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marketing test 2
test 2
101
Marketing
Undergraduate 3
03/11/2013

Additional Marketing Flashcards

 


 

Cards

Term
product
Definition

everything a person receives in an exchange (favorable and unfavorable)

  • physical good, service, idea
Term
What are types of products classified in terms of?
Definition
search process
Term
For types of products...
Definition
TYPE is not inherent to a product category, consumer view classifies it
Term
Types of products: convenience item
Definition
  • merits little shopping 
  • habbit, routine
  • impulse buy
  • emergency purchase
Term
Types of products: shopping
Definition

will compare several options

  • vacations, education, clothing
  • spend time looking
Term
Types of products: specialty
Definition

will go out of way to get 

  • one brand name that we like and we will go out of way to get this item
  • ex) people will drive to ATL to get a porche from Athens
Term
Type of products: unsought
Definition

unaware or unwanted

  • ex) root canal
Term

brand

band name

brand mark 

Definition

identification of the seller's product

 

the part that can be spoke

 

the part that cannot be spoken (nike swoosh, yellow M)

Term
global brand
Definition
More than or equal to 33% of brand is sold outside of its home country
Term
What a brand name really is:
Definition

-shortcut in buying

-a promise about performance and quality

Term
Who creates the brand promise?
Definition

1. company

2. other customers

Term

Brand love 

 

what is it called when your company reaches this?

Definition

loyalty beyond reason

 

"lovemark"

 

-apple, disney, nike

Term
brand equity
Definition

value of company or brandname 

 

-what extra value does the brand name bring?

Term
Lanham Act
Definition

Act used to protect a brand to make sure no one else is using it; name has to be original (not "chair")

 

ex) microsoft and internet explorer

Term
Characterisics of brand names:
Definition

-easy to say

-memorable

-suggest product use

-can be easily translated

-unique enough so that it cannot be confused

-evokes correct emotion 

Term
branding strategies
Definition

-brand vs. no brand (generic)

-manufacturer (by producer)

-private (by retailer): ex: publix toasted oats cereal - in many cases this item is identical 

 

Term
Branding strategy: family
Definition

all  products have the same brand name 

  • advantage: stimulus generalization and brand equity
  • disadvantage: name does not skip product
  • ex) honda - cars, generators, motorcyles: ALL called Honda
Term
Branding strategy: individual
Definition

each product has its own brand

  • advantage: product name fits better
  • disadvantage: loose brand equity
  • ex) proctor & gamble: crest, dawn, etc.
Term
Branding: co-branding
Definition

2 indv brands from different companies are shown on one package

  • ex) betty crocker hersheys brownie mix
  • advantage: "I don't buy brownies, but I really like Herseys" - more inclined to get Hersheys
  • disadvantage: one gets a bad rap
Term
Functional benefits of packaging
Definition

-contain and protect: keep it safe!

ex) tylenol used to not be protected and people tampered with it

Term
Percepetual benefits of packaging
Definition

-promote: last 5 seconds

-create image: trying to convey brand promise with colors and visuals

Term
Value benefit of packaging
Definition

-add value beyond contents: not based on what is in package, but the value of the package design

ex) ketchup: design makes it easy to use and squeeze

Term
Product mix
Definition
-All the products a firm offers
Term
SKU
Definition

stock keeping units: because each of its items has its own number

ex) shampoo for oil, dry, tangly, travel size

MANY different SKUs

Term

product line

 

depth and width 

Definition

group of related items where everything in that group is in the same product category 

 

depth: how many items in the product line

 

width: all of the different product lines - ex) soups, sauces, frozen entrees, beverages, biscuits

 

Term

3 variations of "new"

1. New to world

2. New modification

3. New to firm

Definition

1. never been offered before

2. ...

