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*marketing POM ch. 9*
*marketing POM ch. 9*
30
Marketing
Undergraduate 3
12/15/2009

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Cards

Term
what are the four major stages of the product life cycle?
Definition

1. market introduction

2. market growth

3. market maturity

4. sales decline

Term
what is the product life cycle concerned with?
Definition
new types (or categories) of products in the market, not just what happens to an individual brand
Term
what usually changes during the product life cycle?
Definition
a particular firm's marketing mix
Term
what declines while industry sales are still rising?
Definition
industry profits
Term
why do most companies experience loss during the introduction stage?
Definition
because they spend so much money on development
Term
what happens in the market introduction stage?
Definition
sales are low as a new idea is first introduced to a market
Term
what is needed to tell potential customers about the advantages and uses of the new-product concept?
Definition
informative promotion
Term
what happens in the market growth stage?
Definition
industry sales grow fast--but industry profits rise and then start falling
Term
when do competitors enter the market?
Definition
in the market growth stage
Term
what is typical of the market growth stage?
Definition
monopolistic competition--with down-sloping demand curves
Term
what is the time of biggest profits for the industry?
Definition
market growth stage
Term
what happens towards the end of the market growth stage?
Definition
industry profits begin to decline as competition and consumer price sensitivity increases
Term
when does the market maturity stage occur?
Definition
when industry sales level off and competition gets tougher
Term
why do industry profits go down throughout the market maturity stage?
Definition
because promotion costs rise and some competitors cut prices to attract business
Term
persuasive promotion becomes important in what stage?
Definition
market maturity stage
Term
in the U.S., what markets are in market maturity?
Definition
most cars, boats, and many household appliances
Term
what happens during the sales decline stage?
Definition
new products replace the old
Term
duing the sales decline stage, how can firms make profit until the end?
Definition
by successfully differentiating their products
Term
what characteristics propel a new product idea more quickly through the early stages of the life cycle?
Definition

1. the greater the comparative advantage of a new product over those already on the market

2. the product is easy to use and if its advantages are easy to communicate

3. if a product can be tried on a limited basis, without a lot of risk to the consumer

4. if the product is compatible with the values and experiences of target customers

Term
fashion related products tend to have what kind of life cycles?
Definition
short
Term
what is the limit for calling a product new, according to the Federal Trade Commission (FTC)
Definition
six months
Term
how can new products fail?
Definition

1. companies fail to offer a unique benefit or underestimate the competition

2. idea is good but company has design problems, or product costs much more to produce than was expected

3. some companies rush to get product on market without developing complete marketing plan

Term
what are the five steps to a new product development process?
Definition

1. idea generation

2. screening--evaluating the new ideas with SWOT analysis

3. idea evaluation

4. development (of product and marketing mix)

involves research, development, engineering design

5. commercialization

Term
concept testing
Definition

getting reactions from customers about how well a new product idea fits their needs

uses marketing research

Term
what are product managers?
Definition

manage specific products--often taking over the jobs formerly handled by an advertising manager

major responsibility is promotion

Term
total quality management (TQM)
Definition
philosophy that everyone in an organization is concerned about quality throughout all of the firm's activities, to better serve customer needs
Term
pareto chart
Definition
graph that shows the number of times a problem cause occurs, with problem causes ordered from most frequent to least frequent
Term
what are two keys to improving service quality?
Definition
training and empowerment
Term
what does empowerment mean?
Definition
giving employees the authority to correct a problem without first checking with management
Term
what is benchmarking?
Definition
picking a basis of comparison for evaluating how well a job is being done
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