Marketing 321 TAMU Lampo Exam 2

Brand Extension

Organization uses one of its existing brands to brand a new product in a different product category i.e. Tesla car company, introduced a line of battery products for residential and commercial use under the Tesla brand

Late Majority

Skeptics who adopt new product when they feel it is necessary --> eventually adopt them because of economic necessity or social pressure

Search Quality

Tangible attributes that can be judged before the purchase of a product --> tangible attributes like color, style, size, feel, or fit that can be evaluated prior to purchase i.e. trying on a new coat or test driving a car

product differentiation

creating and designing products so that customers perceive them as different from competing products --> including quality, features, styling, price or image 3 Aspect (1) product quality (2) product design & features (3) product support services

Trademark

Legal designation of exclusive use of a brand; must register with the U.S. Patent and Trademark Office

7 phases of New Product Development Process

(1) Idea Generation (2) Screening (3) Concept Testing (4) Business analysis (5) Product development (6) Market Testing (7) Commercialization

Management of service expectations

--> Advertising --> Good internal communications

Analysis of customer expectations

--> Marketing research --> open communication with E'ees

employee performance

--> employee training --> evaluation and compensation systems

service quality specifications

-->service goals -->management commitment to service quality

Intangibility

-Difficult for customer to evaluate -Customer does not take physical possession -Difficult to advertise and display -Difficult to set and justify prices -Service process is usually not protect-able by patents

Assurance: Knowledge/competence of E'ees and ability to convey trust and confidence

-Knowledge and skills of E'ees -Company name and reputation -Personal characteristics of E'ees i.e. A highly trained financial adviser i.e. a known and respected service provider i.e. a doctors bedside manner

Intensive Distribution

-Uses all available outlets to distribute a product -For most convenience products (bread, gum soft drinks) -Multiple channels may be used

Reliability: Consistency and dependability in performing the service

-accuracy of billing or record keeping -performing service when promised i.e. an accurate bank statement i.e. a confirmed hotel reservation i.e. the equipment used in a medical exam

Tangibles: physical evidence of the service

-appearance of physical facilities -appearance of service personnel -tools or equipment used to provide the service i.e. a clean and professional doctors office i.e. a clean and neatly attired repair person i.e. the freshness of food in a restaurant i.e. the equipment used in a medical exam

Empathy: Caring and individual attention provided by E'ees

-listening to customer needs -caring about customers interests -providing personalized attention i.e. a store E'ee listening to and trying to understand a customers complaint i.e. a nurse counseling a heart patient

Responsiveness: Willingness or readiness of E'ees to provide the service

-returning customer phone calls -providing prompt service -handling urgent requests i.e. a server refilling a customers coffee cup without being asked i.e. an ambulance arriving within in 3 minutes

Selecting marketing channels

1. Customer Characteristics 2. Product Attributes 3. Type of Organization 4. Degree of Competition 5. Environmental Forces 6. Characteristics of Intermediaries

Total product offering

3 interdependent elements (1) the core product (2) supplemental features (3) symbolic or experiential benefits

(1) Manufacturer Brands

A brand initiated by producers to ensure that producers are identified with their products at the point of purchase i.e. Green Giant, Dell Computer & Levi Jeans

Target Public

A collective of individuals who have an interest in or a concern about an organization, product, or social cause i.e. Target PUBLIC for ACCION International is anyone interested in supporting international development and relief work; HOWEVER i.e. Target MARKET for ACCION's ads consists of people in developing nations who want microloans to start businesses and spur economic development

An Idea

A concept, philosophy, image, or issue; provide a psychological stimulation that aids in solving problems to the environment i.e. Charity: water uses traditional marketing and social media to raise money to dig wells and bring safe drinking water to those who lack access

Product Line

A group of closely related product items viewed as a unit because of marketing, technical, end-use considerations --> Firms with high market share are more likely to expand their product lines aggressively i.e. different shades of lipsticks, shampoos for oily and dry hair

Brand

A name, term, design, symbol, or other feature that identifies one seller's product as distinct from those of other sellers --> Everything associated with the product, including symbolism and experiences i.e. Coke FAILING the new coke brand i.e. Miller using retro can look had sales increase dramatically (simple brand change)

Home-sourcing

A practice whereby customer contact jobs are outsourced into workers homes --> led to increased prosperity and interest in financial services, travel, entertainment, and personal care

General-Merchandise Retailer

A retail establishment that offers a variety of product lines that are stocked in considerable depth 8 types of GM retailers BELOW

Category Management

A retail strategy of managing groups of similar, often substitutable, products produced by different manufacturers i.e. supermarkets use this to allocate space for their many product categories like cosmetics, cereals and soups

Concept Testing

A small sample of potential buyers presented with a product idea to determine their attitudes and buying intentions --> low cost and allows company to determine customers initial reaction to a product before it invests considerable resources into R&D

Product Item

A specific version of a product that can be designated as a distinct offering among a firm's products i.e. american eagle t-shirt