3. ONLY 6 months - after this it is not new anymore - some companies make a change every 6 months so they can call it new

Term
7 steps in the New Product Development Process
Definition
  1. New product strategy
  2. Idea generation
  3. Idea screening
  4. Business analysis
  5. Test development
  6. Test marketing
  7. Commercialization 
Term

1. New product strategy

 

(2 kinds)

Definition

Goal or strategy of how new products will fit into overall success

1. innovative strategy: want to be the first oes out with new products (1st in mkt place, but risky)

2. follower strategy: less risky, but you give up being first in the market 

Term
2. Idea generation
Definition

-customers

-employers

-distributors

-competitors

-vendors

-R&D

-consultants

* DONT eliminate any ideas; no negative comments or second guessing

Term
3. Idea screening
Definition

narrowing down and eliminating bad ideas

-legal and safety issues

-what could go wrong with this idea?

-includes concept testing: this is what we are thinking of, do you think its a good idea? How would you use it?

Term
4. Business analysis
Definition

Will the numbers work?

DEMAND

COST

SALES PROFITABILITY

*no development so cost is not very significant

Term
5. Development
Definition
  • creation of prototype
  • packaging, branding, labeling
  • final gov approvals if needed
  • detailed marketing strategy
  • **significant cost commitment
Term
6. Test marketing
Definition
  • give a limited group of consumers the product - advice?
    • food item: certain stores
    • electronic: certain parts of country 
  • sometimes done in scanner pannel - group of      consumers you have recruited to track behavior 
  • sometimes done in lab setting
Term
7. Commercialization
Definition

*lauched nationally

  • production
  • inventory buildup
  • distribution
  • advertising (consumer and trade)
Term
Why do products fail?
Definition

-NO guarantee in the new product development process

-#1 reason: No discernable benefits or differences; consumers and companies mental biases 

-2. Product quality problems

-3.Poor execution of other marketing mix elements 

Term

Diffusion 

 

when does it occur fastest?

Definition

The process by which the adoption of a new product spreads

Occurs faster when:

PRICE is NOT a factor, but it can effect trialability 

  1. complexity is lower
  2. compatibility is higher
  3. relative advantage is higher
  4. observability is higher
  5. transability is higher: samples?
Term
Product life cycle
Definition

model you can use to track sales growth over time

*not predictive, but you can see that your product has moved

*length of time varies, but basic shape remains the same

*best used for product categories and not specific brands - ex) hybrid automobile 

Term
Product life cycle stages:
Definition

1. intro stage

2. growth stage 

3. maturity stage

4. decline stage 

Term
intro stage
Definition
  • new product (new to world)
  • high cost to the market
  • profit - none or negative
  • generally no competitors
  • innovators buy (about 2.5% - younger, highly educated, not opinionated)
Term
strategies in intro stage
Definition

-primary demand for the product

-offer basic product NOT a lot of bells and whistles

-advertising should educate and inform or create buzz

-sampling and giveaways

-ex) peeble watch: syncs to phone

 

Term
Growth stage characteristics
Definition

-rapidly rising sales

-profits increase and often peak (b/c of no competition)

-some repeat buyers

-competition begins to enter

-early adopters buy (13.5%)

 

Term
Strategies in growth stage
Definition

-must create secondary (specific) demand because of more competition

-LOWER prices to gain market penetration

-expand distribution and advertising

ex) e-readers, tablets, smartphones

Term
Maturity stage characteristics
Definition

-sales reach a HIGH level, but growth SLOWS

-many competitors 

-market saturation

-profits are high as stage starts and then decline to to price pressures

-middle majority buys (68%) 


Term
68% middle majority of mature stage
Definition

34% early middle majority: deliberate and take time learning about products

 

34% late majority: skeptical, want to make sure its going to stay around 

Term
Strategies in mature stage
Definition

-look for new product innovations and modifications

-heavily promote brand with reminder advertising

-offer incentives: "buy one get one free"

-ex) restaurants: fast food: high sales, but growth rate is flat

Term
Decline stage characteristics
Definition

-sales drop off

-profits drop

-laggards buy (10%): fearful of new things, resistant of market to change 

 

