Chapters 11, 12, 13, & 14
The Gaps Model
"One of the most effective methods to assess how well a firm is delivering adequate service to consumers is to employ the *gaps* Model to evaluate their service provision."
Associated Services
(i.e. augmented product) The non-physical attributes of the product including product warranties, financing, product support, and after-sale services
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**CHAPTER 11 - CHAPTER 11 - CHAPTER 11**
**CHAPTER 11 - CHAPTER 11 - CHAPTER 11**
Using the Diffusion of Innovation Theory
1) *Relative Advantage*: if a product or service is perceived to be better than substitutes 2) *Compatibility*: a diffusion process may be faster or slower, depending on various consumer features, including international cultural differences 3) *Observability*: when products are easily observed, their benefits or uses are easily communicated to others 4) *Complexity and Trialability*: products that are relatively less complex are also easy to try "Relative Advantage <----> most would perceive that Starbucks is a superior form of coffee Compatibility <----> Most Americans drink coffee each morning Observability <----> Starbucks has their distinct logo on each of their coffee cups Complexity and trialability <----> Starbucks coffee is a simple product and is quite easy to try."
Sales Orientation
A company objective based on the belief that increasing sales will help the firm more than will increasing profits "Sometimes firms selling a pioneer product will set a very low price in order to obtain lots of customers before competitors enter the market. This is an example of a *sales* orientation." "A firm may set low prices to *encourage current firms to leave the market, take market share away from competitors*, and/ or *discourage firms from entering the market*."
Customer Orientation
A company objective based on the premise that the firm should measure itself primarily according to whether it meets its customers' needs "The customer orientation strategy increases value by *setting prices to match consumer expectations* and *focusing on customer satisfaction*." "Firms might sell their products or services at high prices in order to *communicate exclusively, enhance the company's reputation and image, and enhance the value of the products in the consumers' minds*."
Competitor Orientation
A company objective based on the premise that the firm should measure itself primarily against its competition Firms engaged in competitor orientation might use *competitive parity* and/ or *status quo pricing*."
Profit Orientation
A company objective that can be implemented by focusing on target profit pricing, maximizing profits, or target return pricing
Premium Pricing
A competitor-based pricing method by which the firm deliberately prices a product above the prices set for competing products to capture those consumers who always shop for the best or for whom price does not matter
Status Quo Pricing
A competitor-oriented strategy in which a firm changes prices only to meet those of competition
Brand Licensing
A contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiated fee. "Can be an effective way to attract visibility for a brand, and is a way to generate additional revenue."
Bait-and-switch
A deceptive practice of luring customers into the store with a very low advertised price on an item (the bait), only to aggressively pressure them into purchasing a higher-priced model (the switch) by disparaging the low-riced item, comparing it unfavorably with the higher-priced model, or professing an inadequate supply of the lower-priced item
Family Brand
A firm's own corporate name used to brand its product lines and products
Predatory Pricing
A firm's practice of setting a very low price for one or more of its products with the intent to drive its competition out of business; illegal under bot the Sherman Antitrust Act and the Federal Trade Commission Act
Competitive Parity
A firm's strategy of setting prices that are similar to those of major competitors
Early Majority
A group of consumers in the diffusion of innovation model that represents approximately 34 percent of the population; members don't like to take much risk and therefore tend to wait until bugs are worked out of a particular product or services; few new products and services can be profitable until this large group buys them "The *early majority* represents the earlier half of the two largest categories of consumers on the diffusion of innovation curve."
