Chapter 12: Dimensions of Marketing Strategy

*Product Line

- a group of closely related product items - ex: Choice, Coke, Diet Coke, Vanilla Coke, Coke with Lemon

*Product Mix

- all products that an organization sells - ex: ATM machine, online banking, safe deposit box, savings accounts

Business Analysis

- assessing the potential profitability of the product - is the product compatible with the marketplace? - will the product be profitable?

During the business analysis stage of new product development, products are analyzed for their

- compatibility in the marketplace - potential profitability

4 Steps: Calculating Product Value

- identify target customers - identify their best alternative - determine the product's difference - calculate the value based on its differentiation

The stages of the product life cycle are ______.

- introduction - growth - maturity - decline

Direct Marketing Channel

- more than half of all business products are sold through it - business customers purchasing expensive equipment or technically complex products like to communicate with producers for technical assistance

Which three utilities are provided by marketing intermediaries, also known as middlemen?

- place - time - ownership

What three actions by marketing managers are likely to occur during the decline stage of the product life cycle?

- plans may be made for phasing out the product and introducing new ones to take its place - marketing expenditures may be cut - certain models or items may be eliminated

Which three items are signs that a product is in the maturity stage of the product life cycle?

- profits decline - sales peak and start to decline - competition is severe

Product's Package Functions

- promotion - convenience - economy - protection

Which three items characterize the decline stage of the product life cycle? Multiple select question.

- rapid drop in sales - elimination of models or items - disappearing profits

*Test Marketing

- taking a product idea to consumers to test their reactions - ex: a trial mini-launch of a product in a limited area

Which of the following can influence buyer demand?

- the economy - the presence of substitutes - change in buyers' needs

*Business Products

- used for the operation of an organization or for the production of other products - ex: component parts, raw materials, accessory equipment

Organizations that bridge the gap between a product's manufacturer and the end user are called intermediaries or middle men. Two types of intermediary organizations are ______.

- wholesalers - retailers

Retailers

intermediaries who buy products from manufacturers (or other intermediaries) and sell them to consumers for home and household use rather than for resale or for use in producing other products

What stage of the product life cycle is a product likely in if consumer awareness is limited and profits are negative?

introduction

Physical Distribution

the part of logistics that focuses on transportation modes, warehousing, and materials handling

Marketing Mix

the part of marketing strategy that involves decisions regarding controllable variables: product, price, distribution, and promotion

Materials Handling

the physical handling and movement of products in warehousing and transportation

Logistics

the planning and coordination of inbound and outbound as well as third party services

Labeling

the presentation of important information on a package

Supply-Chain Management

the process of connecting and integrating all members of the distribution system in order to satisfy customers

*Branding

the process of naming and identifying products

Branding

the process of naming and identifying products

Transportation

the shipment of products to buyers

Direct Marketing

the use of nonpersonal media to communicate products, information, and the opportunity to purchase via media such as mail, telephone, or the Internet

Promotional Positioning

the use of promotion to create and maintain an image of a product in buyers' minds

Pull Strategy

the use of promotion to create consumer demand for a product so that consumers exert pressure on marketing channel members to make it available

Price

the value placed on an object exchanged between buyer and seller

Processed Materials

things used directly in production but not identifiable as component parts such as varnish used in furniture production

Integrated Marketing Communications

coordinating the promotion mix elements and synchronizing promotion as a unified effort

Wholesalers

intermediaries who buy from producers or from other wholesalers and sell to retailers

PRICE goes UP

QUANTITY demanded goes DOWN

PRICE goes DOWN

QUANTITY demanded goes UP

Trademark

a brand that is registered with the U.S. Patent and Trademark Office and is thus legally protected from use by any other firm

What do marketers hope to gain by developing at least one dimension of value in the marketing mix that surpasses all competitors in meeting customer expectations?

a competitive advantage

Intensive Distribution

a form of market coverage whereby a product is made available in as many outlets as possible

Selective Distribution

a form of market coverage whereby only a small number of all available outlets are used to expose products

Product Line

a group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations

Marketing Channel

a group of organizations that moves products from their producer to customers; also called a channel of distribution

Penetration Price

a low price designed to help a product enter the market and gain market share rapidly

Advertising

a paid form of nonpersonal communication transmitted through a mass medium, such as television commercials or magazine advertisements

Test Marketing

a trial minilaunch of a product in limited areas that represent the potential market

Reference Pricing

a type of psychological pricing in which a lower-priced item is compared to a more expensive brand in hopes that the consumer will use the higher price as a comparison price

