MARK 201 Exam 3 (Pt. 2)
factors that influence future changes in services
- technology -improved understanding -social imperative for sustainability
Evaluative properties
-search (size, color) -experience (restaurant, child care) -credence (services provided by specialized professionals)
elastic demand
1% decrease in price leads to 1% or more increase in quantity demanded (% change in Q/ % change in P)
Inelasticity
1% decrease in price leads to less than !5b change in quantity demanded
five categories of product adopters
1. Innovators 2. Early Adopters 3. Early Majority 4. Late Majority 5. Laggards
3 major benefits of packaging and labeling
1. communication 2. functional (storage convenience) 3. perceptual (build brand equity)
4 main types of consumer products
1. convenience (purchased frequently) 2. shopping (makes comparison on alternatives) 3. specialty (special effort) 4. unsought (didn't know about; didn't initially want)
Test market
1.) standard 2.) controlled 3.) simulated
Oligopoly
A market structure in which a few large firms dominate a market
As Apple's CEO, the late Steve Jobs orchestrated innovations that revolutionized five different industries. Which industry below is not one of them?
Cable television
Standard test market
City is selected that is demographically representative of the markets targeted for the new product
All of the following statements about price are true except which?
For most products and services, there is an agreed upon price range set by makers
Which of the following statements is most accurate?
For some products, price influences perception of overall quality and ultimately value to consumers
Development Stage
Internal and External testing. Internal: lab tests for quality and safety external: market test exposing products to prospective consumers
protocol
Product recipe
All of the following comprise the seven Ps of services marketing except which
Profitability
objectives
Specific, short-term statements detailing how to achieve the organization's goals.
inconsistency of services refers to the fact that
The performance of one employee may vary from the performance of another employee even though they may be employed by the same firm
All of the following are true about the length of product life cycle except which?
There is no set time that a product takes to move through its life cycle
Idle production capacity affects service delivery and is defined as
a situation where a service provider is available but there is no demand for service
in marketing, an idea is
a thought that leads to a product or action
express warranty
a written guarantee
trading up (repositioning)
adding value & quality
Controlled test market
an entire test program conducted by an outside service in a market in which it can guarantee distribution
A nondurable good is defined as
an item consumed in one or a few uses
marketing metric to find weak sales
annual percentage change in unit volume by state
implied warranty
assign responsibility for product deficiencies to the manufacturer
Why can an "insignificant point of difference" lead to new-product failure?
characteristics of a product must give clear difference of unique benefits
off-peak pricing
charging different prices during different times of the day or days of the week to reflect variations in demand for the service
Internal screening
company employees evaluate the technical feasibility of new-product ideas to determine whether they meet the objectives defined in the new-product strategy development stage
consumer-driven prices
comparison from store and online
raw materials, such as grain or lumber, as well as assemblies or parts are referred to as
components
while pricing objectives frequently reflect corporate goals, pricing constraints often relate to
conditions existing in the marketplace
What kind of innovation would an electronic toothbrush be
continuous innovation; no need to learn
variable costs
costs that vary with the quantity of output produced
why do firms add new tech and automation when they increase fixed cost
creates profit beyond the Break even point because of higher production with new technology
To reduce uncertainty created by _________ properties, service consumers turn to personal sources of information such as opinion leaders, early adopters, and reference group members during the purchase decision process
credence
Sales exhibit a downward trend throughout which stage of the product life cycle?
decline
services can be classified according to whether they are
delivered by people or equipment
trading down (repositioning)
downsizing & reducing quality
External Screening
evaluation consists of preliminary concept testing of the new-product idea (not the actual product itself) using written descriptions, sketches, mockups, or promotional literature with consumers.
Services such as restaurants and childcare, have __________ properties, which can only be discerned after purchase or during consumption.
experience
shift of demand curve
factors change, pricing and substitutes
movement along the demand curve
factors stay unchanged, but price is lowered or increased
A good has tangible attributes that a consumer's __________ can perceive.
five senses
break-even point equation
fixed cost / (unit price - unit variable cost)
consumer products are classified into four categories based on the effort the consumer spends on the decision, the attributes used in making the purchase decision and the...
frequency of purchase
carrying costs
high (salaries) or low (commission)
According to the price equation, final price equals list price minus ________ plus extra fees
incentives and allowances
The interaction between a service provider and the consumer such that the two of them co-create value together is due to which element unique to services
inseparability
Four I's of Services
intangibility, inconsistency, inseparability, inventory
Commercialization
introducing a new product into the market
Advertising plays a major role in the ___________ stage of the product life cycle, and ________ plays a major role in maturity
introduction; product differentiation
advertising plays a major role in the _______ stage of the product life cycle and _______ plays a major role in the maturity
introductory; product differentiation
constraints
limit range of prices
The use of "special fees" and "surcharges" is driven by consumers' zeal for ________ combined with the ease of making price comparisons on the internet
low prices
_______ products have a life cycle that reflects benefits that are readily understood by consumers, and because the products are easily imitated by competitors, the appropriate marketing strategy is to broaden distribution quickly
low-learning
monopolistic competition
many sellers who compete on nonprice factors
pure competition
many sellers who follow the market price for identical, commodity products
capacity management
matching demand with capacity
role of product manager
modify product, modify market, reposition product
Gatorade offers a range of product offerings. The firm uses one name for all its products in a product class. Gatorade is using a __________ strategy.
multi-branding or family branding
create a new use situation
new uses for existing products
which of the following are elements involved in Step 1 of the price-setting process
objectives and constraints
pure monolopy
one seller; price is up to them
Main sources of new product ideas
open innovation: employee suggestions
During the introduction stage of the product life cycle, the strategy that discourages competitive entry by charging a low price for new product is referred to as _________ pricing
penetration
services can be classified by their delivery. Services such as management consulting, plumbing, and cleaning are considered
people-based services
Primary demand is a desire for the ________ rather than for a ________; it might be the focus of marking when there are few competitors with the same product
product class; specific brand
A concept that describes the stage a product goes through in the marketplace-- introduction, growth, maturity, and decline-- is referred to as the
product life cycle
A group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range are referred to as
product line
According to the service continuum, what are offerings such as neckties, dog food, and tailored suits
product-dominated offerings
Organizations attempt to reduce inconsistency in their services by
providing standardization and training
simulated test markets
replicates a full scale test market
low learning product
sales begin immediately because little learning is required by the consumer and the benefits of purchase are readily understood
seller driven pricing actions
seller changes online prices
intangible items such as theater performances, legal advice, or music streaming that an organization provides to consumers are referred to as
services
which type up of consumer product is purchased relatively infrequently and the purchase decision takes some time because the consumer compares offerings during the shopping experience?
shopping product
To help consumers assess and compare services, marketers try to make them tangible or __________.
show the benefits of using the service
high learning product
significant customer education is required and there is an extended introductory period
to eliminate service inconsistencies, companies rely on...
standardization; training
What is the marketing objective for the growth stage of the product life cycle
stress differentiation
All of the following marketing actions can be used by a firm to counteract barriers to product adoption except which?
targeting new consumers
Price refers to
the money or other considerations (including other products and services) exchanged for the ownership or use of a product or service
break-even point
the point at which the costs of producing a product equal the revenue made from selling the product
Profit=
total revenue - total cost or (unit price X quantity sold)-(fixed+variable)
if a consumer is reluctant to try a new product because he'd have to change his normal everyday behaviors, the company introducing it most likely is facing a _______ barrier
usage
New product strategy development
using SWOT analysis and environmental scanning it defines the role for a new product in terms of the firm's overall objectives
The ratio of perceived benefits to price is referred to as
value