A Good

A tangible physical entity

Direct-Response Marketing

A type of marketing in which a retailer advertises a product and makes it available through mail or telephone orders i.e. TV commercial offering exercise machines, cosmetics, or household cleaning products through a toll-free number

Catalog Marketing

A type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet benefits: advg. in efficiency and convenience for customers because they don't have to visit a store;retailers locating in low cost areas benefits (most effective for a selected set of products) i.e. sharper image catalog

Power Shopping Center

A type of shopping center that combines off-price stores with category killers may be anchored popular stores like Gap, Toys R Us, PetSmart, and Home Depot outlets usually in noncompetitive locations

Lifestyle Shopping Center

A type of shopping center that is typically open air and features upscale specialty, dining, and entertainment stores i.e. Austins Domain includes offices, hotels, and residences (architecture is an important aspect of these "mini-cities") encourage consumer loyalty by creating a sense of place

Neighborhood Shopping Centers

A type of shopping center usually consistent of several small convenience stores and specialty stores i.e. strip malls

Community Shopping Centers

A type of shopping center with one or two department stores, some specialty stores, and convenience stores (have wide product mixes and deep product lines) i.e. art exhibits, auto shows, sidewalk sales, stimulate traffic

Regional Shopping Centers

A type of shopping center with the largest department stores, widest product mixes, and deepest product lines of all shopping centers --> have largest department stores, widest product mixes and deepest product lines of all shopping centers --> people who have to travel from a distance to find products and prices not available in hometowns

Super-Regional Shopping Centers

A type of shopping center with the widest and deepest product mixes that attract customers from many miles away (have special attractions beyond stores like skating rinks, amusement centers, or upscale restaurants)

Category Killer

A very large specialty store that concentrates on a major product category and completes on the basis of low prices and product availability --> expand rapidly and gain sizable market shares, taking business away retail outlets i.e. Home Depot and Lowes(home improvement), Staples (off. supp.), Barnes and Noble (bookseller), Petco and Petsmart (pet supply), Best Buy(electronics) --> online retailing has taken market share away from category killers in recent years i.e. toys r us struggles with amazon

Interior atmospheric elements

Aesthetic considerations such as lighting, wall and floor coverings, dressing facilities and store fixtures i.e. bars, consider several factors like music tempo & volume, lighting and cleanliness i.e. colors can attract shoppers to a retail display (many fast food restaurants use bright colors to make customers feel hungrier and eat faster to increase turnover)

Commission Merchants (factor merchants)

Agents that receive goods on consignment from local sellers and negotiate sales in large, central markets specialize in obtaining the best price possible don't provide promotional support

Brand Licensing

Agreement whereby a company permits another organization to use its brand on other products for a licensing fee ADV: extra revenues and low cost brand expansion DIS-ADV: lack of manufacturing control and the risks of making consumers feel bombarded with too many unrelated products bearing the same name

Customer characteristics

All distinguishing, distinctive, typical or peculiar characteristics and circumstances or customers that can be used in market segmentation to tell one group of customers from another.

Retailing

All transactions in which the buyer intends to consume the product through personal, family, or household use

Franchising

An arrangement in which a supplier (franchiser) grants a deal (franchisee) the right to sell products in exchange for some type of consideration ADV: enables a franchisee to start a business with limited capital and benefit from the business experience of others (lower failure rates than independent establishments) can receive advise and materials to do local advertising from national promotions sponsored by the franchisor

Wholesaler

An individual or organization that sells products that are bought for resale, for making other products, or for general business operations serve as an extension of the producers sales force (& also provide financial assistance)

A Service

An intangible result of the application of human and mechanical efforts to people or objects --> purchased on the basis of expectations i.e. a concert performance by Beyonce, online car insurance, a medical examination, airline flight, child day care

Retailer

An organization that purchases products to resell to consumers; non-retail transactions occur when retailers sell products to other businesses

Marketing information

Analyze sales data and other information in databases and information systems. Perform or commission marketing research.

Depth Product Mix

Average number of different products offered in each product line i.e. Procter and Gamble offers a broad mix of health care, beauty-care, laundry and cleaning, etc.

Exterior atmospheric elements include:

Appearance of the storefront, display windows, entrances and the degree of traffic congestion Particularly important to new customers

Experience Qualities

Attributes that can be assessed only during purchase and consumption of a service --> such as taste, satisfaaction or pleasure i.e. restaurants and vacations

Credence Qualities

Attributes that customers maybe unable to evaluate even after purchasing and consuming a service i.e. surgical operations, auto. repairs, and legal representation --> place a great deal of faith in the integrity and competence of the service provider

Raw Materials

Basic natural materials that become part of a physical product i.e. corn is a raw material found in many different products, including food, beverages, and even fuel

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Branding

Family Branding

Branding all of a firm's products with the same name or part of the name Benefit: when consumers have positive associations with brands if something happens to make consumer think negatively of the brand i.e. Kellogg's Frosted Flakes, Kellogg's Rice Krispies; Arm & Hammer products

Individual Branding

Branding strategy in which each product is given a different name Benefit: if an organization introduces a product that fails in the marketplace, the negative images associated with it don't influence consumers' decisions to purchase the company's other products

Specialty-Line Wholesalers

Full-service wholesalers that carry only a single product line or a few items display racks in stores

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Characteristics of Services

Facilitating exchanges

Choose product assortments that match the needs of customers. Cooperate with channel members to develop partnerships.

