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marketing test 3
chapters 11-15 david fallin k-state 2011
34
Marketing
Undergraduate 2
10/17/2011

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Term
product life cycle
Definition
the stages a new product goes through in the marketplace; introduction, growth, maturity, and decline
Term
introduction stage
Definition

a product is introduced to its intended target market

sales grow slowly, profit is minimal

Term
trial
Definition
the initial purchase of a product by a consumer
Term
primary demand
Definition
the desire for the product class rather than for a specific brand
Term
selective demand
Definition
preference for a specific brand
Term
skimming strategy
Definition
using a high initial price to enter the market, helps the company recover the costs of development and capitalize on price insensitivity of early buyers
Term
penetration pricing (lol penetration)
Definition
penis in vagina jk its when companies price low to discourage competitive entry, helps build unit volume but the company must monitor costs
Term
growth stage
Definition
characterized by rapid increases in sales - this is when competitors appear, profit is usually at its peak
Term
repeat purchasers
Definition
people who tried the product, were satisfied, and bought again
Term
maturity stage
Definition
characterized by a slowing of total industry sales or product class revenue.  marginal competitors begin to leave the market.
Term
decline stage
Definition
the decline stage occurs when sales drop - frequently, products enter this stage not because of any wrong strategy on the part of companies, but because of environmental changes
Term
product deletion
Definition
dropping the product from the company's product line - most drastic
Term
product harvesting
Definition
when a company retains the product but reduces marketing costs; the product continues to be offered, but salespeople do not allocate time in selling nor are advertising dollars spent
Term
what are the four aspects of the product life cycle?
Definition

length: no set time to move through life cycle, as a rule consumer products have shorter life cycles than business products

shape of sales curve: 4 types: high learning, low learning, fashion, fad

how they vary with different levels of products: product class and product form

the rate at which consumers adopt products: life cycle depends on sales to consumers, different types of barriers

Term
high learning product
Definition
one for which significant customer education is required and there is an extended introductory period
Term
low learning product
Definition
sales begin immediately because little learning is required by the consumer and the benefits of the purchase are readily understood - easily imitated by competitors
Term
fashion product
Definition
style of the times, are introduced, decline, then seem to return
Term
fad
Definition
experiences rapid sales on introduction and then an equally rapid decline
Term
what are product class and product form?
Definition

product class - refers to the entire product category or industry, such as prerecorded music

product form - pertains to variations within the product class (cassettes, cds)

Term
what are the barriers associated with the life cycle and consumers?
Definition

usage barriers - the product is not compatible with existing habits

value barriers - the product provides no incentive to change

risk barriers - physical, economical, or social

psychological barriers - cultural differences or image

Term
product modification
Definition
involves altering a products characteristic, such as its quality, performance, or appearance, to increase the products value to customers and increase sales
Term
product bundling
Definition
the sale of two or more separate products in one package
Term
market modification
Definition
company tries to find new customers, increase a products use among existing customers, or create new use situations
Term
product repositioning
Definition
changes the place a product occupies in a consumers mind relative to competitive products
Term
trading up
Definition
involves adding value to the product or line through additional features or higher quality materials
Term
trading down
Definition
reducing the number of features, quality, or price
Term
downsizing
Definition
reducing the package content without changing package size and maintaining or increasing package price
Term
branding
Definition
organization uses a name, phrase, design, symbols, or a combination of these to identify its products and distinguish them from those of competitors
Term
brand name
Definition
any word, device (design, sound, shape, or color), or combination of these used to distinguish a sellers goods or services
Term
seasonal discounts
Definition
encourages buyers to stock inventory earlier than their normal demand would require
Term
trade (functional) discounts
Definition
rewards wholesalers and retailers; reductions off the list price are offered to resellers in the marketing channel on the basis of: where they are in the channel, the marketing activities they are expected to perform in the future
Term
cash discounts
Definition

to encourage sellers to pay bills quickly

 

2/10 net 30

-can take a 2 percent discount if payment is made within 10 days, total is due in 30 days

Term
marketing channel
Definition
consists of individuals and firms involved in the process of making a product or service available for use by consumers or industrial users
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