MKTG 409 Exam 3

wholesaler

- An individual or organization that sells products that are bought for resale, making other products, or general business operations. - In addition to bearing the primary responsibility for the physical distribution of products from manufacturers to retailers, wholesalers may establish information systems that help producers and retailers manage the supply chain from producer to customer.

unsought products

- Are those purchased when a sudden problem must be solved, products of which customers are unaware until they see them in a store or online, and products that people do not plan on purchasing. - Emergency medical services and automobile repairs are examples of products needed quickly and suddenly to solve a problem.

process materials

- Are used directly in the production of other products. - Unlike component parts, however, process materials are not readily identifiable. - Case in point, a salad dressing manufacturer includes vinegar as an ingredient in dressing. - The vinegar is a process material because it is not identifiable or extractable from the other ingredients in the dressing.

altering the package

- At times, a marketer changes a package or labeling because the existing design is no longer in style, especially when compared with the packaging of competitive products. - A package may be redesigned because new product features need to be highlighted or because new packaging materials have become available. - An organization may also decide to change a product's packaging to make the product safer or more convenient to use.

brand associations

- At times, a marketer works to connect a particular lifestyle or, in some instances, a certain personality type with a specific brand. - This practice is particularly effective with younger consumers, which is why many cereals and candies feature trade characters.

the stages of the product adoption process:

- Awareness - Interest - Evaluation - Trial - Adoption

management of service expectations

- Because expectations play such a significant role in customer evaluations of service quality, service companies must set realistic expectations about the service they provide - The best way to ensure positive word-of-mouth communication is to provide exceptional service quality. - It has been estimated that customers tell four times as many people about bad service as they do about good service.

intangibility promotion services

- Because it may not be possible to depict the actual performance of a service in an advertisement or display it in a store, explaining a service to customers can be a difficult task. - Promotion of services typically includes tangible cues that symbolize the service. - Service providers are more likely to promote price, guarantees, performance documentation, availability, and training and certification of contact personnel.

component parts

- Become part of the physical product and are either finished items ready for assembly or products that need little processing before assembly. - Spark plugs, tires, clocks, brakes, and headlights are all component parts of an automobile. - Buyers purchase such items according to their own specifications or industry standards, and they expect the parts to be of a specified quality and delivered on time so that production is not slowed or stopped.

new-product development process

- Before a product is introduced it does through the seven phases of the new-product development process: 1. idea generation 2. screening 3. concept testing 4. business analysis 5. product development 6. test marketing 7. commercialization - A product may be dropped at any stage of development.

the introduction stage

- Begins at a product's first appearance in the marketplace. - Sales start at zero and profits are negative because companies must invest in product development and launch prior to selling. - Sales may be slow at first because potential buyers must be made aware of new-product features, uses, and advantages through marketing. - Two difficulties may arise during the introduction stage: - First, sellers may lack the resources, technological knowledge, and marketing expertise to launch the product successfully. - Second, the initial product price may have to be high to recoup expensive marketing research or development costs, which can depress sales. - Many products never last beyond the introduction stage - It is estimated that only between 10 and 20 percent of new products succeed in the marketplace.

customer characteristics

- Business customers often prefer to deal directly with producers (or very knowledgeable channel intermediaries such as industrial distributors), especially for highly technical or expensive products, such as mainframe computers, jet airplanes, or heavy machinery that require strict specifications and technical assistance. - Consumers, on the other hand, generally buy limited quantities of a product, purchase from retailers, and often do not mind limited customer service.

idea generation

- Businesses and other organizations seek product ideas that will help them achieve their objectives. - Although some organizations get their ideas by chance, firms that are most successful at managing their product mixes usually develop systematic approaches for generating new product ideas. - New product ideas may stem from internal sources—marketing managers, researchers, sales personnel, engineers, or other organizational personnel. - New product ideas may also arise from sources outside the firm, such as customers, competitors, advertising agencies, management consultants, and private research organizations.

managing existing products

- By assessing the composition of the current product mix, a marketer can identify weaknesses and gaps. - This analysis can then lead to improvement of the product mix through line extensions and product modifications.

railroads

- Carry heavy, bulky freight that must be shipped long distances over land. - Railroads are especially efficient for transporting full carloads, which can be shipped at lower rates than smaller quantities, because they require less handling.

aesthetic modifications

- Change the sensory appeal of a product by altering its taste, texture, sound, smell, or appearance. - In addition, aesthetic modifications attempt to minimize the amount of illegal product counterfeiting that occurs through constant change in design. - Aesthetic modifications can help a firm differentiate its product from competing brands and thus gain a sizable market share. - The major drawback in using aesthetic modifications is that their value is determined subjectively. Some customers actually may find the modified product less attractive.

venture team

- Creates entirely new products that may be aimed at new markets. - Venture team members are brought together from different functional areas of the organization. In working outside established divisions, venture teams have greater flexibility to apply inventive approaches to develop new products that can take advantage of opportunities in highly segmented markets.

symbolic benefits

- Customers also receive benefits based on their experiences with the product, which give symbolic meaning to many products (and brands) for buyers. - The atmosphere and décor of a retail store, the variety and depth of product choices, the customer support, and even the sounds and smells all contribute to the experiential element.

analysis of customer expectations

- Customers usually have two levels of expectations: desired and acceptable. - The desired level of expectations is what the customer really wants. - If this level of expectations is provided, the customer will be very satisfied. - The acceptable level of expectations is what the customer views as adequate. - The difference between these two levels of expectations is called the customer's zone of tolerance. - Comment cards at restaurants.

service quality

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

discount stores

- Department stores have lost sales and market share to discount stores, especially Walmart and Target, in recent decades. - Discount stores are self-service, general-merchandise outlets that regularly offer brand-name and private-brand products at low prices. - 50,000-80,000 square feet

limited service wholesalers

- Provide fewer marketing services than do full-service wholesalers and specialize in just a few functions. - Limited-service wholesalers take title to merchandise but often do not deliver merchandise, grant credit, provide marketing information, store inventory, or plan ahead for customers' future needs. - Smaller profit margins and lower rates.

trucks

- Provide the most flexible schedules and routes of all major transportation modes in the United States because they can go almost anywhere. - Often used in conjunction with other forms of transport. - More expensive and somewhat more vulnerable to bad weather than trains. - Subject to size and weight limitations on the loads they carry.

multiple packaging

- Rather than packaging a single unit of a product, marketers sometimes use twin packs, tri-packs, six-packs, or other forms of multiple packaging. - For certain types of products, multiple packaging may increase demand because it increases the amount of the product available at the point of consumption.

commission merchants

- Receive goods on consignment from local sellers and negotiate sales in large, central markets.

wholesaling

- Refers to all transactions in which products are bought for resale, making other products, or general business operations.

product design

- Refers to how a product is conceived, planned, and produced. - Design is a very complex topic because it involves the total sum of all the product's physical characteristics. - Good design, however, means more than just appearance—design also encompasses a product's functionality and usefulness. (jeans falling apart after 3 washes)

nonprofit marketing

- Refers to marketing activities that are conducted by individuals and organizations to achieve some goal other than ordinary business goals like profit, market share, or return on investment. - The only beneficiaries of a nonprofit organization are its clients, its members, or the public at large. - Have greater opportunity for creativity; have difficulty judging the performance of the trained professionals they oversee. - Quite controversial; use large amount of lobbying

product positioning

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

consistency of quality

- Refers to the degree to which a product has the same level of quality over time.

inseparability

- Refers to the fact that the production of a service cannot be separated from its consumption by customers. (surgery; flights) - Inseparability implies a shared responsibility between the customer and service provider. - The fact that customers are present and may take part in the production of a service means that other customers can impact the outcome of the service. - Service marketers can reduce problems by encouraging customers to share the responsibility of maintaining an environment that allows all participants to receive the intended benefits of the service environment.

customer contact

- Refers to the level of interaction between the service provider and the customer necessary to deliver the service. - Technology has enabled many service-oriented businesses to reduce their level of customer contact. - Employee satisfaction is one of the most important factors in providing high service quality to customers. - - The fact that customers are present and may take part in the production of a service means that other customers can impact the outcome of the service. - Service marketers can reduce problems by encouraging customers to share the responsibility of maintaining an environment that allows all participants to receive the intended benefits of the service environment.

quality

- Refers to the overall characteristics of a product that allow it to perform as expected in satisfying customer needs.

product manager

- Responsible for a product, a product line, or several distinct products that make up an interrelated group within a multi product organization.

brand manager

- Responsible for a single brand. - Product managers and brand managers plan marketing activities to achieve objectives by coordinating a mix of distribution, promotion (especially sales promotion and advertising), and price. - They must consider packaging and branding decisions and work closely with personnel in research and development, engineering, and production.

market manager

- Responsible for managing the marketing activities that serve a particular group of customers.

the decline stage

- Sales fall rapidly. - When this happens, the marketer must consider eliminating items from the product line that no longer earn a profit. - The marketer also may cut promotion efforts, eliminate marginal distributors, and finally, plan to phase out the product. - During a product's decline, spending on promotion efforts is usually reduced considerably. - Firms will maintain outlets with strong sales volumes and eliminate unprofitable outlets.