Market Penetration Strategy
A growth strategy that employs the existing marketing mix and focuses that firm's efforts on existing customers
Target Return Pricing
A pricing strategy implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments; designed to produce a specific return on investment, usually expressed as a percentage of sales
Target Profit Pricing
A pricing strategy implemented by firms when they have a particular profit goal as their overriding concern; uses price to stimulate a certain level of sales at a certain profit per unit
High/low Pricing
A pricing strategy that relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases
Maximizing Profits
A profit strategy that relies primarily on economic theory. If a firm can accurately specify a mathematical model that captures all the factors are required to explain and predict sales and profits, it should be able to identify the price at which its profits are maximized
Everyday Low Pricing (EDLP)
A strategy companies use to emphasize the continuity of their retail prices at a level somewhere between the regular, nonsale price and the deep-discount sale prices their competitors may offer
Brand Repositioning (Rebranding)
A strategy in which marketers change a brand's focus to target new markets or realign the brand's core emphasis with changing market preferences
Price Skimming
A strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay in order to obtain it; after the high-price market segment becomes saturated and sales begin to slow down, the firm generally lowers the price to capture (or skim) the next most price sensitive segment
Trade Promotions
Advertising to wholesalers or retailers to get them to purchase new products, often through special pricing incentives
Retailer/ Store Brands
Also called private- label brands, are products developed by retailers
Alpha Testing
An attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm's research and development (R&D) department "The *research and development* department can be considered an investment into a company's future, in which scientists work to solve complex problems and develop new ideas."
Voice-of-Customer (VOC) Program
An ongoing marketing research system that collects customer inputs and integrates them into managerial decisions "A systematic program that collects customer inputs and integrates them into managerial decisions is a *voice-of-customer* program."
Customer Complaint Behavior
Analyzes the unfulfilled needs of customers in regards to their perceptions of the performed service used to modify future performance
Service
Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer. "Services often are perceived as riskier purchases because the customer *has less chance to sample the service before purchase and cannot return it after purchase*."
Product
Anything that is of value to a consumer and can be offered through a voluntary marketing exchange "Which of the following best depicts elements of a 'product?' ASSOCIATED SERVICES & ACTUAL PRODUCT."
Heterogeneity
As it refers to the differences between the marketing of products and services, the delivery of services is more variable "On Fridays and Saturdays, the staff is different and the normal process is shortened from 55 to 45 minutes per customer." "The primary reason there is greater heterogeneity in services than in products is because *human inputs generate differences*."
Private-label Brands
Brands developed and marketed by a retailer and available only from that retailer; also called 'store brands'
Manufacturer Brands (National Brands)
Brands owned and managed by the manufacturer "Brands are most commonly owned by MANUFACTURERS."
Concepts
Brief written descriptions of a product or service; its technology, working principles, and forms; and what customer needs it would satisfy
The Five Cs of Pricing
Competition Costs (cost considerations) Company Objectives Customers Channel Members
Emotional Support
Concern for others' well-being and support of their decisions in a job setting
Premarket Test
Conducted before a product or service is brought to market to determine how many customers will try and then continue to use it
Product packaging offers a variety of benefits to which of the following?
Consumers
Laggards
Consumers who like to avoid change and rely on traditional products until they are no longer available "During the decline stage of the product life cycle, *laggards* that have not yet tried the product or service will be entering the market for the first time."
Service Quality
Customers' perceptions of how well a service meets or exceeds their expectations "To assess service quality, it is necessary to understand both customers' perceptions and their expectations."
Core Customer Value
Defines the basic problem-solving benefits that consumers are seeking
Product Life Cycle
Defines the stages that new products move through as they enter, get established in, and ultimately leave the marketplace and thereby offers marketers a starting point for their strategy planning "When a new product passes through four stages - introduction, growth, maturity, and decline - this is referred to as the *product life cycle*." "Put the stages in the PLC in order from first to last. *Introduction --> Growth --> Maturity --> Decline*"
Standards Gap (a type of service gap)
Difference between the firm's perceptions of customers wants and the service standards it sets "McDonald's has a policy that a drive-thru customer will receive his order within 1 minute of paying for the order. This contributes to efforts to reduce the *standards* gap and provide measurable service quality based on expectations." "Joanna learned from customer satisfaction surveys that diners in her restaurant wanted to be able to make substitutions. She has decided to allow substitutions, but has not told all of the servers of this. This is an example of a *standards* gap."
Variable (characteristic of a service)
Due to the human element it tends to deviate from use to use
Gray Market
Employs irregular but not necessarily illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer
Product Development (also called product design)
Entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features a service's features.
Contribution Per Unit
Equals the price less the variable cost per unit. Variable used to determine the break-even point in units
Slotting Allowance
Fees firms pay to retailers simply to get new products into stores or to gain more or better shelf space for their products "Retailers may not only need to make a profit on each sales, but they may also receive a *slotting allowance* as an encouragement to give better shelf space to new products."