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Classifying Products

Hypermarkets

Combination supermarket and discount store; larger than a superstore i.e. Carrefour

core service vs supplementary service

Core is the basic service that a customer expects to receive and Supplementary supports the core service and used to differentiate the service bundle from those of competitors i.e. attending a tutoring session for a class is a core service, but bundled with the core service might be access to outlines w/ additional info. etc.

Brand Loyalty

Customers favorable attitude towards a specific brand --> reduces a brand's vulnerability to a competitors' actions --> customer satisfaction with a brand is the most common reason for loyalty to that brand --> reduces buyers risks and shortens the time spent deciding i.e. hard for a firm to foster loyalty for products like fruits and vegs. because consumers judge quality by looking at them without referring to a brand 3 Degrees of Brand Loyalty (1)recognition (2)preference (3)insistence

Service Quality

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

Client Publics

DIRECT Consumers of a product of a nonprofit organization --> usually receives most of the attention when an organization develops a marketing strategy i.e. client public for a university is its student body

Brand Preference

Degree of brand loyalty in which a customer prefers one brand over competitive offerings

Brand Insistence

Degree of brand loyalty in which a customer strongly prefers a specific brand and will accept no substitute (STRONGEST AND LEAST COMMON LEVEL)

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Developing New Products

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Developing and Managing Marketing Mixes for Services

Multichannel Retailing

Employing multiple distribution channels that COMPLIMENT their brisk-and-mortar stores with websites, catelogs, and apps where consumers can research products, and make actual purchases --> the most effective strategies integrate the firms goals, products, systems, and technologies seamlessly across all platforms (phone,compt.)

channel cooperation

Enables retailers, wholesalers, suppliers and logistics providers to: -Speed up inventory replenishment -Improve customer service -Cut the costs of bringing products to customers

Accessory Equipment

Equipment that does not become part of the final physical product but is used in production or office activities --> often treated as expense items rather than capital items because they aren't expected to last as long i.e. file cabinets, calculators, tools

Price

Establish pricing policies and terms of sales

Installations

Facilities and nonprofitable major equipment --> normally expensive and intended to be used for a long time

Warehouse Showrooms

Facility in a large, low-cost building with large on-premises inventories and minimal services i.e. IKEA

Innovators

First adopters of a new product --> enjoy trying new products and don't mind taking a risk

Product Adoption Process

Five Stage process of buyer acceptance of a product Awareness: becomes aware Interest: buyer seeks info and receptive to learn about product Evaluation: buyer considers product benefits and whether to try it, considers the value vs competition Trial: buyer examines, tests, or tries the product to determine if it meets his or her needs Adoption: buyer purchases the product and can be expected to use it again whenever the need for it arises (rejection may occur)

Television Home Shopping

Form of selling in which products are presented to television viewers, who can buy them by calling a toll-free number and paying with a credit card popular among older people, and people who are less comfortable with online shopping and less mobile to physically go to a store i.e. most popular products sold through this are jewelry, clothing, housewares, electronics i.e. QVC is largest

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Foundations of the Supply Chain

Trade Name

Full legal name of an organization i.e. Ford Motor Company, rather than the name of a specific product

General-Merchandise Wholesalers

Full-Service wholesalers with a wide product mix but limited depth within product lines i.e. deal with drugs, nonperishable foods, cosmetics, detergents, and tobacco

Limited-Line Wholesalers

Full-service wholesalers that carry only a few product lines but many products within those lines i.e. amerisourcebergen copr is a whole

Rack Jobbers

Full-service, specialty-line wholesalers that own and maintain display racks in stores Retailers provide the space, and they set up displays, mark merchandise, stock shelves, and keep billing inventory records i.e. specialize in NON-FOOD items with high profit margins like health and beauty aids, books, magazines, hosiery, and greeting cards

Superstores

Giant retail outlets that carry food and nonfood products found in supermarkets, as well as most routinely purchased consumer products i.e. Walmart Supercenters, SuperTarget

General Publics

INDIRECT consumers of a product of a nonprofit organization i.e. general public for a university includes parents, alumni, and trustees

Disruptive innovation

Identifies old technologies that can be exploited in new ways OR develops new business models to give customers more than they've come to expect from current products in a specific market i.e. Dollar shave club created after recognizing that buying refill cartridges for mens razors is boring, expensive and a pain in the ass

Retail Positioning

Identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment i.e. H&M is positioned as a low-priced fashion-forward retailer; however to be associated with fair business practices they announced prices would increase to allow the retailer to pay its employees a living wage, to reposition itself as a socially responsible retailer at expense of large dept. stores

Client-Based Relationships

Interactions that result in satisfied customers who use a service repeatedly over time --> word-of-mouth is a key factor in creating and maintaining these relationships -Success depends on satisfying and keeping customers over the long term -Generating repeat business is challenging -Relationship marketing becomes critical

Merchant Wholesalers

Independently owned businesses that take title to goods, assume ownership risks, and buy and resell products to other wholesalers, business customers, or retailers (jobber, wholesaler, distributor, assembler, exporter, and importer) Either a FULL SERVICE or LIMITED SERVICE

Early Majority

Individuals who adopt a new product just prior to the average person

Introduction Stage

Initial stage of a product's lifecycle; its first appearance in the market place when sales start at 0 and profits are negative --> efforts to highlight a new products value can create a foundation for building brand loyalty and customer relationships --> 2 difficulties may arise 1) sellers may lack the resources to launch the product successfully 2) Initial product price may have to be high to recoup expensive marketing R&D costs which can depress sales

Service Characteristics

Intangibility Inseparability Variability Perishability heterogeneity Client-based relationships Customer contact

Business Services

Intangible products that many organizations use in operations i.e. Progressive ad promoting how insurance products provide "coverage that keeps your business moving forward"

Intensity of Market Coverage

Intensive-convenience products, such as Coke, Pringles, and batteries (available in many retail outlets) Selective-Shopping products such as iPods, TV's, DVD players, and shoes (available in some outlets) Exclusive-Specialty products, such as Haute Cotoure, Mont Blanc pens, BMWs, and Fendi handbags (available in very few outlets)

Selling Agents

Intermediaries that market a whole product line or a manufacturer's entire output perform every wholesale activity except taking title to products unlike manufacturing agents they have no territorial limits and have complete authority over prices, promotion, and distribution

Brokers

Intermediaries that represent buyers and sellers together temporarily --> Food Brokers --> Real Estate brokers --> Other brokers (e.g. securities, insurance)

Agents

Intermediaries that represent either buyers or sellers on a permanent basis --> Manufacturers' agents --> Selling agents --> Commission merchants

Digital distribution

Involves delivering content through the internet to a computer or other device i.e. when you watch a TV show or Netflix or Hulu or listen to music on spotify or pandora, those networks stream the content to your devivce so taht you can consume them at the same time i.e. booking hotels, reading books, etc.

Component Parts

Items that become part of the physical product and are either finished items ready for assembly or items that need little processing before assembly i.e. spark plugs, tires, clocks, brakes and headlights are all component parts of a car

Shopping Products

Items that buyers are willing to use considerable effort in planning and making purchases -->expect higher gross margins for lower turnover; emphasizes perks and exclusiveness i.e. TV's, furniture, cameras

Specialty Products

Items with unique characteristics that buyers are willing to use considerable effort to obtain --> will not accept a substitute i.e. Fine Jewelry, collectors items

Department Stores

Large retail organizations characterized by a wide product mix and organized into separate departments service oriented, most are shopping stores i.e. Macys, Sears, JCPenney

Supermarkets

Large, self-service stores that offer complete line of food products and some nonfood products i.e. Kroger, Safeway, Publix

Warehouse Clubs

Large-scale, members-only establishments that combine features of cash-and-carry wholesaling with discount retailing i.e. Sam's Club, Costco

Customer Contact

Level of interaction between provider and customer needed to deliver the service --> High contact services include health care, real estate, and legal services --> E'ee satisfaction is key in high quality service --> Low contact services are tax preparation, auto repair, travel reservations, and dry cleaning --> technology has enabled many service-oriented businesses to reduce their level of customer contact --> i.e. most airlines have apps -Service providers are critical to delivery -Requires high levels of service E'ee training and motivation -Changing a high-contact service into a low-contact service to achieve lower costs is difficult to achieve without reducing customer satisfaction

Mail-Order Wholesalers

Limited-service wholesalers that sell products through catalogs i.e. cosmetics, specialty foods, sporting goods, office supplies, and automotive parts internet helps

Drop Shippers (desk jobbers)

Limited-service wholesalers that take title to goods and negotiate sales but never actually take possession of products assume responsibility for products during the entire transaction, including costs of any unsold goods

Truck Wholesalers (truck jobbers)

Limited-service wholesalers that transport products directly to customers for inspection and selection

Cash-And-Carry Wholesalers

Limited-service wholesalers whose customers pay cash and furnish transactions usually handle limited service products with a high turnover rate like groceries, building materials, and electrical or office supplies

MRO Supplies

Maintenance, Repair, and operating items that facilitate production and operations but DO NOT become part of the finished product. i.e. paper, pencils, cleaning supplies, and paints

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Major Types of Retail Stores

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Managing Existing Product

Sales Branches

Manufacturer-owned intermediaries that sell products and provide support services to the manufacture's sales force

Sales Offices

Manufacturer-owned operations that provide services normally associated with agents

Non-Profit Marketing

Marketing Activities conducted to achieve some goal other than ordinary business goals such as Profit, market Share, or return on investment 2 categories 1) non-profit- use of concepts and techniques by orgs. whose goals DON'T include making profits 2) social marketing- promotes social causes, such as AIDS research or recycling

Ch. 14

Marketing Channels and Supply Chain-Management

Marketing Channel Activities Performed by Intermediaries

Marketing Information, Marketing Management, Facilitating exchanges, Promotion, Price, Physical distribution

Brand Equity

Marketing and financial value associated with a brand's strength in the market 4 Major elements (1) brand name awareness (2) brand loyalty (3) perceived brand quality (4) brand associations

Direct Selling

Marketing products to ultimate consumers through fact-to-face sales presentations at home or in the workplace (MOST EXPENSIVE form of retailing) i.e. Cutco, Mary Kay collective societies prize the one-on-one attention and feel like they are connecting with the person

Process Materials

Materials that are used directly in the production of other products that aren't readily identifiable i.e. a salad dressing manufacturer includes vinegar as an ingredient in dressing; the VINEGAR is a process material because its not identifiable from the other ingredients in the dressing

Full-Service Wholesalers

Merchant wholesalers that perform the widest range of wholesaling products handle either consumer or business products and provide numerous marketing services to customers i.e. many large grocery wholesalers help retailers with store design, site selection, financing, etc. 3 Types: General, Limited, Specialty

Limited-Service Wholesalers

Merchant wholesalers that provide some services and specialize in a few functions Take title to merchandise, but often don't deliver merchandise, grant credit, provide marketing info, or plan ahead for customers future needs Charge lower rates, and smaller profit margins than full-service wholesalers

Width Product Mix

Number of product lines that a company offers i.e. Deere & Co. offers multiple product lines for the ag industry, such as tractors, scrapers, etc.

Brand Name

Part of a brand that can be spoken, including letters, words, and numbers --> products only distinguishing characteristic without it a firm couldn't differentiate its products i.e. 7UP or V8

Brand Mark

Part of a brand that is not made up of words such as a symbol or design i.e. McD's Golden Arches; Nike's Swoosh; Apples apple with a bite missing

Early Adopters

People who adopt new products early, choose new products, and are viewed as "the people to check with" by later adopters.

Off-Peak Pricing

Practice of reducing prices of services used during slow periods in order to boost demand

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Product Adoption Process

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Product Differentiation Through Quality, Design, and Support Services

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Product Life Cycles and Marketing Strategies

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Product Line and Product Mix

Unsought Products

Products purchased to solve a sudden problem, products of which customers are unaware, and products that people do not necessarily think of buying. Little time to plan, speed of problem resolution is more important than price i.e. emergency medical services or automobile repairs

Product Lifecycle

Progression of a product through 4 stages; introduction growth maturity decline

Labeling

Providing, identifying, promotional, or other information on package labels i.e. stickers on a banana or apple

Convenience Products

Relatively inexpensive, frequently purchased items, minimal purchasing effort i.e. Coca Cola, Wrigley's Doesn't even mention where its sold because of high availability

extreme-value stores

Retailers that are a fraction of the size of conventional discount stores and typically offer very low prices on smaller size name-brand nonperishable household items i.e. Dollar stores

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Retailing

Online Retailing

Retailing that makes products available to buyers through computer connections satisfies an increasing expectation among consumers to have multiple channels available to obtain the goods and services they desire at their convenience

Ch. 15

Retailing, Direct Marketing, Wholesaling

Discount Stores

Self-Service, general-merchandise stores that offer brand-name and private-brand products at low prices Accept lower profit margins in exchange for high sales volume i.e. Walmart, Target

Selective

Shopping products such as iPods, TV's, DVD players, and shoes (available in some outlets); willing to visit several retail outlets and websites to compare prices, designs, etc.

Exclusive

Specialty products, such as Haute Cotoure, Mont Blanc pens, BMWs, and Fendi handbags (available in very few locations)

Decline Stage

Stage in a product's lifecycle when sales fall rapidly --> At this stage marketers must consider eliminating items from the product line that no longer earn a profit --> Decide whether to reposition the product to extend the life or eliminate it i.e. The decline in demand for soda; companies turning to flavored water, and juices

Maturity Stage

Stage of a product's lifecycle when the sale's curve peaks and starts to decline and profits continue to fall. --> intense competition --> To INCREASE the sales of mature products, marketers may suggest new uses for them i.e. Nestle removing artificial flavoring from candy bars turning critics into loyal customers i.e. DVDs are an example of a product in the maturity phase as internet streaming of entertainment grows in popularity i.e. Tablets, Amazons V Apples; FireHD8 touts the tablet is more durable than an iPad, and greater access to movies, books, and PRICE.

Off-Price Retailers

Stores that buy manufacturers' seconds, season merchandise for resale to consumers at deep discounts i.e. T.J. Maxx, Marshalls Steinmart, Burlington --> perform well in recessionary times --> compete with dept. stores for the same price-concious customers about brands --> Dept. stores tolerate off-price stores as long as they don't advertise brand names, and are far from dept. stores

Traditional Specialty Retailers

Stores that carry a narrow product mix with deep product lines i.e. The Limited, Gap, Sunglass Hut, Foot Locker

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Strategic Issues In Retailing

Channel Power

The ability of one channel member to influence another member's goal achievement

Brand Recognition

The degree of brand loyalty in which a customer is aware that a brand exists and views the brand as an alternative purchase if their preferred brand is unavailable (WEAKEST FORM)

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The growth and importance of services

Perishability

The inability of unused service capacity to be stored for future use; goods are generally less perishable than services --> service marketers don't have the same advantage and face several hurdles in trying to balance supply and demand i.e. empty seats on an airline flight today can't be stored and sold to passengers at a later date i.e. unsold basketball tickets, unscheduled dentists appts, empty hotel rooms -Services can't be stored -Balancing supply and demand is very difficult -Unused capacity is lost forever -Demand may be very time sensitive

Laggards

The last adopters who distrusts new products

Telemarketing

The performance of marketing-related activities by telephone (less popular method since new mktg laws)

Atmospherics

The physical elements in a store's design that appeal to consumers' emotions and encourage buying to help create an image and position a retailer i.e. can use different elements like music, color, and complexity of layout and merchandise presentation

Business Analysis

The product idea is evaluated to determine its potential contribution to sales, costs and profits --> firms seek marketing info.

(1) Core product

The product's fundamental utility or MAIN BENEFIT addresses the basic need of the consumer

Inseparability

The quality of being produced and consumed at the same time --> implies a shared responsibility between the customer and service provider --> customers not only want a specific type of service but expect it to be provided in a specific way by a specific individual (medical exam, Dr.) i.e. an airline flight is produced and consumed simultaneously (services are produced, sold, and consumed at the same time) --> GOODS mktg, a customer can purchase a good, take it home and store it until ready for use(tangible) --> SERVICE mktg, a customer must be present at the production of service (investments or surgery) and cant the service home -Service provider cant mass-produce services -customer must participate in product -other consumers affect service outcomes -Services are difficult to distribute

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The role of marketing channels in supply chains

Nonstore Retailing

The selling of products outside the confines of a retail facility a form of direct marketing that accounts for an increasing part of total retail sales and online retailing

Automatic Vending

The use of machines to dispense products can be high costs for equipment and repairs

Direct Marketing

The use of the telephone, internet, and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone, or the internet one type of nonstore retailing

Opportunity Costs

The value of the benefit given up by choosing one alternative over another

Marketing channels create 4 types of Utility

Time, place, possession, and form

Wholesaling

Transactions in which products are bought for resale, for making other products, or for general business operations wholesaling activities are not limited to goods play a key role in Supply-chain mgmt decisions

Family Packaging

Using similar packaging for all of a firms products or packaging that has one common design element i.e. Campbell's soups, Weight Watchers' foods, or Planters Nuts

Co-Branding

Using two or more brands on one product --> used to capitalize the trust and confidence customers have in the brands involved i.e Cinnabon released co-branded items with Kellogg's (cereal) and Pillsbury (toaster strudel)

Functional Modifications

Usually require redesign of the product i.e. ag. equipment, appliances, cleaning products, TV services --> sometimes made to reduce the possibility of product liability lawsuits, such as a kill switch on a machine in case it malfunctions --> helps maintain a progressive image i.e. making programs 3D on DirectTV i.e. iPhone is salways adding new features

Heterogeneity

Variation in quality --> training mitigates heterogeneity --> increases while the degree of labor intensiveness increases with services like (auto repair, education, barbers) --> allows them to customize their services to match the specific needs of individual customers -Service quality is difficult to control -Service delivery is difficult to standardize

Strategic channel alliance

When products of one organization are distributed through the marketing channels of another --> the products of two firms are often similar with respect to target markets or uses, but they aren't direct competitors i.e. a brand of bottled water might be distributed through a marketing channel for soft drinks or a cereal producer in the U.S. might for a strategic channel alliance with a European food processor to facilitate intntl. distribution (e.g. Clinique sold in dept. stores and online)

(3) Generic Brands

a brand indicating only the product category (no company name or other identifying terms) i.e. salt, sugar, aluminum foil

Rollout

a company introduces a new product or service to different geographical markets or consumer segments (1) reduces risks of introducing a new product, experience smaller losses (2) cant introduce a product nationwide overnight because distribution of the product cant be established that quick (3) if successful, number of units needed to satisfy nationwide demand for it may be too large for the firm to produce in a short time (4) lastly, gradual introduction allows for fine-tuning of the marketing mix to satisfy target customers i.e. Tesla using this strategy to build demand for its electric cars; has allowed the company to expand production capacity to accommodate the growing demand --> can create problems, allowing competitors to observe the firms actions; or expanding in their region to offset promotions of the new product