channel integration

- Supply-chain functions cannot be eliminated. - Various channel stages may be combined, either horizontally or vertically, under the management of a channel captain. - Such integration may stabilize supply, reduce costs, and increase channel member coordination.

supplementary service

- Supports the core service and is used to differentiate the service bundle from those of competitors.

five dimensions consumers use when evaluating service quality:

- Tangibles, reliability, responsiveness, assurance, and empathy. - Of the five, reliability is the most important in determining customer evaluations of service quality.

level of quality

- The amount of quality a product possesses.

nonprofit marketing objectives

- The basic aim of nonprofit organizations is to obtain a desired response from a target market. - The response could be a change in values, a financial contribution, the donation of services, or some other type of exchange.

core service

- The basic service experience or commodity that a customer expects to receive.

awareness

- The buyer becomes aware of the product. - When consumers initially become aware that the product exists, they possess little information and are not yet concerned about obtaining more.

evaluation

- The buyer considers the product's benefits and decides whether to try it, considering its value versus the competition. - Individuals consider whether the product will address the criteria that are crucial to meeting their specific needs.

trial

- The buyer examines, tests, or tries the product to determine if it meets his or her needs. - Consumers use or experience the product for the first time, possibly by purchasing a small quantity, taking advantage of free samples, or borrowing the product from someone else.

adoption

- The buyer purchases the product and can be expected to use it again whenever the need for this product arises. - When they need a product of that general type and choose to purchase the new product on a trial basis. - Doesn't mean that the buyer will eventually adopt the new product, rejection may occur at any stage.

interest

- The buyer seeks information and is receptive to learning about the product. - When they become motivated to learn about the product's features, uses, advantages, disadvantages, price, or location.

waterways

- The cheapest method of shipping heavy, low-value, nonperishable goods. - Water carriers offer considerable capacity.

warehousing

- The design and operation of facilities for storing and moving goods, is another important physical distribution function. - Warehouses fall into two general categories: private and public. In many cases, a combination of private and public facilities provides the most flexible warehousing approach.

freight forwarders

- These firms combine shipments from several organizations into efficient lot sizes. - Freight forwarders help such firms by consolidating small loads from various organizations to allow them to qualify collectively for lower rates.

product support services (customer services)

- These services include any human or mechanical efforts or activities a company provides that add value to a product. - Examples of customer services include delivery and installation, financing arrangements, customer training, warranties and guarantees, repairs, layaway plans, convenient hours of operation, adequate parking, and information through toll-free numbers and websites. - In the case of markets where all products have essentially the same quality, design, and features, providing good customer service may be the only way a company can differentiate its products.

benefits of manufacturers' agents

- They usually possess considerable technical and market information and have an established set of customers. - For an organizational seller with highly seasonal demand, a manufacturers' agent can be an asset because the seller does not have to support a year-round sales force. - The fact that manufacturers' agents are typically paid on a commission basis may also be an economical alternative for a firm that has highly limited resources and cannot afford a full-time sales force.

business products

- Those bought to use in a firm's operations, to resell, or to make other products. - Business buyers seek to satisfy the goals of their organizations. - Business products are usually purchased on the basis of an organization's goals and objectives.

for-profit firms

- Those offering financial, personal, and professional services.

channel power

- To attain desired objectives, the captain must possess channel power, the ability to influence another channel member's goal achievement. - The member that becomes the channel captain will accept the responsibilities and exercise the power associated with this role.

when to order

- To determine when to order, a marketer calculates the reorder point: the inventory level that signals the need to place a new order. - Reorder point = (order lead time x usage rate) + safety stock - The order lead time refers to the average time lapse between placing the order and receiving it. - The usage rate is the rate at which a product's inventory is used or sold during a specific time period. - Safety stock is the amount of extra inventory a firm keeps to guard against stockouts resulting from above-average usage rates and/or longer-than-expected lead times.

multiple marketing channels and channel alliances

- To reach diverse target markets, manufacturers may use several marketing channels simultaneously, with each channel involving a different group of intermediaries. - A manufacturer often uses multiple channels when the same product is directed to both consumers and business customers.

late majority

Are skeptical of new products, but eventually adopt them because of economic necessity or social pressure.

innovators

Are the first to adopt a new product because they enjoy trying new products and do not mind taking a risk.

labels on food

Food product labels must state the number of servings per container, serving size, number of calories per serving, number of calories derived from fat, number of carbohydrates, and amounts of specific nutrients such as vitamins.

labels on garments

Garments must be labeled with the name of the manufacturer, country of manufacture, fabric content, and cleaning instructions.

three major types of modifications:

quality, functional, and aesthetic

three categories of brands:

manufacturer, private distributor, and generic

supply management

- (EX: purchasing, procurement, sourcing) in its broadest form refers to the processes that enable the progress of value from raw material to final customer and back to redesign and final disposition.

branding strategies

- A company that uses primarily individual branding for many of its products also may use family branding for a specific product line. - Branding strategy is influenced by the number of products and product lines the company produces, the number and types of competing products available, and the size of the firm.

idea

- A concept, philosophy, image, or issue. - Ideas provide the psychological stimulation that aids in solving problems or adjusting to the environment.

general-merchandise retailer

- A retail establishment that offers a variety of product lines that are stocked in considerable depth is referred to as a general-merchandise retailer. - The primary types of general-merchandise retailers are department stores, discount stores, convenience stores, supermarkets, superstores, hypermarkets, warehouse clubs, and warehouse showrooms.

brand loyalty

- A customer's favorable attitude toward a specific brand. - If brand loyalty is sufficiently strong, customers will purchase the brand consistently when they need a product in that specific product category. - Retailers strive to carry the brands known for their strong customer following to satisfy customers because they expect these brands to be available when and where they shop. - It allows an organization to retain existing customers and avoid expending significant resources to gain new ones. - There are three degrees of brand loyalty: recognition, preference, and insistence.

developing new products

- A firm develops new products as a means of enhancing its product mix and adding depth to a product line. - Expensive and risky, but failure to introduce new products is also risky. - A radically new product involves a complex developmental process, including an extensive business analysis to determine the potential for success. - Products that are different and distinctly better are often viewed as new, even if they do not represent a truly new product. (duracell battery-powered charging pad) - A new product can also be one that a given firm has not marketed previously, although similar products are available from other companies. (conair cleansing brush) - Finally, a product can be viewed as new when it is brought to one or more markets from another market.

store image

- A functional and psychological picture in the consumer's mind—that appeals to its target market.

product

- A good, a service, or an idea received in an exchange. - It can be either tangible or intangible and includes functional, social, and psychological utilities or benefits.

marketing channel

- A group of individuals and organizations that direct the flow of products from producers to customers within the supply chain. - The major role of marketing channels is to make products available at the right time at the right place in the right quantities. - Some marketing channels are direct, meaning that the product goes directly from the producer to the customer.

trademark

- A legal designation indicating that the owner has exclusive use of a brand or a part of a brand and that others are prohibited by law from its use. - To protect a brand name or brand mark in the United States, an organization must register it as a trademark with the U.S. Patent and Trademark Office.

test marketing

- A limited introduction of a product in geographic areas chosen to represent the intended market. - It should be conducted only after the product has gone through development and initial plans have been made regarding the other marketing mix variables. - The dangers of introducing an untested product include undercutting already profitable products and, should the new product fail, loss of credibility with distributors and customers. - Benefits: - It lets marketers expose a product in a natural marketing environment to measure its sales performance. - Moreover, if consumers' early reactions are negative, marketers may be unable to persuade consumers to try the product again. - Selection of appropriate test areas is very important because the validity of test marketing results depends heavily on selecting test sites that provide accurate representations of the intended target market. - A competitor may attempt to "jam" the test program by increasing its own advertising or promotions, lowering prices, and offering special incentives, all to combat consumer recognition and purchase of the new brand. - Sometimes competitors copy the product in the testing stage and rush to introduce a similar product.

major packaging considerations

- A major consideration is cost. -Developing tamper-resistant packaging is very important for certain products. Although effective tamper-resistant packaging may be expensive to develop, when compared to the potential costs of lost sales, loss of consumer confidence and company reputation, and potentially expensive product liability lawsuits, the costs of ensuring consumer safety through safer packaging are relatively small. - A package's promotional role is an important consideration. Through verbal and nonverbal symbols, the package can inform potential buyers about the product's content, features, uses, advantages, and hazards. (Pangea Organics) - A firm can create desirable images and associations by its choice of color, design, shape, and texture. - When opting for color on packaging, marketers must judge whether a particular color will evoke positive or negative feelings when linked to a specific product. (green=mold) - Packaging also must meet the needs of resellers. Resellers may refuse to carry certain products if their packages are cumbersome or require too much shelf space. - A final consideration is whether to develop packages that are viewed as environmentally responsible. Consequently, many companies have changed to environmentally sensitive packaging that is recycled, lighter weight, and uses fewer materials.