Product Lines
Groups of associated items, such as those that consumers use together or think of as part of a group of similar products
Beta Testing
Having potential consumers examine a product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use
The Product Development Process
IDEA GENERATION (development of viable new product ideas) --> CONCEPT TESTING (testing the new product idea among a set of potential customers) ---> PRODUCT DEVELOPMENT (development of prototypes and/ or this product) ----> MARKET TESTING (testing the actual product in a few test markets) -----> PRODUCT LAUNCH (full scale commercialization of the product) ------> EVALUATION OF RESULTS (analysis of the performance of the new product and making appropriate modifications) "Identify potential impacts to the company when a new product launch is a failure: *company may fail, negative financial impacts, product may not recover from failure*"
Competitive brands add value for the consumer by...
Identifying unique features and attributes that are easy to distinguish Signifying a distinct level of quality
Support and Incentives for Employees
In addition to providing service employees with emotional and instrumental support, management should offer the staff *rewards* and *incentives* that reward them for providing good service
Empowerment
In context of service delivery, means allowing employees to make decisions about how service is provided to customers
Point-of-Purchase Surveys
Inexpensively collects customer's service perceptions in the process of exchange
Lead Users
Innovative product users who modify existing products according to their own ideas to suit their specific needs
What are fundamental differences between services and good?
Inseparable and intangible
Test Marketing
Introduces a new product or services to a limited geographical area (usually a few cities) prior to a national launch "During test marketing, the potential elements of the marketing mix that may be used; *advertising and coupons*"
Revers Engineering
Involves taking apart a competitor's product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exist
Perishable (characteristic of a service)
It cannot be stored for use in the future "There is a waiting line on Friday and Saturday afternoons but those time slots cannot be inventoried for when there is no demand."
Intangible (characteristic of a service)
It cannot be touched, tasted, or seen like a pure product can "It is difficult for the salon to convey the benefits of a new type of hand cleaning technique." "One of the biggest differences between marketing a service and a product is the *intangibility* of service."
Inseparable (characteristic of a service)
It is produced and consumed at the same time; that is, service and consumption are inseparable "One difference between products and service is demonstrated by a hair salon, where the stylist delivers the service at the same time the customer receives it. This is called *inseparability*." "When a dentist fills a cavity in a patient's tooth, there is the element of *inseparability* that indicates the dentist should try to engage the patient in the process as much as possible since she must be present for the service." "Buying a service such as a haircut, a medical treatment, or a lawyer's advice is perceived as more risky to the consumer, because of the service characteristic of *inseparability*, since the service cannot really be sampled in advance nor can it be returned." "Customers tend to get upset when their favorite manicurist is not working."
Some brands become so predominant in a particular product market that they become synonymous with the product itself over time. Which of the following brands is an example of this situation?
Kleenex
Loss Leader Pricing
Loss leader pricing takes the practice of leader pricing one step further by lowering the price below the store's cost "Some states prohibit *loss leader* pricing, where items are sold at a price below the stores' cost, by requiring some minimum markup."
Match the relative level of sales with the stage of the product life cycle at which this level of sales is typically observed
Low <----> Introduction Rising <----> Growth Peak <----> Maturity Dropping <----> Decline
Trade Show
Major events attended by buyers who choose to be exposed to products and services offered by potential suppliers in an industry
Channel Members
Manufacturers, wholesalers, and retailers
Firms feel compelled to add new products to their offerings in order to satisfy the changing needs of current and new...
Markets
Price Elasticity of Demand
Measures how changes in a price affect the quantity of the product demanded; specifically, the ration of the percentage change in quantity demanded to the percentage change in price "The equation for elasticity of demand is the percentage change in quantity demanded, divided by percentage change in *price*."
Brand Awareness
Measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm's communications to consumers "Examples of communication media that firms use to create brand awareness include: publicity and advertising
Pioneers (also called "breakthroughs")
New product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market "Which of the following products would be considered a pioneer product at the time it was introduced? *Amana's microwave oven in 1971, and Pampers disposable diapers in the early 1960s*."
Breadth
Number of product lines offered by a firm; also known as variety "Consumer packaged goods companies sell products across many different product lines. These companies have significant breadth in their product lines."
