marketing 3000 lesson 6

product liability

____ ____ refers to the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products.

it should suggest something about the product's benefits and qualities

first desirable quality for a brand name

The US Consumer Product Safety Act of 1972

___ ___ _____ ____ ____ ____ ___ _____ set up the Consumer Safety Commission to encourage safety in product design and better quality control.

C. market maturity

According to the text, competition is toughest in which of the following product life cycle stages? A. market introduction B. market growth C. market maturity D. market development E. none of the above

E. all of the above

According to the textbook, which of the following is an example of a "new product?" A. an existing product that has been improved B. an existing product for which new uses have been found in other product-markets C. a wholly new product idea D. an existing product being offered to new markets E. all of the above

B. most important.

Compared to decisions made with regard to the other marketing mix areas, product decisions are usually A. least important. B. most important. C. easiest to make. D. hardest to make. E. least expensive to make.

A. be encouraged from any and all sources, since only a few ideas will develop into successful products

Ideas about potential new products should do which of the following? A. be encouraged from any and all sources, since only a few ideas will develop into successful products B. not be eliminated from consideration until they have been tested in the commercialization stage C. come primarily from employees of the firm—so that time won't be wasted evaluating product ideas that are inconsistent with the firm's objectives and resources D. come from outside the firm, since studies show that really new ideas require a fresh perspective E. none of the above

A. It has high brand equity.

If consumers are willing to pay more for Coke Zero than for other soft drinks, what can we say about Coke Zero? A. It has high brand equity. B. Its cobranding strategy is successful. C. It is in the growth stage of the product life cycle. D. It is in the maturity stage of the product life cycle. E. It is a successful private brand.

C. a pleasing product

Many small cars get better gas mileage than the old "gas-guzzlers." This was achieved by using lighter (and less protective) materials. Using less gas while being less safe makes such a car which of the following? A. a desirable product B. a salutary product C. a pleasing product D. a deficient product E. there is not enough information

societal perspective

New product development is important from a ____ ____. THey not only reflect the world we live in, but new product innovations can change our lives and determine the type of world we will live in.

product

Of all the four Ps in the marketing mix, ______ decisions are usually the most critical in determining marketing success.

Six months

___ ______ is the limit for how long a company can call its product new according to the FTC. To be called new, a product must be entirely new or changed in a "functionally significant or substantial respect."

C. innovators

Promotional efforts to stimulate primary demand are targeted toward which of the following groups? A. pioneers B. early adopters C. innovators D. laggards E. the early majority

C. family

Sony uses its name on a variety of different types of products. What type of branding strategy is this called? A. private B. generic C. family D. individual E. cobranding

price competition

Successful new products generally are much more profitable than successful existing products because they generally avoid intense ____ ____.

product life cycle

The _____ _____ ____ describes the stages a really new product idea goes through from beginning to end. It is divided into four major stages: market introduction, market growth, market maturity, and sales decline.

E. all of the above

The shape, length, and current stage of a product life cycle may vary depending on which of the following? A. how the market is defined B. the nature of the competition C. the nature of the products involved D. how the needs of customers in the product-market are defined E. all of the above

E. They are of inconsistent quality.

Why are some commodities (e.g., vegetables) not branded? A. They aren't expensive enough to warrant it. B. They don't have a high enough quality. C. They are too difficult to promote. D. It is illegal to brand them. E. They are of inconsistent quality.

A. provides a means for associating a specific product with a specific level of quality

What does branding accomplish, from a consumer's point of view? A. provides a means for associating a specific product with a specific level of quality B. increases price competition C. substantially reduces a seller's promotional costs D. makes it easier for a consumer to compare prices for different brands E. makes it difficult for the seller to introduce new products to a company's line

C. because product line extensions are necessary for brands to stay competitive

What is one reason for the growing number of product line extensions in categories such as soft drinks and toothpaste? A. because product line extensions are always profitable B. because there is a growing need to go downmarket C. because product line extensions are necessary for brands to stay competitive D. because product line extensions help lower brand equity E. because product line extensions help raise brand equity

D. Money is invested in developing Product, Place, and Promotion—in the hope of future profits.

What is true during the market introduction stage of the product life cycle? A. Large profits are typical—until competition arrives. B. Price and Promotion are more important than Place and Product. C. Much money is spent on Promotion, while spending on Place should be left until later. D. Money is invested in developing Product, Place, and Promotion—in the hope of future profits. E. Many customers begin seeking out the new product to try it.

A. to avoid creating negative perceptions toward the core brand

When executing a product line extension downmarket, why do firms typically use an individual branding strategy? A. to avoid creating negative perceptions toward the core brand B. to take advantages of the reputation of the core brand C. to make sure everyone knows the firm that is producing the new product D. to help the brand's consistency of quality E. to avoid legal problems

C. It is easy to pronounce, recognize, and remember.

Which of the following is a characteristic of a good brand name? A. It specifically describes the product it names. B. It cannot be translated into a foreign language. C. It is easy to pronounce, recognize, and remember. D. It sounds like the names of similar products to encourage consumer purchase. E. It is generic in use.

A. The product fails to offer the customer a unique benefit.

Which of the following is a common cause of new-product failures? A. The product fails to offer the customer a unique benefit. B. The company tries to follow an organized new-product development process—rather than using a faster and more spontaneous, "race-to-market" approach. C. The managers worry too much about the competition. D. The company delays putting the product on the market until it has developed a complete marketing plan. E. all of the above

E. all of the above

Which of the following is an effective source of ideas at the idea generation stage of the new-product development process? A. customer complaints B. lead-users of the product C. competitors' products D. products found in overseas markets E. all of the above

E. All of the above are true.

Which of the following is true as a product moves through its life cycle? A. Industry profits may decrease while industry sales increase. B. The nature of competition moves toward pure competition or oligopoly. C. Entirely different target markets may be aimed at. D. Customers' attitudes and needs may change. E. All of the above are true.

D. desirable products

Which of the following should marketers try to design and sell from a "social responsibility" viewpoint? A. deficient products B. salutary products C. pleasing products D. desirable products E. none of the above

D. asphalt

Which of these items is an example of a product that is typically unbranded? A. pencils B. telephone equipment C. automobile oil filters D. asphalt E. light bulbs

trading down

____ ____(Downmarket) means adding a lower price product to a company's product line. The firm expects that people who cannot afford the original higher priced product or consider it too expensive will buy the new lower priced one.

product management

_____ ____ involves making decisions regarding the product line.

trading up

_____ _____ (Upmarket) means adding a higher-price product to a line in order to attract a broader market. The seller intends that the new product's prestige will help the sale of its existing lower-price products.

product managers brand managers

_____ _____ or ___ ____ manage specific products--often taking over the jobs formerly handled by an advertising manager.

manufacturer's brands

_____ _______ are the types of brands we commonly think of when we think of branding. they are owned by the producers of the particular product.

empowerment

______ means giving employees the authority to correct a problem without first checking with management.

private brand

a ___ ____ or store brand is owned by a wholesaler or retailer. Growing, accounting for more than 20% of sales. The main advantage is higher profits. another is the positive benefit to the store's overall image.

product line

a ___ _____ is a group of closely related products.

distinctive

a _____ benefit means that the new product fills an unfulfilled need.

Comparative advantage

a firm has a marketing mix that the target market sees as better than a competitors mix; the greater the _____ _____ of a new product over those already on the market, the more rapidly its sales will grow

Pareto chart

a graph that shows the number of times a problem cause occurs, with problem causes ordered from the most frequent to the least frequent.

generic brand

a low priced product identified only by its ____ ______. area of greatest success is pharmaceuticals. 50% of drugs. low cost

brand

a name or symbol that identifies a particular product and differentiates it from competing products.

desirable product

a product with high long-run consumer welfare and high immediate satisfaction

salutary product

a product with high long-run consumer welfare and low immediate satisfaction

pleasing product

a product with low long-run consumer welfare and high immediate satisfaction

deficient product

a product with low long-run consumer welfare and low immediate satisfaction

fishbone diagram

a visual aid that helps organize cause and effect relationships for "things gone wrong."

cobranding

entails placing two or more brand names on the product or package.

federal trade commission (FTC)

federal agency that polices antimonopoly laws; to be called new, says the FTC, a product must be entirely new or changed in a "functionally significant or substantial respect"

laggards

fifth adopter category; they are consumers who are bound by tradition and are last to adopt an innovation. they are cynical, suspicious, nostalgic, and often very frugal. they are associated with the decline stage of the product life cycle.

the name should translate easily into foreign languages

fifth desirable quality for a brand name

commercialization

fifth step of an organized new-product development process; finalize product and marketing plan, start production and marketing, "roll out" in select markets, final ROI estimate

decline

final stage in the product life cycle; in this stage, competition outside the product class may grow due to better technology or changing tastes. This will usually force a decline in the product category's sales and profits.

continuous improvement

firms that adopt TQM are always looking for ways to improve implementation with ___ ____--a commitment to constantly make things better one step at a time.

innovators

first adopter category; venturesome consumers who are the first to adopt an innovation. They are likely to be younger, have higher social status, and be in better financial shape. they also have broad social relationships involving various groups of people. they are most associated with the introduction stage of the product life cycle.

market introduction

first stage in the product life cycle; this is the "birth" stage of the PLC. A product innovation is introduced, marking the beginning of a new product category. The first product is called the "pioneer"; its promotional efforts are to stimulate primary demand or the demand for the product type itself.

idea generation

first step of an organized new-product development process; ideas from customers and users, marketing research, competitors, other markets, company people, middlemen, etc.