brand

- A name, term, design, symbol, or any other feature that identifies one marketer's product as distinct from those of other marketers. - A brand may identify a single item, a family of items, or all items of that seller. - Some have defined a brand as not just the physical good, name, color, logo, or ad campaign, but everything associated with the product, including its symbolism and experiences.

individual branding

- A policy of naming each product differently. - Nestlé S.A., the world's largest food and nutrition company, uses individual branding for many of its 6,000 different brands, such as Nescafé coffee, PowerBar nutritional food, Maggi soups, and Häagen-Dazs ice cream. - A major advantage of individual branding is that, if an organization introduces an inferior product, the negative images associated with it do not influence consumers' decisions to purchase the company's other products. - With individual branding, however, a firm cannot capitalize on the positive image associated with successful products.

handling-improved packaging

- A product's packaging may be changed to make it easier to handle in the distribution channel—for example, by altering the outer carton or using special bundling, shrink-wrapping, or pallets. - An ice cream producer, for instance, may adopt a rectangular-shaped package over a cylindrical one to facilitate handling.

warehouse clubs

- A rapidly growing form of mass merchandising, are large-scale, members-only operations that combine cash-and-carry wholesaling with discount retailing. - Warehouse clubs offer the same types of products as discount stores but in a limited range of sizes and styles. - To keep prices lower than those of supermarkets and discount stores, warehouse clubs offer few services. - Sam's and Costco

secondary-use packaging

- A secondary-use package can be reused for purposes other than its initial function. - For example, a margarine container can be reused to store leftovers, and a jelly container can serve as a drinking glass.

protecting a brand

- A series of court decisions has created a broad hierarchy of protection based on brand type. - From most protectable to least protectable, these brand types are fanciful (Exxon), arbitrary (Dr Pepper), suggestive (Spray'n Wash), and descriptive (Minute Rice). - Surnames and descriptive, geographic, or functional names are difficult to protect. - However, research findings show that consumers prefer these descriptive and suggestive brand names and find them easier to recall compared with fanciful and arbitrary brand names. - In many countries, brand registration is not possible. In such places, the first firm to use a brand in such a country automatically has the rights to it. - In some instances, U.S. companies actually have had to buy their own brand rights from a firm in a foreign country because the foreign firm was the first user in that country.

concept testing

- A small sample of potential buyers is presented with a product idea through a written or oral description (and perhaps a few drawings) to determine their attitudes and initial buying intentions regarding the product. - Concept testing is a low-cost procedure that allows a company to determine customers' initial reactions to a product idea before it invests considerable resources in research and development. - During concept testing, the concept is described briefly, and then a series of questions is presented to a test panel.

convenience stores

- A small, self-service store that is open long hours and carries a narrow assortment of products, usually convenience items such as soft drinks and other beverages, snacks, newspapers, tobacco, and gasoline, as well as services such as ATMs. - <5,000 square feet

brand preference

- A stronger degree of brand loyalty. - A customer has a definite preference for one brand over competitive offerings, and will purchase this brand if it is available. - However, if the brand is not available, the customer will accept a substitute rather than expending the additional effort required to find and purchase the preferred brand.

good

- A tangible physical entity, such as an iPad or a Subway sandwich.

category killer

- A very large specialty store that concentrates on a major product category and competes on the basis of low prices and broad product availability. - Home Depot, Office Depot, Petco, Barnes & Noble, Best Buy

early majority

- Adopt just prior to the average person. - They are deliberate and cautious in trying new products.

environmental forces

- Adverse economic conditions might force an organization to use a low-cost channel, even though it reduces customer satisfaction. - A growing economy, may allow a company to choose a channel that previously had been to costly. - New technology may add online retailing or dealing with intermediaries in more direct ways. Online social media accounts keep customers up-to-date on new produces. - As labor and environmental regulations change, an organization may be forced to modify its existing distribution channel structure to comply with new laws. - International governmental regulations can complicate the supply chain a great deal, as laws vary from country to country and businesses must make sure they comply with local regulations.

agents and brokers

- Agents and brokers negotiate purchases and expedite sales but do not take title to products. - Sometimes called functional middlemen, they perform a limited number of services in exchange for a commission, which generally is based on the product's selling price. - Agents represent either buyers or sellers on a permanent basis, whereas - Brokers are intermediaries that buyers or sellers employ temporarily.

family branding

- All of a firm's products are branded with the same name, or part of the name, such as the cereals Kellogg's Frosted Flakes, Kellogg's Rice Krispies, and Kellogg's Corn Flakes. - Unlike individual branding, family branding means that the promotion of one item with the family brand promotes the firm's other products. - Family branding can be a benefit when consumers have positive associations with brands, or a drawback if something happens to make consumers think negatively of the brand.

phase-out

- Allows the product to decline without a change in the marketing strategy. - With this strategy, no attempt is made to give the product new life.

drop shippers

- Also known as desk jobbers, take title to products and negotiate sales but never take actual possession of products. - They forward orders from retailers, business buyers, or other wholesalers to manufacturers and arrange for carload shipments of items to be delivered directly from producers to these customers. - They assume responsibility for products during the entire transaction, including the costs of any unsold goods.

physical distribution

- Also known as logistics, refers to the activities used to move products from producers to consumers and other end users. - Physical distribution activities may be performed by a producer, wholesaler, or retailer, or they may be outsourced. - Types of distribution activities include: physical distribution activities, including order processing, inventory management, materials handling, warehousing, and transportation.

brand licensing

- An agreement in which a company permits another organization to use its brand on other products for a licensing fee. - The licensee is responsible for all manufacturing, selling, and advertising functions and bears the costs if the licensed product fails. - The advantages of licensing range from extra revenues and the low cost of brand expansion to generating free publicity, developing a new image, or protecting a trademark. - The major disadvantages are a lack of manufacturing control and the risks of making consumers feel bombarded with too many unrelated products bearing the same name.

franchising

- An arrangement in which a supplier, or franchisor, grants a dealer, or franchisee, the right to sell products in exchange for some type of consideration. - The franchisor may receive a percentage of total sales in exchange for furnishing equipment, buildings, management know-how, and marketing assistance to the franchisee. - The franchisee supplies labor and capital, operates the franchised business, and agrees to abide by the provisions of the franchise agreement.

supply chain

- An important function of distribution is the joint effort of all involved organizations to create an effective supply chain, which refers to all the activities associated with the flow and transformation of products from raw materials through to the end customer.

catalog marketing

- An organization provides a catalog from which customers make selections and place orders by mail, telephone, or the Internet. - Retailers generally offer considerable product depth for just a few lines of products. - Still other catalog companies specialize in products from a single product line. - The retailer benefits by being able to locate in remote, low-cost areas, save on expensive store fixtures, and reduce both personal selling and store operating expenses. - Although, it is inflexible, provides limited service, and is most effective for a selected set of products.

retailer

- An organization that purchases products for the purpose of reselling them to ultimate consumers.

credence qualities

- Are attributes that customers may be unable to evaluate even after the purchase and consumption of the service. - Examples of services high in credence qualities are surgical operations, automobile repairs, and legal representation.

quality modifications

- Are changes relating to a product's dependability and durability. - Usually, the changes are executed by altering the materials or the production process. - Reducing a product's quality may allow an organization to lower its price and direct the item at a different target market. - In contrast, increasing the quality of a product may give a firm an advantage over competing brands.

perceptual maps

- Are created by questioning a sample of consumers about their perceptions of products, brands, and organizations with respect to two or more dimensions.

rack jobbers

- Are full-service, specialty-line wholesalers that own and maintain display racks in supermarkets, drugstores, and discount and variety stores. - Rack jobbers specialize in non-food items with high profit margins, such as health and beauty aids, books, magazines, hosiery, and greeting cards.

private distributor brands (private brands, store brands, dealer brands)

- Are initiated and owned by resellers—wholesalers or retailers. - The major characteristic of private brands is that the manufacturers are not identified on the products. - Retailers and wholesalers use private distributor brands to develop more efficient promotion, generate higher gross margins, and change store image. - Private distributor brands give retailers or wholesalers freedom to purchase products of a specified quality at the lowest cost without disclosing the identities of the manufacturers. - Familiar retailer brand names include Target's Archer Farms and Up and Up, Walmart's Great Value, and Whole Foods' 365 Everyday Value. - Sales of private labels have grown considerably as the quality of store brands has increased.

manufacturer brands

- Are initiated by producers and ensure that producers are identified with their products at the point of purchase—for example, Green Giant, Dell Computer, and Levi's jeans. - A manufacturer brand usually requires a producer to become involved in distribution, promotion, and to some extent, pricing decisions.

cash-and-carry wholesalers

- Are intermediaries whose customers—often small businesses—pay cash and furnish transportation. - Cash-and-carry wholesalers usually handle a limited line of products with a high turnover rate, such as groceries, building materials, and electrical or office supplies.

shopping products

- Are items for which buyers are willing to expend considerable effort in planning and making the purchase. - Buyers spend considerable time comparing stores and brands with respect to prices, product features, qualities, services, and perhaps warranties. - These products are expected to last a fairly long time and are more expensive than convenience products. - Inventory turnover is lower, and marketing channel members expect to receive higher gross margins to compensate for the lower turnover. - In certain situations, both shopping products and convenience products may be marketed in the same location. - A marketer must consider several key issues to market a shopping product effectively, including how to allocate resources, whether personal selling is needed, and cooperation within the supply chain.

MRO supplies

- Are maintenance, repair, and operating items that facilitate production and operations, but do not become part of the finished product. - These might include paper, pencils, cleaning supplies, and paints. - MRO supplies are sold through numerous outlets and are purchased routinely, much like convenience products in the consumer market.

sales branches

- Are manufacturer-owned intermediaries that sell products and provide support services to the manufacturer's sales force.

sales offices

- Are manufacturer-owned operations that provide services normally associated with agents.

convenience products

- Are relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort. - The buyer spends little time planning the purchase or comparing available brands or sellers. - Even a buyer who prefers a specific brand will generally choose a substitute if the preferred brand is not conveniently available. - Because sellers experience high inventory turnover, per-unit gross margins can be relatively low. - Packaging and displays are also important because many convenience items are available only on a self-service basis at the retail level.

warehouse showrooms

- Are retail facilities with five basic characteristics: large, low-cost buildings, warehouse materials-handling technology, vertical merchandise displays, large on-premises inventories, and minimal services.

product features

- Are specific design characteristics that allow a product to perform certain tasks. (walking, running, weightlifting shoes) - In general, the more features a product has, the higher its price and often the higher its perceived quality.

trade-offs

- Are strategic decisions to combine (and recombine) resources for greatest cost-effectiveness. - Goal is to not always find the lowest cost, but rather to find the right balance of costs.

raw materials

- Are the basic natural materials that actually become part of a physical product. - They include minerals, chemicals, agricultural products, and materials from forests and oceans

business services

- Are the intangible products that many organizations use in their operations. - They include financial, legal, marketing research, information technology, and janitorial services.

functional modifications

- Changes that affect a product's versatility, effectiveness, convenience, or safety. - Usually require that the product be redesigned. (making a tablet with a durable case or a keyboard and docking station or 3D TV) - Additionally, functional modifications can help an organization achieve and maintain a progressive image. - Finally, functional modifications are sometimes made to reduce the possibility of product liability lawsuits, such as adding a kill switch on a machine in case it malfunctions.

product modification

- Changing one or more characteristics of a product. - A product modification differs from a line extension in that the original product does not remain in the line. (new models of the same car) - Like line extensions, product modifications entail less risk than developing new products. - Product modification can indeed improve a firm's product mix, but only under certain conditions. - First, the product must be modifiable. - Second, customers must be able to perceive that a modification has been made. - Third, the modification should make the product more consistent with customers' desires so it provides greater satisfaction. - One drawback to modifying a successful product is that a consumer who had experience with the original version of the product may view a modified version as a riskier purchase.

channels for consumer products

- Channel A depicts the direct movement of products from producer to consumers. (haircut) - Channel B, which moves goods from the producer to a retailer and then to customers, is a frequent choice of large retailers because it allows them to buy in quantity from manufacturers. (Kmart & Walmart) - Channel C takes goods from the producer to a wholesaler, then to a retailer, and finally to consumers. (home appliances, hardware) - Channel D, wherein goods pass from producer, to agents, to wholesalers, to retailers, and finally to consumers, is used frequently for products intended for mass distribution, such as processed foods.

channels for business products

- Channel E illustrates the direct channel for business products. Especially expensive equipment, are most likely to be sold through direct channels. - In channel F, an industrial distributor facilitates exchanges between the producer and the customer. An industrial distributor is an independent business that takes title to products and carries inventories. (sell maintenance supplies, small operating equipment) Overall, these distributors can be most effective when a product has broad market appeal, is easily stocked and serviced, is sold in small quantities, and is needed on demand to avoid high losses. - Channel G, employs a manufacturers' agent, an independent businessperson who sells complementary products of several producers in assigned territories and is compensated through commissions. - Channel H includes both a manufacturers' agent and an industrial distributor. This channel may be appropriate when the producer wishes to cover a large geographic area, but maintains no sales force due to highly seasonal demand or because it cannot afford one.

the significance of marketing channels

- Channel decisions are critical because they determine a product's market presence and accessibility. - Marketing channel decisions have strategic significance because they generally entail long-term commitments among a variety of firms. - Furthermore, it is the least flexible component of the marketing mix; difficult to change.

administered VMS

- Channel members are independent, but informal coordination achieves a high level of inter-organizational management. - One channel member dominates the administered VMS to distribution decisions take the whole system into account.

form utility

- Channel members sometimes create form utility by assembling, preparing, or otherwise refining the product to suit individual customer needs.

hypermarkets

- Combine supermarket and discount store shopping in one location. - Retailers have struggled with making the hypermarket concept successful in the United States. - 225,000-325,000 square feet

corporate VMS

- Combines all stages of the marketing channel, from producers to consumers, under a single owner. - Maintains a maximum amount of control over the supply chain. - Inventory characterized by very high turnover and frequent changes. - Control over all stages of the supply chain enables companies to have speed and keep prices low.

vertical channel integration

- Combines two or more stages of the channel under one management. - May occur when one member of a marketing channel purchases operations of another or simply performs the functions of another member, eliminating the need for that intermediary. - A more progressive approach; channel members become extensions of one another as they are combined under a single management. - More effective against competition because of increased bargaining power and ease of sharing information and responsibilities. - Manufacturers may provide advertising and training assistance; Retailers might buy the manufacturers products in large quantities and actively promote them.

horizontal channel integration

- Combining organizations at the same level of operation under one management constitutes horizontal channel integration. - An organization may integrate horizontally by merging with other organizations at the same level in the marketing channel. (owner of a dry-cleaners may buy other dry-cleaners) - Not always the most effective. - Unless distribution functions are more efficient under unified management than under separate management, horizontal integration will neither reduce costs nor improve the competitive position of the integrating firm.

private warehousing

- Companies operate private warehouses for shipping and storing their own products. - Usually leases a private warehouse in a given geographic market that is substantial and stable enough to warrant a long-term commitment. - Private warehouses, however, face fixed costs, such as insurance, taxes, maintenance, and debt expense.

core product

- Consists of a product's fundamental utility or main benefit and usually addresses a fundamental need of the consumer.

four types of consumer products:

- Convenience - Shopping - Specialty - Unsought products.

channel cooperation

- Cooperation enables retailers, wholesalers, suppliers, and logistics providers to speed up inventory replenishment, improve customer service, and cut the costs of bringing products to the consumer. - Success of one firm depends in part of other firms. - Leads to greater trust and improves overall functioning of the channel. - Channel members should agree to direct efforts toward common objectives, to achieve these objectives effectively, channel members' roles should be defined precisely.

accessory equipment

- Does not become part of the final physical product but is used in production or office activities. - Examples include file cabinets, fractional-horsepower motors, calculators, and tools. - Compared with major equipment, accessory items usually are less expensive, purchased routinely with less negotiation, and are often treated as expense items rather than capital items because they are not expected to last as long.

non-profit organizations

- Educational institutions, churches, charities, and governments.

just-in-time (JIT)

- Efficient inventory management with accurate reorder points is crucial for firms that use a just-in-time (JIT) approach, in which supplies arrive just as they are needed for use in production or for resale. - Usually no safety stock in JIT.

repositioning

- Evaluating the positions of existing products is important because a brand's market share and profitability may be strengthened by product repositioning. - Repositioning requires changes in perception and usually changes in product features. - Repositioning can be accomplished by physically changing the product, its price, or its distribution. - Marketers sometimes reposition a product by changing its image through promotional efforts. - Finally, a marketer may reposition a product by aiming it at a different target market.

strategic channel alliance

- Exists when the products of one organization are distributed through the marketing channels of another. - Similar but not direct competitors.

customer relationship management (CRM) systems

- Exploit the information in supply-chain partners' information systems and make it available for easy reference. - Companies now offer online programs that integrate business data into a social networking site format. - By inputting all data into a single, easy-to-use online system, businesses can achieve greater efficiencies and improve their CRM.

run-out

- Exploits any strengths left in the product. - Intensifying marketing efforts in core markets or eliminating some marketing expenditures, such as advertising, may cause a sudden temporary jump in profits. - This approach is commonly taken for technologically obsolete products, such as older models of computers. - Often, the price is reduced to generate a sales spurt.

factory outlet malls

- Feature discount and factory outlet stores carrying traditional manufacturer brands, such as Polo Ralph Lauren, Nike, and Guess. - Manufacturers own these stores and make a special effort to avoid conflict with traditional retailers of their products. They place these stores in noncompetitive locations, often outside of metropolitan areas.

selecting a brand name

- First, the name should be easy for customers (including foreign buyers if the firm intends to market its products in other countries) to say, spell, and recall. - Second, the brand name should indicate in some way the product's major benefits and, if possible, should suggest the product's uses and special characteristics. Vanish toilet bowl cleaner, Formula 409 multipurpose cleaner, Cascade dishwasher detergent, and Wisk laundry detergent connote strength and effectiveness. - Third, to set it apart from competing brands, the brand should be distinctive. - Finally, a brand should be designed to be used and recognized in all types of media.