Marketing Channel (channel of distribution)

a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain -->major role is to make products available at the right time at the right place in the right quantities (achieving synergy) -->least flexible component of the marketing mix

Test Marketing

a limited introduction of a product in geographic areas chosen to represent the intended market -->sample launching of the entire marketing mix --> used to lessen the risk of product failure i.e. Chipotle tested a chorizo option in Kansas City locations to determine the extent customers will buy the product

comparison shopping

allows customers to evaluate different options i.e. car dealerships cluster in the same general vicinity, as do furniture stores

industrial distributor

an independent business organization that takes title to products and carries inventories --> usually sell standardized items, such as maintenance supplies, production tools, and small operating equipment --> 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

Service Quality Model

analysis of customer expectations, service quality specifications, employee performance, and management of service expectations

customer services

any human or mechanical efforts or activities a company provides that add value to a product --> all marketers of goods sell customer services i.e. delivery & installation, financing arrangements, customer training, warranties, and guarantees i.e. Trader Joe's stands out among supermarkets for its customer service, striving to ensure nothing interrupts the positive experience

Form utility

by assembling, preparing, or otherwise refining the product to suit individual customer needs

beacons

can send real-time messages and offers to customers with Blue-tooth enabled smartphones i.e. Gamestop outlets in Texas beacons can trigger a customer's access to product details, etc, by expediting their product research right in the store

Aesthetic Modifications

change the sensory appeal of a product by altering its taste, texture, sound, smell, or appearance; strongly affects purchase --> can help a firm differentiate its product --> DRAWBACK: their value is subjective to customers (can be found less attractive) i.e. Louis V maintains its rep for new design and quality by doing this regularly

Quality Modifications

changes relating to a product's dependability and durability i.e. energizer battery has gone under mods to make it last longer and be more environmentally friendly due to its recycled content

Product modifications

changing one or more characteristics of a product; the original product DOESN'T REMAIN in the line -> can improve product mix under 3 conditions i.e. automakers use modifications annually when they create new models of the same brand i.e. running shoes follow this practice releasing new shoe models every year and retiring old ones

customized services

companies that tailor research procedures to best meet the needs of each client i.e. LensCrafters offers customized eyeware services that fulfill specific needs for each of its customers --> plays a key role in providing competitive advantage for the service provider

Intensive

convenience products, such as Coke, Pringles, and batteries (available in many retail outlets)

(b) consistency of quality

degree that a product has the same level of quality over time --> giving consumers the quality they expect every time they purchase the product --> i.e. FedEx offers reliable delivery schedules and a variety of option, ranking it at the top of consumer shipping companies

Product Development

determining if producing a product is technically feasible and cost effective --> converted into a prototype to reveal tangible and intangible attributes with the product; performance must be assessed --> How much quality to build into the product? --> durability;quality of competing brands --> lengthy and expensive process (only a small number of ideas are put into this stage)

Line extension

development of a product that is closely related to existing products in the line but is designed specifically to meet DIFFERENT customer NEEDS --> more common than new products because they are a less-expensive, lower-risk alternative for increasing sales --> may focus on a different market segment or attempt to increase sales within same market i.e. tidy cats line extension that features glade to freshen the scent for people who don't like the smell i.e. Coke markets diet coke, coke zero, to appeal to customers who have differing needs and wants with regard to their drinks;

Channel conflict

disagreements among marketing channel members on goals, roles, and rewards - who should do what and for what rewards --> brands exclusivity, branching to the internet instead of only select locations, creating potential resentment among those stores if they lose business (e.g. Tag Heuer) --> conflict can also arise when intermediaries overemphasize competing products or diversify into product lines traditionally handled by other intermediaries --> self interest creating misunderstanding about role expectations can result in conflict for a whole channel CAN BE RE-ESTABLISHED IF:[2 conditions met] (1) the role of each channel member must be clearly defined and followed, clear understanding of goals and expectations (2) members of channel partnerships must agree on means of coordinating channels, to have strong leadership

Specialty Retailers

emphasize narrow and deep assortments; [3 different types] (1) Traditional (2)Category Killers (3)Off-price Retailers

Marketing management

establish strategic and tactical plans for developing customer relationships and organizational productivity

marketing intermediaries

firms that help the company to promote, sell, and distribute its goods to final buyers i.e. wholesalers and retailers are intermediaries

Types of Organization

has a great impact on distribution channels being chosen i.e. large companies can use an expensive product mix as a competitive tool i.e. smaller companies use regional/local channel members, and might be in a strong position to cater its marketing mix, compared to a large less-flexible org.

Time utility

having products available when the customer wants them i.e. netflix allowing customers to watch a movie whenever they want

(2) Supplemental features

help differentiate one product brand from another and may increase customer loyalty i.e. unlimited texting, high-speed internet access, and apps

Product Design

how a product is conceived, planned, and produced --> good design is one of the best competitive advantages any brand can possess

Channel management

i.e. all activities related to selling, service, and the development of long-term customer relationships

Competition

important factor for supply-chain managers; in a competitive market its important for a company to maintain low costs so it can offer lower prices than its competitors to have comp. adv.