Term
Strategies in decline stage
Definition

-reduce promotion 

-consolidate inventory to a few locations

-consider modifying or dropping product

ex) desk tops

Term
3 ways to extend time in product life cycle
Definition
  1. increase frequency of use: by same consumers - "now is the time!"
  2. increase number of users: expand into different target market with the same product
  3. find new uses: identify new applications of the product
Term
supply chain management
Definition
invisible operation management of all activities through which all materials are transformed into products and made available to final customers
Term
marketing channel
Definition
a set of interdependent organizations involved in the transfer of ownership as finished products move from the producer (mfg) to the consumer
Term
direct channels
Definition

mfg -> end user

best used when/for: complex, expensive, customized items

ex) cut-co knife: not sold in stores; customized

-many b2b products

-manufacturer wants control 

Term
indirect channel
Definition

mfg -> dist -> retailer -> end user 

mfg -> retailer -> end user

best used for low cost, std items (MOST consumer products)

Term

retailer 

 

merchant wholesaler

 

agent/broker

Definition

sells mainly to final customers

 

buys and takes title to goods from mfg; stores, ships, and sells to other businesses

 

tries to find customers and wholesalers, and connect them, does not legally take title 

Term
3 reasons to use intermediaries
Definition

1. develop skills in selling: customer knowledge, efficiency in handling large volumes

2. overcome discrepancies

3. provide contact efficiency: no intermediary = 5 x 5; with intermediary 5 + 5

Term

2. intermediaries overcome discrepancies 

-quantity

-assortment

-temporal

-spatial 

Definition

discrepancy of quantity: manufacturer produces in large volume, consumers buy in small volume

discrepancy of assortment: manufactures produce many of one item, consumers buy one of many items

temporal discrepancy: diff in when something is produced and when it is purchased

spatial discrepancy: difference between where something is produced and where it is purchased 

Term
Marketing functions performed by channel members
Definition

Transactional

 

Logistical 

 

Facilitating 

Term
Transactional marketing function
Definition

promotional: communicating about what's available

negotiation: price for textbook

risk taking 

Term
Logistical marketing function
Definition

distribution

sorting 

sorting

Term
Channel members: Facilitating marketing function
Definition

researching

financing: what form of payment?

 

Term
Importance of channel members
Definition

-functions must always be performed

-if no intermediaries, then must be performed by the manufacturer or consumer

-for std. low cost items, intermediaries reduce the cost to the final consumer 

Term
Trends in channel design (2)
Definition
  1. Disintermediation: elimination or reduction in # of levels
  2. increased use of electronic channels: any product that can be put in virtual form is now being used  ex) DVD players
Term
Logistics
Definition
management of the physical flow of raw materials, components, and products across the supply chain
Term
Objective of logistics
Definition

to give the customer (channel member or consumer) the needed level of customer service at the lowest cost

 

(NOT highest absolute service, its the level the customer wants)

Term
measurement: order cycle time
Definition

retailer: shorter order cycle time because you never have to have > than days worth of inventory

 

manufacturer: wants longer order cycle time 

Term
measurement: product availability
Definition

the more SKUs, the harder it is to get product availability 

  • some industries this is critical, such as hospitals 
Term
measurement: order acuracy
Definition
Do I get exactly what I order?
Term

measurement: flexibility 

 

Definition
normally delivered Thursday, but can I get it delivered Friday?
Term
measurement: information
Definition
can you provide me with accurate info on my order at any point in time?
Term
Logistical componets of the supply chain: sourcing and procurement
Definition

obtain needed supplies at the right quality at the lowest cost

 

-develop long term relationship with vendors 

Term

Logistical componets of the supply chain: production sceduling 


build to stock vs build to order

Definition

determining the method and timing of the manufactured mix of products 

 

build to stock: nothing built until actually ordered; less risk, but impatient customers

build to order: always there when customer needs it, but it will not sell if customer does not want it

Term

Logistical components of the supply chain: order processing


EDI


Vendor managed inventory 

Definition

a system for easily receiving orders and accurately and quickly filling them

 

EDI: electronic data interchange - way to communicate with vendors - ordering products online

VMI: share info with vendor and let vendor decide when you need a new shipment 

-ex) share sales data w/ vendor to ensure amt of stock 

Term

Logistical components of the supply chain: inventory control 


postponement

Definition

maintaining the correct amount of inventory 

goal: meet product availability standards while keeping costs low

 

postponement: keep inventory as generic as possible for as long as possible 

ex) corn and paint don't put labels until ordered 

Term

MRP 

 