product life cycle

- Follows a similar trajectory to biological life cycles, progressing from birth to death. - Has four major stages: introduction, growth, maturity, and decline. - As a product moves through each cycle, the strategies relating to competition, pricing, distribution, promotion, and market information must be evaluated and possibly adjusted.

channel conflict

- For individual organizations to function together, each channel member must clearly communicate and understand role expectations. - Communication difficulties are a potential form of channel conflict because ineffective communication leads to frustration, misunderstandings, and ill-coordinated strategies, jeopardizing further coordination. - The internet has increased conflict among manufacturers and intermediaries, when manufacturers make their products available through the internet, it is employing a direct channel that competes with the retailers that also sell its products. - Channel conflicts also arise when intermediaries overemphasize competing products or diversify into product lines traditionally handled by other intermediaries. - No single way for resolving conflict, but, partnerships can be reestablished if two conditions are met: - First, the role of each channel member must be clearly defined and adhered to. - Second, members of channel partnerships must agree on means of coordinating channels, which requires strong, but not polarizing, leadership.

megacarriers

- Freight transportation companies that offer several shipment methods, including rail, truck, and air service.

search qualities

- Goods possess search qualities, tangible attributes like color, style, size, feel, or fit that can be evaluated prior to purchase.

bases for positioning

- Head-to-head competition may be a marketer's positioning objective if the product's performance characteristics are at least equal to those of competitive brands and if the product is priced lower. - Conversely, positioning to avoid competition may be best when the product's performance characteristics do not differ significantly from competing brands. - A product's position can be based on specific product attributes or features. - Other bases for product positioning include price, quality level, and benefits provided by the product.

competition

- In a highly competitive market, it is important for a company to maintain low costs so it can offer lower prices than its competitors if necessary to maintain a competitive advantage.

outsourcing

- Is the contracting of physical distribution tasks to third parties. - Most physical distribution activities can be outsourced to outside firms that have special expertise in areas such as warehousing, transportation, inventory management, and information technology. - May allow a firm to leverage the expertise of another firm while focusing on its core competencies and freeing up resources to develop value-added capabilities to better serve customers.

supplemental features

- Provide added value or attributes that are in addition to the product's core utility or benefit. - Supplemental product features often include perks such as free installation, guarantees, product information, promises of repair or maintenance, delivery, training, or financing.

developing marketing mixes

- In developing the product, nonprofit organizations usually deal with ideas and services. The marketing of ideas and concepts is more abstract than the marketing of tangibles, and much effort is required to present benefits. - Distribution decisions in nonprofit organizations relate to how ideas and services will be made available to clients. A very short channel—nonprofit organization to client—is the norm because production and consumption of ideas and services are often simultaneous. - Making promotional decisions may be the first sign that a nonprofit organization is performing marketing activities. - The different pricing concepts the nonprofit organization faces include pricing in user and donor markets. Two types of monetary pricing exist: fixed and variable. For other nonprofit organizations, financial price is an important part of the marketing mix. Nonprofit organizations today raise money by increasing the prices of their services or charging for previously free services.

client publics

- In nonprofit marketing, direct consumers of the product are called client publics

general publics

- In nonprofit marketing, indirect consumers of the product are called general publics.

installations

- Include facilities, such as office buildings, factories, and warehouses, and major nonportable equipment such as production lines and very large machines. - Normally, installations are expensive and intended to be used for a considerable length of time. - Often made by high-level management - Marketers of installations must frequently provide a variety of services, including training, repairs, maintenance assistance, and even aid in financing.

community shopping centers

- Include one or two department stores and some specialty stores, as well as convenience stores. - Draw consumers looking for shopping and specialty products not available in neighborhood shopping centers. - Serve larger geographic areas and consumers are willing to drive longer distances. - Such centers have wide product mixes and deep product lines.

retailing

- Includes all transactions in which the buyer is the ultimate consumer and intends to use the product for personal, family, or household purposes. - The key to success in retailing is to have a strong customer focus with a retail strategy that provides the level of service, product quality, and innovation that consumers desire.

merchant wholesalers

- Independently-owned businesses that take title to goods, assume risks associated with ownership, and generally buy and resell products to other wholesalers, business customers, or retailers.

generic brands

- Indicate only the product category and do not include the company name or other identifying terms. - These items are typically staples that would be marketed using an undifferentiated strategy because they lack special features, such as sugar, salt, or aluminum foil. - The prevalence of generic brands has decreased over time, particularly as the quality and value of private brands has increased.

seven categories of business products:

- Installations - Accessory equipment - Raw materials - Component parts - Process materials - MRO supplies (maintenance, repair, and operating) - Business services.

vertical marketing system (VMS)

- Integration has been successfully institutionalized in a marketing channel called the vertical marketing system (VMS), in which a single channel member coordinates or manages all activities to maximize efficiencies, resulting in an effective and low-cost distribution system that does not duplicate services. - Most vertical marketing systems take one of three forms: corporate, administered, or contractual.

inventory management

- Involves developing and maintaining adequate assortments of products to meet customers' needs.

retail positioning

- Involves identifying an unserved or underserved market segment and reaching it through a strategy that distinguishes the retailer from others in the minds of customers in the market segment.

logistics management

- Involves planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers' needs and wants.

packaging

- Involves the development of a container to hold a product. - It also conveys vital information about the product and is an opportunity to display interesting graphic design elements. - Like a brand name, a package can influence customers' attitudes toward a product and their decisions to buy an item. - Producers of jellies, sauces, and ketchups package their products in squeezable plastic containers that can be stored upside down, which make dispensing and storing the product more convenient. - Package characteristics help to shape buyers' impressions of a product at the time of purchase and during use.

product line

- Is a group of closely related product items that are considered to be a unit because of marketing, technical, or end-use considerations.

category management

- Is a retail strategy of managing groups of similar, often substitutable products produced by different manufacturers. - Successful category management involves collecting and analyzing data on sales and consumers and sharing the information between the retailer and manufacturer.

product item

- Is a specific version of a product that can be designated as a distinct offering among an organization's products. - Different dessert flavors or different shampoos for oily and dry hair are examples of product items in product lines

time utility

- Is having products available when the customer wants them. - Services like Netflix allow customers to watch a movie whenever they want.

service

- Is intangible. - It is the result of the application of human and mechanical efforts to people or objects. - EX: a performance by Beyonce, online car insurance, a medical examination

place utility

- Is making products available in locations where customers wish to purchase them. - For example, Zappos allows customers to shop for shoes and accessories anywhere they have access to a mobile device and an Internet connection.

marketing channels facilitate exchange efficiencies

- Marketing intermediaries can reduce the costs of exchanges by performing certain services or functions efficiently. - Intermediaries are specialists in facilitating exchanges.

direct selling

- Is the marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace. - EX: herbalife & mary kay - Direct selling is most successful in other countries, particularly collective societies like China. - Although the majority of direct selling takes place on an individual, or person-to-person, basis, it sometimes may be carried out in a group, or "party," plan format. - Most expensive form of retailing.

brand name

- Is the part of a brand that can be spoken—including letters, words, and numbers—such as 7UP or V8. - A brand name is essential, as it is often a product's only distinguishing characteristic without which a firm could not differentiate its products. - Marketers must make efforts, through promotional activities, to ensure that such brand names do not become generic terms, which are not protected under the law.

telemarketing

- Is the performance of marketing-related activities by telephone. - Restrictive laws on telemarketing.

labeling

- Is very closely related with packaging and is used for identification, promotional, informational, and legal purposes. - A label can be part of the package itself or a separate feature attached to the package. (label on a can vs label on bottle) - Information presented on a label may include the brand name and mark, the registered trademark symbol, package size and content, product features, nutritional information, presence of allergens, type and style of the product, number of servings, care instructions, directions for use and safety precautions, the name and address of the manufacturer, expiration dates, seals of approval, and other facts.

distribution center

- Large facilities used for receiving, warehousing, and redistributing products to stores or customers. - Rapid flow, access to transportation networks like highways or railways. - Most are privately owned.

department stores

- Large retail organizations with at least 25 employees that are characterized by wide product mixes. - Some department stores offer such additional services as automobile insurance, hair care, income tax preparation, and travel and optical services.

supermarkets

- Large, self-service stores that carry a complete line of food products and some non-food products such as cosmetics and nonprescription drugs. - Increased availability of grocery items at discount stores, premium markets, other competitors, and online have eroded supermarkets' market share of the grocery segment. - 20,000 square feet - Kroger, Publix

type of organization

- Larger companies are in a better position to deal with vendors or other channel members, more likely to have more distribution centers, and have an extensive product mix as a competitive tool. - Small companies that use regional or local channel members, might be in a strong position to cater its marketing mix to serve customers in that particular area. They also may not have the resources to develop their own sales force, ship their products long distances, maintain a large inventory, or extend credit.

superregional shopping centers

- Largest of regional shopping centers. - Have the widest and deepest product mixes and attract customers from many miles away. - EX: mall of america

brand name awareness

- Leads to brand familiarity, which results in a level of comfort with the brand. - A consumer is more likely to select a familiar brand than an unfamiliar one because the familiar brand is more likely to be viewed as reliable and of an acceptable level of quality.

public warehouses

- Lease storage space and related physical distribution facilities to other companies. - Public warehouses are especially useful to firms that have seasonal production or demand, low-volume storage needs, and inventories that must be maintained in many locations. Also useful for firms testing or entering new markets. - Offer variable (and possibly lower) costs because users rent space only as needed. - Field public warehouses are established by public warehouses at the owner's inventory location. The warehouser becomes custodian of the products and issues a receipt that can be used as collateral for a loan. - Public warehouses also provide bonded storage, a warehousing arrangement in which imported or taxable products are not released until the products' owners pay U.S. customs duties, taxes, or other fees.

location of retail stores

- Least flexible variable of the marketing mix.

choosing transportation modes

- Logistics managers select a transportation mode based on the combination of cost, speed, dependability, load flexibility, accessibility, and frequency that is most appropriate for their products and generates the desired level of customer service.

online retailing

- Makes products available to buyers through computer connections. - Online security is a serious concern.

radio frequency identification (RFID)

- Many firms use radio waves to track materials tagged with radio frequency identification (RFID) through every phase of handling. - RFID has greatly improved shipment tracking and reduced cycle times. - Hundreds of RFID tags can be read at a time, which represents an advantage over barcodes. (Disney wristbands)

competitive priorities in marketing channels

- Many well-known firms, including Amazon, Dell, FedEx, Toyota, and Walmart, owe much of their success to outmaneuvering rivals with unique supply-chain capabilities. - Supply chains driven by firm-established goals focus on the "competitive priorities" of speed, quality, cost, or flexibility as the performance objective.

selling agents

- Market either all of a specified product line or a manufacturer's entire output.

product attributes

- Marketers of complex and expensive products (like automobiles) will likely employ short channels, as will marketers of perishable products (such as dairy and produce). - Less-expensive standardized products with long shelf lives, like soft drinks and canned goods, can go through longer channels with many intermediaries. - Fragile products that require special handling are likely to be distributed through short channels to minimize the amount of handling and risk of damage.

marketing channels create utility

- Marketing channels create four types of utility: time, place, possession, and form.

social marketing

- Promotes social causes, such as AIDS research or recycling.

intangibility

- Means a service is not physical and therefore cannot be touched. - The major characteristic that distinguishes a service from a good is intangibility. - The characteristic of intangibility makes it difficult for customers to evaluate a service prior to purchase. - Service marketers should take steps to avoid sending messages that consumers might construe as promises that raise customer expectations beyond what the firm can provide.

possession utility

- Means that the customer has access to the product to use or to store for future use. - Possession utility can occur through ownership or through arrangements that give the customer the right to use the product, such as a lease or rental agreement.

marketing intermediaries

- Most channels, however, have one or more marketing intermediaries that link producers to other intermediaries or to ultimate consumers through contractual arrangements or through the purchase and reselling of products. - They also play key roles in customer relationship management, not only through their distribution activities but also by maintaining databases and information systems to help all members of the marketing channel maintain effective customer relationships. - Wholesalers and retailers are examples of intermediaries. - Wholesalers buy and resell products to other wholesalers, retailers, and industrial customers. - Retailers purchase products and resell them to end consumers.

brand recognition

- Occurs when a customer is aware that the brand exists and views it as an alternative purchase if the preferred brand is unavailable or if the other available brands are unfamiliar. - The weakest form of brand loyalty

direct-response marketing

- Occurs when a retailer advertises a product and makes it available through mail, telephone, or online orders. - EX: TV commercials, advertisement for series of children's books. - Direct-response marketing is also conducted by sending letters, samples, brochures, or booklets to prospects on a mailing list and asking that they order the advertised products by mail or telephone. - Must be priced over $20.

brand extension

- Occurs when an organization uses one of its existing brands to brand a new product in a different product category. - If a brand is extended too many times or extended too far outside its original product category, it can be weakened through dilution of its image and symbolic impact. - Research has found that a line extension into premium categories can be an effective strategy to revitalize a brand, but the extension needs to be closely linked to the core brand.

immediate drop

- Of an unprofitable product, is the best strategy when losses are too great to prolong the product's life.

service quality specifications

- Once an organization understands its customers' needs, it must establish goals to help ensure good service delivery. - These goals, or service specifications, are typically set in terms of employee or machine performance. - For example, a bank may require its employees to conform to a dress code. - Perhaps the most critical aspect of service quality specifications is managers' commitment to service quality.

packaging functions

- Packaging materials first and foremost serve the basic purpose of protecting the product and maintaining its functional form. - Fluids, like milk or orange juice, require packages that are waterproof and durable to preserve and protect their contents. - Packaging techniques have also been developed to prevent product tampering, as this has been a major problem for many firms. - Another function of packaging is to offer convenience to consumers. - Another function of packaging is to promote a product by communicating its features, uses, benefits, and image. - Finally, packaging can be used to communicate symbolically the quality or premium nature of a product. It can also evoke an emotional response.

full service wholesalers

- Perform the widest possible range of wholesaling functions. - Although full-service wholesalers often earn higher gross margins than other wholesalers, their operating expenses are also higher because they perform a wider range of functions. - General merchandise wholesalers carry a wide product mix but offer limited depth within product lines. They deal in products such as drugs, nonperishable foods, cosmetics, detergents, and tobacco. - Limited-line wholesalers carry only a few product lines, such as groceries, lighting fixtures, or oil-well drilling equipment, but offer an extensive assortment of products within those lines. - Specialty-line wholesalers offer the narrowest range of products, usually a single product line or a few items within a product line.

commercialization

- Plans for full-scale manufacturing and marketing must be refined and settled and budgets for the project prepared. - During the early part of this stage, marketers must not only gear up for larger-scale production, but also make decisions about warranties, repairs, and replacement parts. - With a rollout, a product is introduced starting in one geographic area or set of areas and gradually expands into adjacent ones. - Gradual product introduction is desirable for several reasons. - First, it reduces the risks of introducing a new product. - Second, a company cannot introduce a product nationwide overnight, because a system of wholesalers and retailers to distribute the product cannot be established so quickly. - Third, if the product is successful from launch, the number of units needed to satisfy nationwide demand for it may be too large for the firm to produce in a short time. - Finally, gradual introduction allows for fine-tuning of the marketing mix to satisfy target customers. - If competitors see that the newly introduced product is successful, they may quickly enter the same target market with similar products. - In addition, as a product is introduced region by region, competitors may expand their marketing efforts to offset promotion of the new product.

specialty products

- Possess one or more unique characteristics, and generally buyers are willing to expend considerable effort to obtain them. - On average, this is the most expensive category of products. - Buyers conduct research, plan the purchase of a specialty product, know exactly what they want, and will not accept a substitute. - Specialty products are often distributed through a very limited number of retail outlets. - They are purchased infrequently, causing lower inventory turnover and thus requiring high gross margins to be profitable.

television home shopping

- Presents products to television viewers, encouraging them to order through toll-free numbers and pay with credit cards. - EX: home shopping network - This method is particularly popular among older consumers, who tend to be less comfortable with online shopping and are less mobile to physically go to a store.

the maturity stage

- Sales peak and start to level off or decline, and profits continue to fall - This stage is characterized by intense competition because many brands are now in the market. - Advertising and dealer-oriented promotions are typical during this stage of the product life cycle. - Consumers are no longer inexperienced generalists. They have become experienced specialists. - Marketers of mature products sometimes expand distribution into global markets, in which case products may have to be adapted to fit differing needs of global customers more precisely. - To increase the sales of mature products, marketers may suggest new uses for them.

the growth stage

- Sales rise rapidly and profits reach a peak and then start to decline - The growth stage is critical to a product's survival because competitive reactions to the product's success during this period will affect the product's life expectancy. - Profits begin to decline late in the growth stage as more competitors enter the market, driving prices down and creating the need for heavy promotional expenses. - Marketers should analyze competing brands' product positions relative to their own and make adjustments to the marketing mix in response to their findings. - The goal of the marketing strategy in the growth stage is to establish and fortify the product's market position by encouraging adoption and brand loyalty. - Promotion expenditures in the growth stage may be slightly lower than during the introductory stage, but are still large.

selecting marketing channels

- Selecting appropriate marketing channels is important because they are difficult to change once chosen.

employee performance

- Service organizations that excel realize that contact employees are the most important link to the customer, and thus their performance is critical to customer perceptions of service quality. - Contact employees in most service industries (bank tellers, flight attendants, servers, sales clerks, etc.) are often the least-trained and lowest-paid members of the organization. - There is a direct relationship between the satisfaction of a company's contact employees, which is manifested in a positive attitude and a good work ethic, and the satisfaction of its customers. - Employee and customer satisfaction levels also have a direct relationship with customer retention and loyalty.

heterogeneity

- Services delivered by people are susceptible to heterogeneity, or variation in quality. - Because of the nature of human behavior, however, it is very difficult for service providers to maintain a consistent quality of service delivery. (hairstylists) - Training should offer ways that will help employees provide quality service consistently to customers, thus mitigating the issue of heterogeneity. - However, heterogeneity provides one advantage to service marketers: It allows them to customize their services to match the specific needs of individual customers.

