are adopted (or not) by customers. Let's take a look: factors: Relative Advantage: How much is the new product "better than" what it replaces? Compatibility: level at which the innovation fits into a specific society. change habits? Complexity: How difficult is the new product for the adopter to understand and use? Divisibility: the ability to give the product a "test run" before putting down your hard-earned cash. Communicability: ability to effectively communicate the benefits and results of using the product, and when those benefits and results are both observable and describable to others.
return on add spend
metric that measures the amount of revenue earned for every dollar spending on advertising. Unlike
What is one of the most expensive items in promotional mix?
personal selling
what are the steps of integrated marketing communication process ?
photo
product advertisements vs institutional advertisements vs
product - promote a specific product or brand in product mix institutional --focus on the organization ex: Early on, Anheuser-Busch switched some of its operations from distilling beer to making hand sanitizer. not trying to sell budweiser, but bolster image
advantages + disadantages of PR
pros increasing brand credibility increasing sales and leads positive brand image cost-effectiveness cons: no direct control lack of guaranteed results difficulty of evaluating effectiveness
pros and cons of advertising
pros: reaches large audience, low cost per exposure cons: expensive, non personal, difficulty to quickly change message, difficulty to capture how the message was received
factors of message content
rational appeals -- it will benefit me emotional appeals -- fear if you don't purchase (like anti-aging products or public health) moral appeals- do the right thing
brand recognition vs awareness
recognition- recognize and ID a brand awareness- recall information about the brand
conversion rate
refers to the percentage of an audience that has completed a desired action. The formula for conversion rate is
common key performance indicators (KPIs) for evaluating promotional campaigns include the following:
return on investment cost per lead cost per sale conversion engagement
What kind of marketing test is this? consumers try the product at no cost. They are then re-offered the product (or a competitor's product) at a reduced price a number of times (i.e., sales waves). The point of this research is to see how many consumers select the new product and record their reported levels of satisfaction with the product.
sales-wave research - the least costly
what are some metrics to evaluate new products
see image
what are the dimensions of service quality
see image
according to book (diff than essay), what are the 9 steps in new products.
see photo
managing in the consumer adoption process
see picture
explain search, experience, and credence attributes.
some services are easier to evaluate, some are harder.
in textbook, what happens in the concept development and testing stage of new product development, ?
stage, a product idea can be turned into several product concepts—the perception of a new idea or innovation. you ask customers if they like the concept of the idea. Let's assume that the product concept we've chosen is the instant, on-the-go breakfast drink. Customers in the target market would be presented with a description of the product that may read something like: "Our product is a high-protein powdered yogurt mixture that is added to juice to make an instant breakfast smoothie that provides nutrition, good taste, and convenience. The product will be offered in individual packages, six to a box, priced at $3.49 per box." Potential customers will Potential customers willthen be asked a series of screening or qualifying questions, such as: To what extent do you like or dislike this product? How appealing are the attributes of the product? How likely would you be to purchase this product?
What kind of marketing test is this? consumers are exposed to market situations in order to gauge their reactions. Marketers interview consumers in two stages: concept stage and after use. The concept stage interviews provide the marketer with information about the product's appeal and trial rate, whereas the post-usage interviews determine consumers' likelihood of purchasing the product again.
stimulated test-markets
cost per thousand (CPM)
the cost to advertise to 1,000 people.
Puffery
when marketers exaggerate at extreme levels. For example, a marketer may say that a product is "10x stronger than the competition." This is an unethical statement unless the marketer can support this claim through independent research from a third-party firm. Using general terms such as "awesome," "fabulous," and "best" are all acceptable, but making specific statements crosses the ethics threshold.
is product failure common
yes Harvard Business School professor Clayton Christensen has been quoted as suggesting that approximately 30,000 new products are launched each year, and 95 percent of them fail. A study by the Product Development and Management Association found that new product failure rates varied among industries, ranging from 35 percent for health care products to 49 percent for consumer goods. Although those numbers are significantly lower than that proposed by Professor Christensen, the message remains the same: successful product launches shouldn't be taken for granted.38