Manufacturers' Agents

independent intermediaries that represent two or more sellers and usually offer customers complete product lines commonly used in sales of apparel, machinery, equipment, steel, furniture, etc.

(2) Private Distributor Brands

initiated and owned by a re-seller --> manufacturers aren't identified on the products --> used to develop more efficient promotion, higher gross margins, and change store image --> sometimes retailers with successful private brands start manufacturing their own products to gain more control over product costs, quality, and design in the hope to increase profits

5 Major adopter categories

innovators early adopters early majority late majority laggards

Logistics management

involves planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of orgin to consumption to meet customers needs and wants i.e. all activities designed to move the product through the marketing channel to the end user, including warehousing and inventory management

Place utility

making products available in locations where customers wish to purchase them i.e. Zappos allows customers to shop for shoes and accessories anywhere they have access to a mobile device and an internet connection

Physical distribution

manage transportation, warehousing, materials handling, inventory control, and communication

Possession utility

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

webrooming

most shoppers now research products online and then head to the nearest store to make the actual purchase i.e. for most consumers, there's no clear line between brick and mortar store, the stores website and its app, and they move back and forth depending on their circumstances and desires

styling

physical appearance of the product; one design feature that can allow certain products to sell very rapidly --> encompasses a product's functionality and usefulness --> i.e. a pair of jeans may look great, but going to shit after 3 washes, the design is poor

Commercialization

plans for full-scale manufacturing and marketing must be refined and settled and budgets for the project are prepared -->when the product ENTERS the market

Screening

product ideas are analyzed to determine if they match the organizations mission, objectives, and resources; Most new product ideas are rejected during this phase

Consumer products

products purchased to satisfy personal and family needs 4 categories --> Convenience --> Shopping --> Specialty --> Unsought

supply management

progress of value from raw material to final customer and back to redesign and final disposition i.e. Sourcing of necessary resources, goods, and services from suppliers to support all supply-chain members

business products

purchased on the basis of an organizations goals and objectives. 7 categories --> installations --> accessory equipment --> raw materials --> component parts --> process materials --> MRO supplies

Product Attributes

quality, features, style and design i.e. expensive products like cars will employ short channels, as will marketers of perishable products; and fragile items to reduce risk i.e. less-expensive products with long shelf lives can go through longer channels with many intermediaries

3 Major types of modifications

quality, functional, and aesthetic

Idea Generation

seeking product ideas to achieve objectives

Promotion

set promotional objectives. Coordinate ads, personal selling, sales promotion, publicity, and packaging

Convenience Store

small self-service store that is open long hours and carries a narrow assortment in convenient locations i.e. 7-eleven

Product features

specific design characteristics that allow a product to perform certain tasks i.e. Nike offers a range of shoes designed for purposes from walking, running, to weightlifting, to cross-training in a gym

store image

store environment, merchandise quality, and service quality are key determinants

Picking between Full Service & Limited-Service Wholesalers depends on

structure of the marketing channel and the need to manage the supply chain to create a competitive advantage Limited service are less common but important in the distribution of products like specialty foods, perishable items, construction materials, and coal

(a) level of quality

the amount quality a product possess i.e. ad for a GMC midsize pickup stresses the products level of quality comparing it to the precision of a fine watch; hinting that it could only be built by GMC; reinforcing quality as measured by precision

Channel Captain (Channel Leader)

the dominant leader of a marketing channel or a supply chain; may be a producer, wholesaler, or retailer i.e. Walmart dominates the SC for its retail stores by virtue of the magnitude of its resources and a strong nationwide customer base

Product Quality

the overall characteristics of a product that allow it to perform AS EXPECTED in satisfying customer needs --> consumer high quality products: durable, reliable, easy to maintain --> business high quality products: markets, technical suitability, ease of repair, and company reputation --> i.e. the craftsman line of tools at sears is an example of a product with a reputation for durability

Operations management

the total set of managerial activities used by an organization to transform resource inputs into goods, services, or both i.e. Organizational and system-wide coordination of operations and partnerships to meet customers' product needs

Multichannel distribution

the use of a variety of marketing channels to ensure maximum distribution --> primary reason for using this is to reach target customers wherever and they may choose to interact with a company or its products

(3) Symbolic benefits

trendy brand name when purchasing a phone i.e. Prudential Insurance features the rock of Gibraltar on its logo to symbolize strength and permanency

Growth Stage

when sales rise rapidly, profits reach a peak, and then they start to decline as more competitors enter market --> gain favorably by emphasizing product benefits; also price cuts is typical to gain mkt share --> Goal: fortify product's market position by encouraging adoption and brand loyalty; stress brand benefits i.e. silk almond milk promoting adoption of product by promoting taste preferred to milk