experience qualities

- Services possess experience and credence qualities. - Experience qualities are attributes, such as taste, satisfaction, or pleasure, that can be assessed only during the purchase and consumption of a service. - Restaurants and vacations are examples of services high in experience qualities

stockouts

- Shortages of products.

channel captain

- Some marketing channels, however, are organized and controlled by a single leader, or channel captain (also called channel leader). - The channel captain may be a producer, wholesaler, or retailer. - Channel captains may establish channel policies and coordinate development of the marketing mix. - Increasingly, leading retailers are concentrating their buying power among fewer suppliers, which makes it easier to coordinate and maintain a high level of quality and transparency along the entire supply chain.

peak demand

- Some services are time sensitive, meaning that a significant number of customers desire the service around the same time. - A provider of time-sensitive services brings in most of its revenue during peak demand. - Customers can receive better deals on services by purchasing during nonpeak times. - Providers of time-sensitive services can use demand-based pricing to manage the problem of balancing supply and demand. They charge top prices during peak demand and lower prices during off-peak demand to encourage more customers to use the service. (why matinee movies are cheaper)

innovative packaging

- Sometimes a marketer employs a unique cap, design, applicator, or other feature to make a product distinctive. - Such packaging can be effective when the innovation makes the product safer, easier to use, or provides better protection. - Marketers also use innovative or unique packages that are inconsistent with traditional packaging practices to make the brand stand out from its competitors. (wine cups) - Researchers suggest that uniquely shaped packages that attract attention are likely to be perceived as containing a higher volume of product than comparable products that generate less attention.

truck wholesalers

- Sometimes called truck jobbers, transport a limited line of products directly to customers for on-the-spot inspection and selection. - They are often small operators who own and drive their own trucks. - They usually have regular routes, calling on retailers and other institutions to determine their needs.

specialty retailers

- Specialty retailers emphasize narrow and deep assortments. - They offer substantial assortments in a few product lines. - We examine three types of specialty retailers: traditional specialty retailers, category killers,

off-price retailers

- Stores that buy manufacturers' seconds, overruns, returns, and off-season production runs at below-wholesale prices for resale to consumers at deep discounts. - Off-price stores charge 20 to 50 percent less than department stores for comparable merchandise but offer few customer services. - Department stores tolerate off-price stores as long as they do not advertise brand names, limit merchandise to last season's or lower-quality items, and are located away from the department stores. - TJ Maxx and Stein Mart

traditional specialty retailers

- Stores that carry a narrow product mix with deep product lines. - Specialty retailers commonly sell such shopping products as apparel, jewelry, sporting goods, fabrics, computers, and pet supplies. - Sunglass Hut and Foot Locker - Because they are usually small, specialty stores may have high costs in proportion to sales, and satisfying customers may require carrying some products with low turnover rates. - Their main competitors are department stores

selective distribution

-Uses only some available outlets in an area to distribute a product. - Selective distribution is appropriate for shopping products, which include durable goods like televisions or computers.

line extension

- The development of a product that is closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs. (diet soda for women; dr. pepper 10 for men) - Line extensions are more common than new products because they are a less-expensive, lower-risk alternative for increasing sales. - A line extension may focus on a different market segment or attempt to increase sales within the same market segment by more precisely satisfying the needs of people in that segment. - The success of a line extension is enhanced if the parent brand has a high-quality brand image and if there is a good fit between the line extension and its parent. - Line extensions, when successfully applied, can take market share from competitors. (dyson & swiffer sweepervac)

distribution

- The distribution component of the marketing mix focuses on the decisions and activities involved in making products available to customers when and where they want to purchase them.

brand mark

- The element of a brand that is comprised of words—often a symbol or design. - Examples of brand marks include the McDonald's Golden Arches, Nike's "swoosh," and Apple's silhouette of an apple with a bite missing.

air transportation

- The fastest but most expensive form of shipping.

screening

- The ideas with the greatest potential are selected for further review. - During screening, product ideas are analyzed to determine if they match the organization's objectives and resources. - A firm's overall abilities to produce and market the product are also analyzed. - Most new product ideas are rejected during the screening phase.

laggards

- The last to adopt a new product, are oriented toward the past. - They are suspicious of new products, and when they finally adopt them, it may already have been replaced by an even newer product.

brand equity

- The marketing and financial value associated with a brand's strength in a market. - Four major elements underlie brand equity: brand name awareness, brand loyalty, perceived brand quality, and brand associations.

pipelines

- The most automated transportation mode, usually belong to the shipper and carry the shipper's products. - Most pipelines carry petroleum products or chemicals. - Move products slowly but continuously at a relatively low cost. - Contents are subject to shrinkage from evaporation, which can result in profit losses.

contractual VMS

- The most popular type of vertical marketing system. - Channel members are linked by legal agreements spelling out each member's rights and obligations. - Independent retailers band together under the contractual leadership of a wholesaler.

transportation

- The movement of products from where they are made to intermediaries and end users, is the most expensive physical distribution function. - The basic transportation modes for moving physical goods are railroads, trucks, waterways, airways, and pipelines.

product development

- The phase in which the organization determines if it is technically feasible to produce the product and if it can be produced at costs low enough to make the final price reasonable. - To test its acceptability, the idea or concept is converted into a prototype, or working model. - After a prototype is developed, its overall functioning must be assessed. - Its performance, safety, convenience, and other functional qualities are tested both in a laboratory and in the field. - Functional testing should be rigorous and lengthy enough to test the product thoroughly. - In determining the specific level of quality that is best for a product, a marketer must ascertain approximately what price the target market views as acceptable. - Lengthy and expensive process. - As a result, only a relatively small number of product ideas are put into development. - Marketers begin to make decisions regarding branding, packaging, labeling, pricing, and promotion for use in the test marketing stage.

styling

- The physical appearance of the product.

atmospherics

- The physical elements in a store's design that appeal to consumers' emotions and encourage buying, help to create an image and position a retailer. - Exterior atmospheric elements include the appearance of the storefront, display windows, store entrances, and degree of traffic congestion. - Interior atmospheric elements include aesthetic considerations, such as lighting, wall and floor coverings, dressing facilities, and store fixtures.

materials handling

- The physical handling of tangible goods, supplies, and resources, is an important factor in warehouse operations, as well as in transportation from points of production to points of consumption. - Product characteristics often determine handling - Internal packaging is also an important consideration in materials handling. - Unit loading and containerization are two common methods used in materials handling. - Unit loading, one or more boxes are placed on a pallet or skid. (loaded via forklift, trucks, or conveyer systems) - Containerization is the consolidation of many items into a single, large container that is sealed at its point of origin and opened at its destination. (shipped via train, barge, or ship because they are a uniform size)

pricing of services

- The prices of such services as pest-control, dry cleaning, carpet cleaning, and health consultations are usually based on the performance of specific tasks. - Other service prices are based on time spent on the task. For example, attorneys, consultants, counselors, piano teachers, and plumbers usually charge by the hour or day.

product differentiation

- The process of creating and designing products so customers perceive them as different from competing products. - Three aspects of product differentiation that companies must consider when creating and offering products for sale: product quality, product design and features, and product support services.

product deletion

- The process of eliminating a product from the product mix, usually because it no longer satisfies a sufficient number of customers. - There are three basic ways to delete a product: phase it out, run it out, or drop it immediately

dual distribution

- The use of two or more marketing channels to distribute the same products to the same target market. - The courts view a manufacturer that uses company-owned outlets to dominate or drive out of business independent retailers or distributors that handle its products as a threat to competition. - To avoid this interpretation, producers should use outlet prices that do not severely undercut independent retailers' prices.

business analysis

- The product idea is evaluated to determine its potential contribution to the firm's sales, costs, and profits. - It is also crucial that a firm determine whether its research, development, engineering, and production capabilities are adequate to develop the product; whether new facilities must be constructed, how quickly they can be built, and how much they will cost; and whether the necessary financing for development and commercialization is on hand or is obtainable based upon terms consistent with a favorable return on investment. - Firms seek market information. - The results of customer surveys, along with secondary data, supply the specifics needed to estimate potential sales, costs, and profits. - At times, an organization also uses payback analysis, in which marketers compute the time period required to recover the funds that would be invested in developing the new product.

order processing

- The receipt and transmission of sales order information. - When carried out quickly and accurately, order processing contributes to customer satisfaction, decreased costs and cycle time, and increased profits. - Order processing entails three main tasks: order entry, order handling, and order delivery. - Order entry begins when customers or salespeople place purchase orders via telephone, regular mail, e-mail, or website; electronic ordering has become the most common. - Order handling involves several tasks. Once an order is entered, the warehouse verifies product availability and the customer's credit account is checked. - When the order has been assembled, it is packed for shipment.

packaging and marketing strategy

- The right type of package for a new product can help it gain market recognition very quickly. - In the case of existing brands, marketers should reevaluate packages periodically. Marketers should view packaging as a strategic tool, especially for consumer convenience products. - When considering the strategic uses of packaging, marketers must also analyze the cost of packaging and package changes.

disadvantages of manufacturers' agents

- The seller has little control over the actions of manufacturers' agents. - Because they work on commission, manufacturers' agents prefer to concentrate on larger accounts. - They are often reluctant to spend time following up with customers after the sale, putting forth special selling efforts, or providing sellers with market information because they are not compensated for these activities and they reduce the amount of productive selling time. - Because they rarely maintain inventories, manufacturers' agents have a limited ability to provide customers with parts or repair services quickly.

nonstore retailing

- The selling of products outside the confines of a retail facility.

supply-chain management

- The set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so that products are produced and distributed in the right quantities, to the right locations, and at the right times. - Technology has improved supply-chain management capabilities globally. - With integrated information sharing among chain members, firms can reduce costs, improve services, and provide increased value to the end customer. - Firms now understand that managing the entire supply chain is critically important in ensuring that customers get the products when, where, and how they want them. - To ensure quality and customer satisfaction, firms must be involved in the management of every aspect of their supply chain, in close partnership with all involved upstream and downstream organizations. - Supply-chain management should begin with a focus on the customer, who is the ultimate consumer and whose satisfaction should be the goal of all the efforts of channel members.

brand insistence

- The strongest and least common level of brand loyalty. - A customer will accept no substitute and is willing to spend a great deal of time and effort to acquire that brand. - If a brand-insistent customer goes to a store and finds the brand unavailable, he or she will seek the brand elsewhere rather than purchase a substitute.

client-based relationships

- The success of many services depends on creating and maintaining client-based relationships, which are interactions that result in satisfied customers who use a service repeatedly over time. - Word-of-mouth (or going viral, which is the online equivalent) is a key factor in creating and maintaining client-based relationships.

cycle time

- The time needed to complete a process. - Reducing cycle time while maintaining or reducing costs and/or maintaining or increasing customer service is a winning combination in supply chains and ultimately leads to greater end-customer satisfaction.

operations management

- The total set of managerial activities used by an organization to transform resource inputs into goods, services, or both.

perishability

- The unused service capacity of one time period cannot be stored for future use. (empty seats on an airline flight today cannot be stored and sold to passengers at a later date) - Goods are generally less perishable than services.

automatic vending

- The use of machines to dispense products. - One of the most impersonal form of retailing & accounts for a very small minority of all retail sales.

nonprofit-organization marketing

- The use of marketing concepts and techniques by organizations whose goals do not include making profits.

direct marketing

- The use of the telephone, Internet, and nonpersonal media to communicate product and organizational information to customers, who can then purchase products via mail, telephone, or the Internet.

co-branding

- The use of two or more brands on one product. - Marketers employ co-branding to capitalize on the brand equity of multiple brands. - The brands used for co-branding can be owned by the same company. For instance, Benjamin Moore partnered with the retailer, Target, to release a co-branded line of paint colors that coordinate with Target's kids' furniture and accessories collection. - The brands should not lose their identities, and it should be clear to customers which brand is the main brand. - It is important for marketers to understand before entering a co-branding relationship that when a co-branded product is unsuccessful, both brands are implicated in the failure.

opportunity cost

- The value of the benefit given up by selecting one alternative over another.

power shopping center

- These centers may be anchored by popular stores, such as the Gap, Toys 'R' Us, PetSmart, and Home Depot.

intermodal transportation

- To take advantage of the benefits offered by various transportation modes and compensate for shortcomings, marketers often combine and coordinate two or more modes. - Intermodal transportation is easier than ever because of developments within the transportation industry. - Combines trucking with the low cost or speed of other transportation. - Piggyback (using truck trailers and railway flatcars). - Fishyback (using truck trailers and water carriers). - Birdyback (using truck trailers and air carriers).

lifestyle shopping center

- Typically an open-air shopping center that features upscale specialty stores, dining, and entertainment, all usually owned by national chains.

mail-order wholesalers

- Use catalogs instead of a sales force to sell products to retail and business buyers. Wholesale mail-order houses generally feature cosmetics, specialty foods, sporting goods, office supplies, and automotive parts.

intensive distribution

- Uses all available outlets for distributing a product. - Appropriate for products that have a high replacement rate, require almost no service, and are bought based on price cues. (convenience items)

electronic data interchange (EDI)

- Uses computer technology to integrate order processing with production, inventory, accounting, and transportation. - EDI functions as an information system that links marketing channel members and outsourcing firms together. - It reduces paperwork for all members of the supply chain and allows them to share information on invoices, orders, payments, inquiries, and scheduling.

exclusive distribution

- Uses only one outlet in a relatively large geographic area. - This method is suitable for products purchased infrequently, consumed over a long period of time, or that require a high level of customer service or information. (luxury automobiles, expensive watches)

neighborhood shopping centers

- Usually consist of several small convenience and specialty stores, such as small grocery stores, gas stations, and fast-food restaurants. - Target market is people who live 2-3 miles within their stores, or a 10 minutes' driving time. - Generally, product mixes consist of essential products, and depth of the product lines is limited.

regional shopping centers

- Usually have the largest department stores, widest product mixes, and deepest product lines of all shopping centers. - Target markets may include consumers traveling from a distance to find products and prices not available in their hometowns.

exclusive dealing

- When a manufacturer forbids an intermediary to carry products of competing manufacturers, the arrangement is called exclusive dealing. - If the exclusive dealing blocks competitors from as much as 15 percent of the market, the sales volume is large, and the producer is considerably larger than the retailer, then the arrangement is considered anticompetitive. - If dealers and customers in a given market have access to similar products or if the exclusive-dealing contract strengthens an otherwise weak competitor, the arrangement is allowed.

tying agreement

- When a supplier (usually a manufacturer or franchisor) furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well, it has negotiated a tying agreement. - A related practice is full-line forcing, in which a supplier requires that channel members purchase the supplier's entire line to obtain any of the supplier's products. - The courts accept tying agreements when the supplier is the only firm able to provide products of a certain quality, when the intermediary is free to carry competing products as well, and when a company has just entered the market; most others are considered illegal.

demand-based pricing

- When demand for a service is high, the price is also high. - Conversely, when demand for a service is low, so is the price.

perishability of services

- When demand is low, the unused capacity cannot be stored and is lost—resulting in forgone revenues for the firm.

breakeven point

- When profits match expenses.

developing nonprofit marketing strategies

- Whereas a business seeks out target groups that are potential purchasers of its product, a nonprofit organization may attempt to serve many diverse groups. - A target public is a collective of individuals who have an interest in or a concern about an organization, a product, or a social cause.

manufacturers agents

- Which account for more than half of all agent wholesalers, are independent intermediaries that represent two or more sellers and usually offer complete product lines to customers. - Manufacturers' agents are commonly used in sales of apparel, machinery and equipment, steel, furniture, automotive products, electrical goods, and some food items.

homesourcing

- Which customer-contact jobs, such as at call centers, are outsourced to the homes of workers.

superstores

- Which originated in Europe, are giant retail outlets that carry not only the food and non-food products ordinarily found in supermarkets, but routinely-purchased consumer products such as housewares, hardware, small appliances, clothing, and personal-care products as well. - Combine features of discount stores and supermarkets and carry about four times as many items as supermarkets. - Examples include Walmart Supercenters, some Kroger stores, SuperTarget stores, and Super Kmart Centers. - 200,000 square feet.

category-consistent packaging

- With category-consistent packaging, the product is packaged in line with the packaging practices associated with a particular product category. (red and white for soup) - When an organization introduces a brand in one of these product categories, marketers will often use traditional package shapes and color combinations to ensure that customers will recognize the new product as being in that specific product category.

refusal to deal

- Within existing distribution channels, however, suppliers may not legally refuse to deal with wholesalers or dealers merely because these wholesalers or dealers resist policies that are anticompetitive or in restraint of trade. - Suppliers are further prohibited from organizing some channel members in refusal-to-deal actions against other members that choose not to comply with illegal policies.

the four factors that affect service quality:

1. analysis of customer expectations 2. service quality specifications 3. employee performance 4. management of service expectations

early adopters

Choose new products carefully and are viewed as people who are in-the-know by those in the remaining adopter categories.

total product offering:

Has three interdependent elements: - the core product - its supplemental features - its symbolic or experiential benefits.

width of product mix

Is measured by the number of product lines a company offers.

depth of product mix

Is the average number of different product items offered in each product line.

product mix

Is the composite, or total, group of products that an organization makes available to customers.

labels on nonedible items

Labels on nonedible items, such as shampoos and detergents, must include both safety precautions and directions for use.

consumer products

Products purchased to satisfy personal and family needs

The Nutrition Labeling Act of 1990

Requires the FDA to review food labeling and packaging for nutrition content, label format, ingredient labeling, food descriptions, and health messages.

Federal Trade Commission (FTC)

The FTC requires that "all or virtually all" of a product's components be made in the United States if the label says "Made in USA."

trade name

The full and legal name of an organization, such as Ford Motor Company, rather than the name of a specific product.

family packaging

To promote an overall company image, a firm may decide that all packages should be similar or should all feature a major design element.