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Products

answer

-need satisfying offering of a firm -"product" = potential customer satisfaction or benefits

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Quality

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-product's ability to satisfy a customer's needs or requirements -focuses on how a customer views a product will fit some purpose

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Product Assortment

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-Set of all product lines and individual products that a firm sells

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Product Line

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-set of individual products that are closely related -Sara Lee has many product lines- beverges, lunch... -Enterprise only has one-- vehicle rental

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Individual Product

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-Particular product within a product line -differentiated by brand, level of service offered, price ex: each size and flavor of a brand of soap is an individual product

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Branding

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-use of a name, term, symbol, or design -- a combination of these to identify a product

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What can good brands do?

answer

-reduce marketer's selling time and effort -improve the company's image (speeding acceptance of new products marketed under that same name)

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Brand Name

answer

-word, letter or group of words and letters ex: America Online (AOL)

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Trademark

answer

-includes only those words, symbols or marks that are legally registered for use by a single company

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Service Mark

answer

-same as trademark except it refers to a service offering

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Brand Familiarity

answer

-how well customers recognize and accept a company's brand -degree of brand familiarity affects the planning of marketing mix especially where the product should be offered and what promotion is needed

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5 Levels of Brand Familiarity for Strategy Planning

answer

1. Brand Rejection 2. Brand Non-Recognition 3. Brand Recognition 4. Brand Preference 5. Brand insistence

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Brand Rejection

answer

-Potential customers won't buy a brand unless its image is changed -Suggest change in product or a shift to target customers who have a better image of the brand, overcoming negative image is difficult and costly -big concern for service oriented business because it is hard to control the quality of service

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Brand Non-Recognition

answer

-final customers don't recognize a brand at all-- even though intermediaries may use the brand name for identification and inventory control -inexpensive items including school supplies or plastic dinnerware

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Brand Recognition

answer

-customers remember the brand -big advantage if there are many "nothing" brands on the market - aided awareness -- with a little big of a push or reminder a customer remembers the brand ex: seeing the symbol on a box

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Brand Preference

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-target customers usually choose the brand over other brands because of a habit or favorable past

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Brand Insistence

answer

-customers insist on a firm's branded product and are willing to search for it

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Brand Equity

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-value of a brand's overall strength in the market ex: likely to be higher if many satisfied customers insist on buying the brand and if retailers are eager to stock it-- almost guarantees ongoing profits

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Brand Equity Encompasses

answer

1. Brand elements--- trademark able devices that service to identify and differential the brand such as a brand name, logo or character 2. Brand image-- the perceptions and beliefs held by customers as reflected in teh associations held in customer memory 3.Brand Knowledge-- all the thoughts and feelings, images and experiences that are associated with the brand

question

Lanham Act

answer

-spells out what kinds of marks can be protected and the exact method of protecting them . Applies to goods shipped in interstate or foreign commerce -doesn't force registation, but registering under the Lanham Act is often a first step toward protecting a trademark to be used in international markets

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Four Branding Options

answer

1. Family Brand 2. Licensed Brand 3. Individual Brand 4. Generic Products

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Family Brand

answer

- same brand name for several products or individual brands for each product -Goodwill attached to one or two products may help the others and money spent to promote brand name benefits more than one product, cutting promotion costs -extend benefits of flagship ex: Sear's Kenmore appliances -stimulus generalization

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Licensed Brand

answer

-well known brand that sellers pay a fee to use -increase exposure -ex: sunkist brand name has been licensed to companies for use on products ex: Teddy Bear with Coke Scarf

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Individual Brands

answer

-separate brand names for each product-- when it's important for the products to each have separate identities, as when products vary in product or type -separate from flagship - products are really different -individual brands avoid confusion -some firms use this with similar products to make segmentation and positioning efforts easier ex: Coke makes Dasani

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Generic Products

answer

-products with no brand at all other than the identification of their contents and the manufacturer or intermediary -use excess manufacturing capacity -offer lower prices, common in under developed nations ex: Cola

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Who should do branding?