DRP

Definition

material resource planning (supply side)

 

distribution resource planning (business/ordering side)

Term
dedicated storage vs random storage
Definition
you know where everything is vs no dedicated spot, but much harder to manage
Term

Transportation 

 

railroads

motor

pipelines

water

airways 

Definition

railroads: highest % of intercity freight movement in U.S.

motor: 2nd most % intercity 

pipelines: petroleum

water: moving comodoties such as grain or coal; consumer products from China

airways: high cost, low weight items such as jewlery and electronics 

Term
Trends in supply chain: Advanced computer technology (RFID)
Definition

-no line of sight (like a barcode), just have to be close

-common way of tracking products to know where they are

Term

Trends in supply chain: outsourcing of logisitcs functions (3PLs)

Definition
company that takes care of the logistics for you (receiving and shipping)
Term

Trends in supply chain: electronic distribution 

Definition
downloading music through computer
Term

1. Framework for ethical decision making

4 sets of norms

Definition

decision is based on

1. societal norms

2. company norms

3. general business norms

4. personal values and norms 

Term

Societal and cultural norms

 

AJC test

Definition

basic set of values for society

 

if you made news on front page, would you do this or not?

Term
Personal norms
Definition

How would you explain this to your mom?

 

how you feel about your decision 

Term
American Marketing Association
Definition

first, do no harm

 

foster trust and sonsumer confidence in marketing system

 

values of honesty, responsibility, fairness, respect, openness and citizenship 

Term
Difference between moral idealism and utilitarianism
Definition

Moral idealism means that if any bad occurs, then the action is unethical

-airbag example 

 

utilitarianism means you balance the good vs the bad

 

most people are somewhere in the middle 

Term

Levels of responsibility model

(corporate)

Definition

investors

stakeholders 

society 

Term
Profit (investors) responsibility
Definition

-companies are responsible only to stockholders and investors

-companies have just one duty: maximize profits within law

-probably no free samples, get best deals from vendors 

Term
stakeholder responsibility
Definition
-companies are responsibile to owners and to: customers, employees, and suppliers
Term
societal responsibility
Definition

-compaies are responsible to owners and stakeholders and to: 

society in general: cultural diversity, env stewardship, cause related marketing- supporting a non-profit or charitable organization 

"give a dollar to help.."

Term
Common ethical issues
Definition

planned obsolesence (designing product with short useful life)

-products that are unhealthy

-obligation to serve unsatisfied segments even if limited profit?

-what is a reasonable profit?

-how much "puffery" is okay? - teasing rather than being deceptive

Term

Book ch 10

  

consumer product vs business product 

Definition
satisfy indv wants (light bulbs, pencils) vs used to manufacture other goods and services, facilitate organization operations, or to resale to other customer
Term

Book ch 10

 

for shopping items: homogenerous and heterogeneous

Definition

homogeneous goods usually go for lowest price - washer, dryers, fridge

 

heterogeneous goods price, features, and quality vary a lot

Term

What is a product line?

 

And what are the benefits of a product line?

Definition

A product line is the DEPTH (vertical)

-advertising economies

-package uniformity

-standard components

-efficient sales and dist

-equivalent quality 

Term
When you want to diversify risk you inc ____, when you want to attact new buyers with different you inc ____
Definition
Term
planned obsolesence
Definition
making products so that they do not have a long useful life
Term

Product line extension

 

overextension 

 

contraction 

Definition

add to product line

 

can be overextended when products to not contribute to sales, slow moving products from short resources, obsolete because of new product entries in line or new products offered by competitors 

Term

manufacutures brand

 

private brand

 

captive brand

Definition

ex) Kodak, fruit of the loom

 

Ex) kroger brand

 

ex) "greenwise" - w/o evidence of retailer affiliation 

Term
Trademark protection is for ___ yrs, if not used after __ years, then considered abandoned
Definition
10; 2
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