concept testing

for help in idea evaluation, firms use ___ ____--getting reactions from customers about how well a new product idea fits their needs.

late majority

fourth adopter category; they usually adopt an innovation to save money or in response to social pressure from their peers. they rely on members of the early and late majorities as sources of information and are associated with the late maturity stage of the product life cycle.

it should be extendable

fourth desirable quality for a brand name

development

fourth step of an organized new-product development process; of product and marketing mix, R&D, develop model or service prototype, test marketing mix, revise plans as needed, ROI estimate

new-product planning

is not an optional matter, it has to be done just to survive in today's dynamic markets; because lighters use to only be for lighting cigarettes but now they are making Luminaire lighters for candles at a hard to reach place

product positioning maps

maps that show how competing brands are positioned in the minds of consumers along relevant dimensions (according to the main criteria used to evaluate brands). the gaps or empty spaces may indicate an unfulfilled need and hence an opportunity for developing a successful new product.

informative promotion

market introduction stage; needed to tell potential customers about the advantages and uses of the new-product concept

persuasive promotion

market maturity stage; is more important in this stage and most competitors have discovered effect appeals or just copied their leaders. price sensitivity is a real factor

new-product

one that is new in any way for the company concerned; a fresh idea can be turned into a new product and start a new product life cycle; mouse then changed to wireless mouse

benchmarking

picking a basis for comparison for evaluating how well a job is being done

individual branding

producer companies use different brand names for different products.

family branding strategy

producer companies use one name on all of its products.

planned obsolescence

releasing new products that the company plans to soon replace with improved new versions; people have been criticized for this

early adopters

second adopter category; these consumers purchase a new product after innovators but sooner than other consumers. they tend to be socially involved within a community, but not as involved outside the community (unlike innovators). they are highly respected in their social system and are often opinion leaders. they are most often associated with the late introduction stage and early growth stage in the product life cycle.

it should be easy to pronounce, recognize, and remember. short names help.

second desirable quality for a brand name

market growth

second stage in the product life cycle; once sales and profits start to take off, the category has entered the growth stage of the life cycle. competitors begin to enter at this stage and promotional efforts to stimulate secondary demand begin.

screening

second step of an organized new-product development process; strengths and weaknesses, fit with objectives, market trends, rough ROI estimates

it should be capable of registration and legal protection

sixth desirable quality for a brand name

market introduction

stage where sales are low as a new idea is first introduced to a market. customers aren't looking for the product. even if the product offers superior value, customers don't know about it. Informative promotion is needed to tell potential customers about the advantages and uses of the new-product concept. takes time. most companies experience losses during this stage because they spend so much money for the product, place, and promotion development. companies invest money in hopes of future profits

fashion

the currently accepted or popular style. the sales of some products are influenced by this, and tend to have short life cycles.

brand equity

the differential effect that knowing the brand name has on customer response to the product or service. a measure of this is the extent to which customers are willing to pay more for the brand.

total quality management

the philosophy that everyone in the organization is concerned about quality, throughout all of the firm's activities, to better serve customer needs.

brand valuation

the process of estimating the total financial value of a brand.

market maturity

the stage occurs when industry sales level off and competition gets tougher. many aggressive competitors have entered the race for profits--except in oligopoly situations. industry profits go down throughout the market maturity stage because promotion costs rise and some competitors cut prices to attract business. less efficient firms can't compete with this pressure--and they drop out of the market. there is a long run downward pressure on prices. new firms may still enter the market at this stage--increasing competition even more. persuasive promotion becomes even more important. could continue for years, until a basically new product idea comes along.

market growth

the stage where industry sales grow fast--but industry profits rise and then start falling. the innovator begins to make big profits as more and more customers buy. but competitors see the opportunity and enter the market. some just copy the most successful product or try to improve it to compete better. others refine their offerings to do a better job of appealing to some target markets. the new entries result in much product variety. so monopolistic competition--with down sloping demand curves--is typical of this stage. time of biggest profits. time of rapid sales and earnings growth for companies with effective strategies. it is towards the end of this stage when industry profits begin to decline as competition and consumer price sensitivity increase.

early majority

third adopter category; they include more deliberate consumers who usually adopt an innovation just before the average adopter in a social system. they are often associated with the late growth stage and early maturity stage of the product life cycle.

the brand name should be distinctive

third desirable quality for a brand name

market maturity

third stage in the product life cycle; in this stage, sales and profit growth within a product category slow down. competition is at its highest within the product category, and competition from outside the category usually starts. This is also the stage when most people adopt the product.

idea evaluation

third step of an organized new-product development process; concept testing, reactions from customers, rough estimates of costs, sales, and profits

sales decline

this stage is a time of replacement; new products replace the old. product competition from dying products become more vigorous--but firms with strong brands may make products until the end because they have successfully differentiated their products.

distinctive benefit substantive segment

to succeed, a new product needs to provide a ___ ____ to a _____ ____