As knowledge of the iPod spread, the white earbuds could be seen even if the iPod itself was out of sight. This is an examples of which of the factors that affect speed of diffusion?
Observability
Brand Dilution
Occurs when a brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold
Brand Loyalty
Occurs when a consumer buys the same brand's product or service repeatedly over time rather than buying from multiple suppliers within the same category "Brand-loyal consumers provide an important source of VALUE for firms."
Horizontal Price Fixing
Occurs when competitors that produce and sell competing products collude, or work together, to control prices, effectively taking price out of the decision process for consumers
Pure Competition
Occurs when different companies sell commodity products that consumers perceive as substitutable; price usually is set according to the laws of supply and demand
Oligopolistic Competition
Occurs when only a few firms dominate a market
Vertical Price Fixing
Occurs when parties at different levels of the same marketing channel collude to control the prices passed on to consumers
Monopolistic Competition
Occurs when there are many firms that sell closely related but not homogeneous products; these products may be viewed as substitutes but are not perfect substitutes "When there are many firms competing for customers in a given market, but the products are differentiated."
Price War
Occurs when two or more firms compete primarily by lowering their prices
Monopoly
One firm provides the product or service in a particular industry
Distributive Fairness
Pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss) that resulted from a service failure "When a hotel has a service delivery problem such as a broken AC system on a very hot weekend, one critical element of service recovery is to *find a solution that seems fair to all customers*." "*Distributive* fairness refers to the manner in which customers want to be compensated a fair amount to correct a perceived loss that resulted from a service failure."
First Movers
Product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead. "Identify one of the disadvantages from being a first mover. *Having to establish the market all alone*."
Consumer Products
Products and services used by people for their personal use
Substitute Products
Products for which changes in demand are negatively related; that is, a percentage increase in the quantity demanded for product A results in a percentage decrease in the quantity demanded for product B
Unsought Products/ Services
Products or services consumers either do not normally think of buying or do not know about
Specialty Products/ Services
Products or services toward which the customer shows a strong preference and for which he or she will expend considerable effort to search for the best suppliers
Complementary Products
Products whose demand curves are positively related, such that they rise or fall together; a percentage increase in demand for one results in a percentage increase in demand for the other
Instrumental Support
Providing the equipment or systems needed to perform a task in a job setting
Inelastic
Refers to a market for a product or service that is price insensitive; that is, relatively small changes in price will not generate large changes in the quantity demanted
Elastic
Refers to a market for a product or service that is price sensitive; that is, relatively small changes in price will generate fairly large changes in the quantity demanded
Substitution Effect
Refers to consumers' ability to substitute other products for the focal brand, thus increasing the price elasticity of demand for the focal brand
Income Effect
Refers to the change in the quantity or a product demanded by consumers due to a change in their income
Procedural Fairness
Refers to the customer's perception of the fairness of the process used to resolve complaints about service
Experience Curve Effect
Refers to the drop in unit cost as the accumulated volume sold increases; as sales continue to grow, the costs continue to drop, allowing even further reductions in the price
Service Gap
Results when a service fails to meet the expectations that customers have about how it should be delivered
Firms must continually introduce new products with improved features and find new uses for existing products in order to defend its current market _____ during intense competition
Share
Introductory Price Promotion
Short-term price discounts designed to encourage trial
Demand Curve
Shows how many units of a product or service consumers will demand during a specific period at different prices "Demand curves can be described as *straight* and *curved*." "For most products, demand increases as the price decreases. Because of this general trend, demand curves usually have a *downward* slope."
Customer Service
Specifically refers to human or mechanical activities firms undertake to help satisfy their customer's needs and wants
Maturity Stage
Stage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them "Not every product makes it through the life cycle to the last two stages of the PLC to reach stage three, *maturity* or stage four, decline." "Key characteristics of the maturity stage are: *marketing costs increase* and *intense competitions on price*."
Introduction Stage
Stage of the product life cycle when innovators start buying the product "The life cycle stage where a product begins the product life cycle is known as the *introduction* stage."
Decline
Stage of the product life cycle when sales decline and the product eventually exits the market
Growth Stage
Stage of the product life cycle when the product gains acceptance, demand and sales increase, and competitors emerge in the product category "When products reach the growth stage of the PLC, you the marketer must study the customers and know their preferences such as: *styles and features*. "The key characteristics of the growth stage of the PLC are: *typical consumers are early adopters and early majority* and *sales rise*."
Promotion for new products is required at each link in the _____.
Supply chain
Break-even Analysis
Technique used to examine the relationships among cost, price, revenue, and profit over different levels of production and sales to determine the break-even point "To find a production quantity where, for a given price, costs are equal to revenues." "A break-even analysis graph contains *total revenue, total costs, and fixed costs*."
Reliability (service dimension)
The ability to perform the service dependably and accurately
Tangibles (service dimension)
The appearance of physical facilities, equipment, personnel, and communication materials
Zone of Tolerance
The area between customers' expectations regarding their desired service and the minimum level of acceptable service -- that is, the difference between what the customer really wants and what he or she will accept before going elsewhere "The zone of tolerance refers to *the area between customers' desired expectations and the minimum level of acceptable service*."
Empathy (service dimension)
The caring, individualized attention provided to customers
Product Mix
The complete set of all products offered by a firm
Label
The component of the product that provides the information consumers need to make their purchase decisions and for proper consumption of the product. "Labels must comply with laws and regulations and must include: INGREDIENTS, WHERE THE PRODUCT WAS MADE, SAFETY REQUIREMENTS." "Because they include information such as ingredients, nutrition, and the product benefits to a consumer, labels can be considered COMMUNICATION tools." "The label is used for PROMOTION and BRANDING."
Communication Gap (a type of service gap)
The difference between actual service provided to customers and the service that the firm's promotion program promises "One way for a firm to reduce the *communication* gap is to ensure that the sales force does not make promises the firm cannot keep."
Knowledge Gap (a type of service gap)
The difference between customer expectations and what the firm perceives the customer to expect "In delivery of a service, one of the most significant elements is to be able to predict *consumer expectations*." "One of the best ways for managers to reduce the *knowledge* gap is to conduct ongoing research and regularly talk with customers to determine what they expect to get from the brand and the firm."
Delivery Gap (a type of service gap)
The difference between the firm's service standards and the actual service it provides to customers
Prototype
The first physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes, sometimes even crafted individually
Assurance (service dimension)
The knowledge of and courtesy by employees and their ability to convey trust and confidence
Late Majority
The last group of buyers to enter a new product market; when they do, the product has achieved its full market potential
A postlaunch review is conducted to determine if:
The launch was a success or failure; changes to the marketing mix are needed; additional resources are needed "In order to accurately evaluate the new product launch, marketers must undertake critical *post-launch* review to determine whether the product and its launch were a success or failure."
Resolving Problems Quickly
The longer it takes to resolve a service failure, the more irritated the customer will become and the more people he or she is likely to tell about the problem
Brand Associations
The mental links that consumers make between a brand and its key product attributes; can involve a logo, slogan, or famous personality
Depth
The number of categories within a product line "Firms decrease depth to REFOCUS MARKETING EFFORTS ON PROFITABLE ITEMS and ELIMINATE UNPROFITABLE ITEMS."
Price
The overall sacrifice a consumer is willing to make - money, time, energy - to acquire a specific product or service "Price is *the most challenging* of the four Ps to manage." "Examples of monetary sacrifices included in the overall price are *shipping* and *travel costs*." "Other elements in the marketing mix may or may not be perfect, but if the price is wrong, revenue *will not accrue*." "Price provides information about a product's quality."
Primary Package
The packaging the consumer uses, such as the toothpaste tube, from which he or she typically seeks convenience in terms of storage, use, and consumption "Used both to protect and to market the item, PACKAGING is an important element of the brand that has significant tangible or physical benefits that influence how buyers perceive it."
Cross-price Elasticity
The percentage change in demand for product A that occurs in response to a percentage change in price of product B
Actual Product
The physical attributes of a product including the brand name, features/ design, quality level, and packaging
Break-even Point
The point at which the number of units sold generates just enough revenue to equal the total costs; at this point, profits are zero "Profit alone *does not indicate* how many units should be sold before a firm breaks even."
