Principles of Marketing: final exam (spring 2017)

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Define product.
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A good, service, or idea received in an exchange. Either tangible or intangible.
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Define consumer products.
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Products purchased to satisfy personal or family needs.
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Define business products.
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Products bought to use in an organization’s operations.
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What are the classifications of consumer products?
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Convenience. Shopping. Specialty. Unsought.
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Define convenience products.
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Relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort.
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What are the characteristics of a convenience product?
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Marketed through many retail outlets. Relatively low per-unit gross margins. Little promotional effort at retail level. Packaging is an important marketing mix element.
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Define shopping products.
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Items for which buyers are willing to expend considerable effort in planning and making purchases.
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What are the characteristics of a shopping product?
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Expected to last a long time. Less frequently purchased. Don’t have brand loyalty appeal. Require fewer retail outlets. Inventory turnover is lower. Gross margins are higher. More amenable to personal selling.
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Define specialty products.
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Items with unique characteristics that buyers are willing to expend considerable effort to obtain.
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What are the characteristics of a specialty product?
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Pre-selected by the consumer. Have no close substitutes or alternatives. Available in a limited number of retail outlets. Purchased infrequently and represent a significant and expensive investment. High gross margins. Low inventory turnover.
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Define unsought products.
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Products purchased to solve a sudden problem, products of which the customers are unaware, and products that people do not necessarily think about buying.
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What are the characteristics of unsought products?
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Speed and problem resolution of the utmost importance. Price and other features not considered. No consideration of substitutes or alternatives. Purchased infrequently.
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Define product item.
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A specific version of a product.
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Define product line.
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A group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations.
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Define product mix.
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The total group of products that an organization makes available to customers.
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Define width of product mix.
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Number of product lines a company offers.
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Define depth of product mix.
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Average number of different products in each product line.
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Define product life cycle.
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The progression of a product through four stages: introduction, growth, maturity, and decline.
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What happens during the introduction stage of the product life cycle?
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Product is introduced to the marketplace.
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What are the characteristics of the introduction stage of the product life cycle?
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Sales start at 0 and profits are negative.
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What happens during the growth stage of the product life cycle?
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Sales rise rapidly and profits reach a peak, then start to decline.
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What are the characteristics of the growth stage of the product life cycle?
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More competitors. Product pricing is aggressive. Brand loyalty is important. Gaps in market coverage are filled. Production efficiencies lower costs.
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What happens during the maturity stage of the product life cycle?
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Sales curve peak and starts to decline and profits continue to fall.
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What are the characteristics of the maturity stage of the product life cycle?
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Intense competition. Emphasis on improvements and differences in competitors’ products. Weaker competitors exit market. Advertising and dealer-oriented promotions dominate. Distribution sometimes expands globally.
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What happens during the decline stage of the product life cycle?
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Sales fall rapidly.
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What are the characteristics of the decline stage of the product life cycle?
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Pruning items from the product line. Cutting promotion expenditures. Eliminating marginal distributors. Planning to phase out product.
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What are the steps of the product adoption process?
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Awareness. Interest. Evaluation. Trial. Adoption.
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What are the categories of product adopters?
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Innovators. Early adopters. Early majority. Late majority. Laggards.
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Define innovators of the product adoption process.
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First adopters of new products.
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Define early adopters of the product adoption process.
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Careful choosers of new products.
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Define early majority of the product adoption process.
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Those adopting new products just before the average person.
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Define late majority of the product adoption process.
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Skeptics who adopt new products when they feel it is necessary.
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Define laggards of the product adoption process.
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The last adopters, who distrust new products.
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Define line extension.
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Development of a product that is closely related to existing products in the line but meets different customer needs.
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What are characteristics of a line extension?
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Less expensive, low-risk alternative. May focus on the same or a new segment. Can be used to counter competing products.
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Define product modifications.
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A change in one or more characteristics of the product and the elimination of the original product from the product line.
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What are characteristics of product modifications?
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Product must be modifiable. Customer must be able to perceive modification has been made. Modified product more closely satisfies customers’ needs.
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What are the types of product modifications?
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Quality. Functional. Aesthetic.
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Define quality modification.
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Changes in material or production processes related to a product’s dependability and durability.
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Define functional modification.
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Changes affecting a product’s versatility, effectiveness, convenience, or safety. Usually requiring a redesign of the product.
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Define aesthetic modification.
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Changes made to the sensory appeal of a product, such as altering taste, texture, sound, smell, or appearance.
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Define product differentiation.
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Creating and designing products so that customers perceive them as different from competing products.
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What are some ways to differentiate your product?
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Quality. Design. Support services. Branding.
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Define product quality.
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The overall characteristics of a product that allow it to perform as expected in satisfying customer needs.
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Define product design.
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How a product is conceived, planned, and produced. Good design provides strong advantage.
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Define styling.
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Physical appearance of a product.
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Define product features.
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Specific design characteristics that allow a product to perform certain tasks.
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Define product support services.
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Human or mechanical efforts or activities that add value to a product. A competitive advantage when all other product features are equally matched by competitors.
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Define product positioning.
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Creating and maintaining a certain concept of a product in customers’ minds.
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Define repositioning a product.
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Adjusting a product’s present position can strengthen/increase its market share and profitability.
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Define product deletion.
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The process of eliminating a product from the product mix.
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Define brand.
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An identifying name, term, design, or symbol. One item, family of items, or all items of a seller.
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Define brand name.
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The part of a brand that can be spoken. Words, letters, numbers.
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Define brand mark.
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The part of a brand not made up of words. Symbols or designs.
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Define brand loyalty.
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A customer’s favorable attitude toward a specific brand.
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What are the different levels of brand loyalty?
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Brand recognition. Brand preference. Brand insistence.
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Define brand recognition.
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A customer’s awareness that a brand exists and is an alternative purchase.
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Define brand preference.
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A customer prefers one brand over competitive offerings.
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Define brand insistence.
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A customer strongly prefers a specific brand and will accept no substitute.
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Define co-branding.
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Using two+ brands on one product to capitalize on the brand equity (customer confidence/trust) of multiple brands.
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Define brand licensing.
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A company permits another organization to use its brand on other products for a licensing fee. More royalty fee based.
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What are the four components of brand equity?
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Perceived brand quality. Brand name awareness. Brand loyalty. Brand associations.
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What are the three types of brand policies?
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Individual. Family. Brand-extension.
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Define individual brand policy.
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Naming each product differently. Avoids stigmatizing all products due to a failed one.
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Define family brand policy.
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Brand all of a firm’s products with the same name. Promotion of one item promotes them all.
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Define brand-extension brand policy.
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Using an existing brand name for an improved or new product. Provides support for new products through established brand name and image.
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What are the two types of brand-extension branding?
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Co-branding. Brand licensing.
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What are the types of brands?
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Manufacturer. Private distributor. Generic.
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Define manufacturer brands.
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Brands initiated by producers.
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Define private distributor brands.
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Brands initiated and owned by resellers. Dealer brands, private brands, store brands.
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Define generic brands.
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Brands indicating only the product category.
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What is the value of branding for consumers?
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Helps speed purchases by identifying specific preferred products. Provides a form of self-expression and status. Evaluates product quality to reduce the risk of purchase.
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What is the value of branding for marketers?
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Identifies and differentiates a firm’s products from competing products. Helps in introduction of new products. Facilitates promotion of all same-brand products. Fosters the development of brand loyalty. Can create valuable intangible assets.

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