answer

-manufacturer brands-- brands created by producers because the brand is promoted all across the country -- national brands -attracts business to stores -service oriented firms promote their brands similarly: McDonalds, Bank of America ex: Coke Dealer brands-- private brands, are brands created/owned by intermediaries -creates higher margin -traditionally these were lower quality with lower price -Advantages in the battle of brands: -large retail chains, able to arrange reliable sources of supply at low cost - give the dealer brand special shelf position - strong dealer brands give an intermediary leverage in negotiations with the manufacturer brand ex: Sam's Club Cola

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Battle of Brands

answer

-competition between dealer and manufacturing brands -- question on whose brands will be more popular

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Who is in control in the battle of the brands?

answer

-manufacturing brands used to be completely in control, dealer brands are slowly gaining an upper hand -economic downturn caused more consumers to try dealer brands

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Packaging

answer

-involves promoting, protecting and enhancing th e product

question

Ethical Issues with Packaging

answer

-display packaging -true to size

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Environmental issues with Packaging

answer

-recyclable materials -biodegradable materials -compact packaging

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what does Packaging do for the Product?

answer

-enhance product (ex: soft grip on bottles) -send message (ex: energizer bunny) -lower distribution costs -UPC codes speed handling

question

Universal Product Code (UPC)

answer

-Identifies each product with marks readable by electronic scanners -computer matches code to the product and price -speeds check out time -reduces the need to mark a price on every item

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Federal Fair Packaging and Labeling Act

answer

-requires that goods be clearly labeled in easy to understand terms to give consumers more info -calls industry to try to reduce the confusing number of package sizes and make labels more usefu l -set mandatory labeling requirements -allowed federal agencies to set packaging regulations in specific industries

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Warranty

answer

-explains what the seller promises about its product -area-- where legal environment -may improve marketing mix -puts promises in writing -services guarantees as a mean of attracting and keeping customers

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Magnuson Moss Act

answer

-says that producers must provide a clearly written warranty if they choose to offer any warranty -warranty doens't have to be strong but clear and definite -must be available for inspection

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Consumer Products

answer

-products meant for final customer

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Convenience Products

answer

-products a consumer needs but isn't willing to spend much time or effort shopping for -bought often, require little

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Staples

answer

-products that are bought often, routinely, and without much thought -branding helps -ex: breakfast cereal, canned soup

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Impulse Products

answer

-products bought quickly as unplanned purchases -- because of a strongly felt need -store placement is key -items a customer hadn't planned ot buy, decides to buy on sight may have bought the same way many times before, and wants right now -if buyer doens't see an impulse product at the right time the sale may be lost

question

Emergency Products

answer

-Products that are purchased immediately when the need is great -price is not significant -customer doesn't have time to shop around when a traffic accident occurs or thunderstorm begins

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Shopping Products

answer

-products a customer feels are worth time and effort to compare with competing products

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Homogenous Shopping Products

answer

-shopping products the customer sees as basically the same and wants the lowest price -considers brands but price is the decider -firms may try to promote and emphasize product differences to avoid head to head price compeittion ex: certain TVs or washing machines

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Heterogeneous Shopping Products

answer

-customer sees as different and wants to inspect for quality and suitability -often seeks help from salesperson -quality and style matter more than price -brand may be less important ex: furniture

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Speciality Products

answer

-consumer products that a consumer really wants and makes a special effort to find -doesn't mean comparing-- buyer wants that special product and is willing to search for it -customer's willingness to search -price sensitivity is low

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Unsought Products

answer

-products that potential customers don't yet want or know they can buy -don't search for and probably won't buy

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New Unsought Products

answer

-products offering really new ideas that potential customers don't know about yet -informative promotion can help customers to accept product

question

Regularly Unsought Products

answer

-products that stay unsought but not unbought forever -may be a need but potential customer's arent' motivated to satisfy

question

Product Life Cycle

answer

-describes the stages a really new product idea goes through from beginning to end 4 stages: 1. Market Introduction 2. Market Growth 3. Market Maturity 4. Sales Decline

question

Market Introduction

answer

-sales are low as a new idea it is first introduced to a market -customers aren't looking for the product -informative promotion necessary -companies experience losses because they spend so much money on the four P's

question

Market Growth

answer

-industry sales grow fast-- but industry profits rise and then start following -Innovator begins to make profits as more and more customers buy -competitors see opportunity and enter market -New entries result in product variety -time of biggest profits for the industry -time of rapid sales and earnings growth for companies with effective strategies -toward end of stage when industry profits begin to decline as competition and customer price sensitivity increase

question

Market Maturity

answer

-occurs when the industry sales level off and competition gets tougher -aggressive competitors have entered the race for profits -industry profits go down throughout the market maturity stage because promotion costs rise -less efficient firms drop out here because they can't compete -new firms may still enter --increasing competition more -Persuasive Promotion is more important ex: US market for cereals

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Sales Decline

answer

-new products replace the old -price competition from dying products becomes more vigorous-- but firms with strong brands may make profits until the end because they have successfully differentiated their products

question

Fad

answer

-an idea that is fashionable only to certain groups who are enthusiastic about it -more short lived than regular fashion

question

New Product

answer

-one that is new in any way for the company concerned -a fresh idea can be turned into a new product -variation in existing product -firm can only call its product new for a limited time-- 6 months

question

Federal Trade Commission (FTC)

answer

-Federal gov't agency that policies antimonopoly laws -called new, the FTC says a product must be entirely new or changed "functionally significant or substantial respect"

question

Consumer Product Safety Act

answer

-set up the consumer product safety commission to encourage safety in product design and better quality control

question

Product Liability

answer

-means the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products -serious matter --- may exceed company's total assets

question

Concept Testing

answer

-getting reactions from customers about how well a new product idea fits their needs -uses market research-- ranging from focus groups to surveys of potential customers

question

Product Managers / Brand Managers

answer

-manage specific products-- often talking over the jobs formerly handled by an advertising manager -help lead product variety

question

Critical Components needed to guide new product development

answer

1. Idea Generation-ideas form: customers, marketing research, competitors, other markets 2. Screening -- strengths and Weaknesses fit with objectives, Market trends, rough ROI estimate 3. Idea Evaluation -- concept testing, reactions from customers 4. Development -- R+D develop model, test marketing mix 5.Commercialization- roll out in select markets, finalize the product, Final ROI estimate

question

Place

answer

-making goods and services available in the right quantities and locations, when customers want them

question

Channel Distribution

answer

-any series of firms or individuals who participate in teh flow of products from producer to final user or consumer

question

Direct Marketing

answer

-direct communication between a seller and an individual customer using a promotion method other than face to face personal selling

question

Discrepancy of Quantity

answer

-different between the quantity of products it is economical to produce and the quantity the customers want ex: gold ball manufacturers can produce large amounts at a time, but most golfers only need a few at once -need for wholesaler and retailers to adjust discrepancies

question

Discrepancy of assortment

answer

-difference between the lines a typical producer makes and the assortment final consumers/users want -most golfers want more than just golf balls ex: golf bag -need for wholesaler and retailers to adjust discrepanicies

question

Channel Specialists adjust discrepancies with Regrouping activities

answer

Adjust quantity discrepancies with -accumulating -bulk breaking

question

Accumulating

answer

-collecting products from any small producers

question

Bulk Breaking

answer

-dividing larger quantities into smaller quantities as products get closer to the final market -may involve several levels in the channel

question

Channel Specialists adjust discrepancies with regrouping activities:

answer

-adjusting assortment discrepancies with -sorting -assorting

question

Sorting

answer

-separating products into grades and qualities desired by different target markets

question

Assorting

answer

-putting together a variety of products to give a target market what it wants -usually done somewhere close to consumer in the channel

question

Channel Captain

answer

-manages the members of the channel -a manager who helps direct the activities of the whole channel -tries to develop cooperation and avoid or resolve conflicts -may be either a producer or middleman-- big retail chains are increasingly taking this role -Guides the whole channel to compete better with other channels

question

Vertical Marketing Systems

answer

-channel systems in which the whole channel focuses on the same target market at the end of the channel -make sense and are growing because if the final customer doesn't buy the product the whole channel suffers

question

3 types of vertical marketing systems

answer

1. Corporate channel systems 2. Vertical Integration 3. Contractual channel systems

question

Corporate Channel Systems

answer

-corporate ownership all along the channel -complete corporation -ownership by one company ex: Sherwin Williams

question

Vertical Integration

answer

-acquiring firms at different levels of channel activity (corporate channel systems may develop by this) -Potential Advantages: stable sources of suppliers, better control of distribution and quality, greater buying power and lower executive overhead -as long as discrepancies aren't too great at each level in the channel. -vertical integration can be profitable

question

Contractual Channel Systems

answer

-channel members agree by contract to cooperate with each other -fairly good/good cooperation -control maintained by contracts ex: McDonald's

question

Ideal Market Exposure

answer

-makes a product available widely enought to satisfy target customer's needs but not exceed them

question

Intensive Distribution

answer

-selling a product through all responsible and suitable wholesaler or retailers who will stock or sell the product ex: Coke

question

Selective Distribution

answer

-selling through only those intermediaries who will give the product special attention ex: not everywhere -- Trek Bikes

question

Exclusive distribution

answer

-selling through only one intermediary in a particular geographic area ex: usually more expensive products -- Jaguars

question

Multichannel Distribution

answer

-occurs when a producer uses several competing channels to reach the same target market-- maybe using several intermediaries in addition to selling directly -becoming more common -Not just using a store -can use internet and store

question

Reverse Channels

answer

-channels used to retrieve products that customers no longer want -to companies, car films

question

Licensing

answer

-selling the right to use some process, trademark, patent or other right for a fee or royalty -licensee takes most of th risk and does most of marketing strategy planning for the markets it is licensed to serve

question

Logistics

answer

-the transporting storing and handling of tgoods in ways that match target customers' needs with a firm's marketing mix-- both within individual firms and along a channel of distribution

question

Physical Distribution

answer

-is another common name for logistics

question

Customer Service Level

answer

-how rapidly and dependably a firm can deliver what the customers want

question

Physical Distribution Concept

answer

-all transporting, storing, and product handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the costs of distribution for a given customer service level -coordinated as one system to minimize the total cost of distribution for a given customer service level -requires manager to decide what aspects of service are most important to customers -focusing on individual costs may increase total costs-- since a system is involved

question

Total Cost Approach

answer

-involves evaluating each possible PD system and identifying all of the costs of each alternative -uses the tools of cost accounting and economics -costs that otherwise might be ignored--like inventory carrying costs-- are considered

question

Supply Chain

answer

-complete set of firms and facilities and logistics activities involved in procuring materials, tranforming them into intermediate or finished products and distributing them to customers

question

Goal of supply chain

answer

-right product to the right customer in the right place at the right time

question

Electronic Data interchange

answer

-approach that puts info in a standardized format easily shared between different computer systems

question

Transporting

answer

-marketing function of moving goods -helps achieve economies of sale in production -costs limit the target markets a manager can serve -gov't plays a role in development of country's transport system

question

Containerization

answer

-grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination -protects the products and simplifies handling during shipment

question

Piggyback service

answer

-loading truck trailers -- or flatbed trailers carrying containers on railcars to provide both speed and flexibility

question

Storing

answer

-marketing function of holding goods so they're available when they're needed

question

Inventory

answer

-amount of goods being stored -maintaining right level is difficult when it is hard to foresee demand

question

Private Warehouse

answer

-storing facilities owned or leased by companies for their own use. -most manufacturers, wholesalers and retailers have some storing facilities either in their main buildings or in a separate location -use when large volume of goods must be stored -no fixed investment, low unit costs, low control, not convenient for all product lines

question

Public Warehouse

answer

-independent storing facilities -can provide all the services that a company's own warehouse can provide -isn't pressing need for constant space -high fixed investment, high unit cost if volume is low, high control, highly adequate for product line, low flexibility as fixed costs have already been committed

question

Distribution Center

answer

-special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs -used by firms at all channel levels -speeds bulk breaking to reduce inventory carrying costs -helps centralize control and coordination of physical distribution activities -technology is key to making distribution centers efficient -some stores skip this and ship products directly from where they are manufactured to retail stores

question

Retailing

answer

all of the activities involved in the sale of products to final consumers -must develop their own strategy to survive -wholesaling and retailing are always changing -from large stores to individual merchants -products and services -crucial to consumers in every macro marketing system

question

Specialty Shop

answer

-a type of conventional limited-- line -- store-- usually small and has a distinct personality -sell special types of shopping products, such as high quality sporting goods, exclusive clothing, baked goods or antiques -aim at carefully defined target market by offering unique product assortment, knowledgeable clerks -simplifies buying, speeds turnover, and cuts costs due to obsolescence -will be apart of retailing scene as long as customers have varied tastes and the money to satisify them

question

Department Stores

answer

-larger stores organized into many separate departments and offer many product lines -each department is like a separate limited line store and handles a wide variety of a shopping product -usually strong in customer services -major force in large cities

question

Mass-Merchandising Concept

answer

-retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets -applies to many retailers including open stores and online shopping

question

Supermarkets

answer

-large stores specializing in groceries with self-service and wide ssortments -to be considered this a store must have a specific annual sale of 2 mill -planned max efficiency

question

Discount Stores

answer

-retailers focusing on discount prices Marshalls

question

Mass-Merchandisers

answer

-large self service stores with many departments that emphasize "soft goods" but still follow discount houses emphasis on lower margins to get fast turnover ex: Walmart--- often lots of space and little customer service

question

Supercenters

answer

-very large stores that try to carry not only food and drug items but all the goods and services that customers purchase routinely -trying to meet all the cuustomers routine needs at a low price -Meijer

question

Convenience (food) stores

answer

-conveience oriented variation of the conventional limited line food stores -instead of expanidng their assortments, they limit stock to pickup or fill in items like break, milk beer and eat on the go snacks many sell gas too

question

Automatic Vending

answer

-selling and delivering products through vending machines -account for 1.5% of US retail sales -consumers like this convenience

question

Wheel of retailing theory

answer

-new types of retailers enter the market as low status, low margin, low price operators and then if successful evolve into more conventional retailers offering more services with higher operating costs and hihger prices --threatened by low status low margin low price retailers that are new on the market -department stores supermarkets and mass merchandisers went through this cycle as well as some internet sellers -doesn't explain all major retailing developments

question

Scrambled Merchandising

answer

-carrying any product lines they think they can sell profitably -many modern retailers moving towards this -higher profits ex: Walgreens known as a drug store but offers bathroom products, make up -creates one stop shopping

question

Corporate Chain

answer

-a film that owns and manages more than on store and often it's many -chains have grown rapidly and now account for about half of all retail stores -use central buying for different stores -take advantage of quantity discounts and develop

question

Franchise Operation

answer

-franchisor develops a good marketing strategy, ad the retail franchise holders carlry out the strategy in their own units -each franchise holder benefits from its relationsihp with the larger company and buying power, promotion and image -usually sign contract to pay fees and commission -1/3 of all retail sales are within franchise holders

question

Wholesalers

answer

-firms whose main function is providing wholesaling activities -concerned with activities of those persons or establishments that sell to retailers and other merchants or to industrial, institutional, and commercial users, but that do not sell in large amounts to final consumers -

question

Wholesaling activities

answer

-basic marketing functions: gathering and providing info, buying and selling, grading, storing transporting financing , risk taking

question

Merchant Wholesalers

answer

-own the products they sell -often specialize by certain types of products or customers -general merchandise wholesalers, single line or general line wholesalers, specialty wholesalers ex: Fastenal owns itle to the fasteneres for some period before selling it to customers

question

Drop Shipper

answer

-don't physically take the good -doesn't have inventory or handle shipping ex: Amazon

question

Rack Jobbers

answer

-understand the market and what they want ex: Fresh having "happy 21st Bday"

question

Agent Wholesalers

answer

-wholesalers who do not own the products they sell -main purpose is to help in buying and selling -Auction companies, brokers, manufacturers' agents selling agents -agent wholesalers normally specialize by customer type and product or product line -operate at low costs -role rapidly being transformed by internet -common in international trade

question

Show Rooms

answer

-testing the product out in the store then buying it online or somewhere else

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