Price Fixing
The practice of colluding with other firms to control prices
Co-Branding
The practice of marketing two or more brands together, on the same package or promotion "Risks in co-branding include CUSTOMERS FOR THE TWO BRANDS MIGHT BE TOO DIFFERENT and CO-BRANDING MAY FAIL IF THERE ARE CONFLICTS OF INTEREST BETWEEN THE CO-BRANDS."
Price Discrimination
The practice of selling the same product to different resellers (wholesalers, distributors, or retailers) or to the ultimate consumer at different prices; some, but not all, forms of price discrimination are illegal "If a firm sells the same product to different resellers at different prices, it can be considered *price discrimination*." "There are many forms of price discrimination, but only some of them are considered illegal under the *Robinson-Patman Act* and the *Clayton Act*."
Reference Price
The price against which buyers compare the actual selling price of the product and that facilitates their evaluation process
Manufacturer's Suggested Retail Price (MSRP)
The price that manufacturers suggest retailers use to sell their merchandise
Manufacturer's Suggested Retail Price (MSRP)
The price that manufactures suggest retailers use to sell their merchandise
Innovation
The process by which ideas are transformed into new products and services that will help firms grow. "Without innovation, what options would be available to firms? *Take current products to new markets* and *Continue to market current products to current customers*."
Diffusion of Innovation
The process by which the use of an innovation, whether a product or service, spreads throughout a market group over time and over various categories of adopters. "Rank the order of these consumers, starting with the first group, ending with the last group: *Innovators --> Early Adopters --> Early Majority --> Late Majority --> Laggards*" "While the *innovator* is first to adopt the item, often in its more extreme form, the *early adopter* is often the first non-celebrity a consumer knows who adopts next."
Concept Testing
The process in which a concept statement that describes a product or a service is presented to potential buyers or users to obtain their reactions "Through the effective us of *concept* testing, firms may be able to avoid the high costs of product development for product ideas that do not meet customer's expectations." "Concept testing can be as simple as a brief written description of the product that might also include: *visual images* and *customer needs it satisfies*."
Perceived Value
The relationship between a product's or service's benefits and its cost
Early Adopters
The second group of consumers in the diffusion of innovation model, after innovators, to use a product or service innovation; generally don't like to take as much risk as innovators but instead wait and purchase the product after careful review. "Early adopters are quick to purchase a new product or service. Identify all of the following characteristics that are typically associated with early adopters: *tend to be opinion leaders of particular product categories* and *are less risk seeking than innovators*."
Brand equity
The set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service "The value of a brand can be calculated and compared to other brands in the form of brand equity." "The value of a brand like Starbucks or Apple can be converted into brand EQUITY, which is essentially the assets and liabilities of the brand."
Total Cost
The sum of variable and fixed costs
Individual Brands
The use of individual brand names for each of a firm's products "Some firms use INDIVIDUAL BRANDS for each of their products, as opposed to the same name or brand for all their product lines and products."
Brand Extension
The use of the same brand name for new products being introduced to the same or new markets "Because a brand name is already well established, a firm can spend FEWER RESOURCES to develop consumer brand awareness when introducing a brand extension." "Which of these is an example of a brand extension? ACME CHIPS AND ACME DIPS."
Line Extension
The use of the same brand name within the same product line and represents an increase in a product line's depth
Responsiveness (service dimension)
The willingness to help customers and provide prompt service
Secondary Package
The wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners; can contain additional product information that may not be available on the primary package
Innovators
Those buyers who want to be the first to have the new product or service "Which of the following traits would innovators most likely have? *risk takers, highly knowledgeable,* and *trend starters*."
Fixed Costs
Those costs that remain essentially at the same level, regardless of any changes in the volume of production
Variable Costs
Those costs, primarily labor and materials, that vary with production "Variable costs *change with* production volume."
Shopping Products/ Services
Those for which consumers will spend time comparing alternatives, such as apparel, fragrances, and appliances
Convenience Products/ Services
Those for which the consumer is not willing to spend any effort to evaluate prior to purchase
Prestige Products or Services
Those that consumers purchase for status rather than functionality
New Product Pricing
When a new product is similar to what already appears on the market, *pricing* is somewhat easier because the product's approximate value has already been established.
When firms measure the success of a new product, their assessment includes two interrelated factors...
satisfaction of firm's financial requirements, and satisfaction of technical requirements such as performance