Product Mix

all the products offered by an organization

The supply chain includes ______.

all who are involved in moving products from the producer to the ultimate consumer

Push Strategy

an attempt to motivate intermediaries to push the product down to their customers

Manufacturer Brands

brands initiated and owned by the manufacturer to identify products from the point of production to the point of purchase

Private Distributor Brands

brands, which may cost less than manufacturer brands, that are owned and controlled by a wholesaler or retailer

Which products have more of a tendency to be sold through direct marketing channels because they are expensive or technically complex?

business products

The engineers at Wonderful Widgets have come up with an idea for a new product. The company has determined that the product fills a market need and that it should generate a profit. Now the company wants to see how the product will be perceived by the consumer. How will the company do this?

by creating a prototype

Price Skimming

charging the highest possible price that buyers who want the product will pay

Idea Development

coming up with new commercial products to pursue

Profits begin to decline during the growth stage because ______.

competitors enter the market and drive prices downward

Specialty Product

consumers will go out of their way to find these products and are unwilling to accept a substitute

Shopping Product

consumers will shop around for these products and buying decisions are influenced by quality, style, service, and image

Convenience Product

consumers will spend little to no time planning where to purchase these products and usually accept whatever brand is available

Product Development

creating a prototype

During the ____ stage of the product life cycle, sales fall rapidly, profits continue to decline, and may even become losses as prices are cut.

decline

Advertising Campaign

designing a series of advertisements and placing them in various media to reach a particular target market

Sales Promotion

direct inducements offering added value or some other incentive for buyers to enter into an exchange

While Duluth Trading operates some retail locations, it specializes in selling its products through catalogs. In doing so, Duluth Trading is engaged in _____.

direct marketing

Personal Selling

direct, two-way communication with buyers and potential buyers

*Psychological Pricing

encourage purchases based on emotion

Psychological Pricing

encouraging purchases based on emotional rather than rational responses to the price

True or false: Products always follow the product life cycle in order, proceeding through all stages.

false

Component Parts

finished items ready to be assembled into final products

_____ distribution makes a product available in as many outlets as possible.

intensive

A distinguishing feature of a trademark is that ______.

it is legally protected

Relative to the product life cycle, because ketchup is a classic product ______.

it may never experience decline

Accessory Equipment

items used for production, office, or management purposes such as fax machines and computers

Major Equipment

large, expensive items used in production such as robotic auto assembly equipment

The group of organizations that move products from the producer to consumers is a ______.

marketing channel

If sales of a product peak and begin to decline along with declining profits due to severe competition and heavy expenditures, the product is in the _____ stage of the product life cycle.

maturity

Publicity

nonpersonal communication transmitted through the mass media but not paid for directly by the firm

Supplies

paper, pencils, paint and other such items that make production and management operations possible

The ______ variable of the marketing mix is often the most visible and therefore of critical importance.

product

Consumer Products

products intended for household or family use

Skimming Price

products priced high to maximize profit when there is little competition

*Penetration Price

products priced low to attract many customers

Business Products

products that are used directly or indirectly in the operation or manufacturing processes of businesses

Raw Materials

products that occur naturally such as iron ore and lumber

Generic Products

products with no brand name that often come in simple packages and carry only their generic name

*Commercialization

promoting a product to distributors, retailers, and consumers to gain wide interest and distribution in the product

Idea Screening

reducing the number of ideas to the most promising and working on those

What typically happens in the growth stage of the product life cycle?

sales increase rapidly and profits peak

What typically happens in the growth stage of the product life cycle? Multiple choice question.

sales increase rapidly and profits peak

Industrial Services

services such as legal, janitorial, and financial, which must be provided internally or acquired from an outside supplier

A new computer would be classified as a ______ product, and a luxury yacht would be classified as a ______ product.

shopping; specialty

Discount Pricing

temporary price reductions to boost sales

Discounts

temporary price reductions, often employed to boost sales

Exclusive Distribution

the awarding by a manufacturer to an intermediary of the sole right to sell a product in a defined geographic territory

Quality

the degree to which a good, service, or idea meets the demands and requirements of customers

Warehousing

the design and operation of facilities to receive, store, and ship products

Packaging

the external container that holds and describes the product

*Packaging

the external container that holds and describes the product and influences consumers' attitudes and buying decisions

Commercialization

the full introduction of a complete marketing strategy and the launch of the product for commercial success

Direct Selling

the marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace