Mktg 101 Notes 2nm

Chapter 1 Marketing- process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives Consumer- the ultimate of a good or service 1. Marketing concept- a management orientation that focuses on identifying and satisfying consumer needs to ensure the organization's long-term profitability 1. Need- recognition of any difference between a consumer's actual state and some ideal or desired state 1. Want- the desire to satisfy needs in specific ways that are culturally and socially influenced 1. Benefit- the outcome sought by a customer that motivates buying behavior--that satisfies a need or want 1. Market- all of the customers and potential customers who share a common need that can be satisfied by a specific product, who have the resources to exchange for it, who are willing to make the exchange, and who have the authority to make the exchange 1. Value proposition- a marketplace offering that fairly and accurately sums up the value that will be realized if the product or service is purchased 1. Business-to-business marketing- marketing of those goods and services that business and organizational customers need to produce other goods and services, for resale or to their operations 1. Industrial goods- goods bought by individuals or organizations for further processing or for use in doing business 1. Marketing mix- a combination of the product itself, the price of the product, the place where it is made available, and the activities tht introduce it to consumers that creates a desired response among a set of predefined consumers a. Four P's-- product, price, promotion, place 1. Promotion- the coordination of a marketer's marketing communications efforts to influence attitudes or behavior; the coordination of efforts by a marketer to inform or persuade consumers of organizations about goods, services, or ideas 1. Place- the availability of the product to the customer at the desired time and location 1. Customer relationship management (CRM)- a philosophy that sees marketing as a process of building long-term relationships with customers to keep them satisfied and to keep them coming back 1. Marketing plan- a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy 1. Mass market- all possible customers in a market, regardless of the differences in their specific needs and wants

1. Market segment- a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market 1. Target market- the market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts Market position- the way in which the target market perceives the product in comparison to competitors' brands Product orientation- management philosophy that emphasizes the most efficient ways to produce and distribute products Selling orientation- a managerial view of marketing as a sales function, or a way to move products out of warehouses to reduce inventory Consumer orientation- a management philosophy that focuses on ways to satisfy customers' needs and wants New Era orientation- a management philosophy in which marketing means a devotion to excellence in deg and producing products that benefit the customer plus the firm's employees, shareholders, and communities Utility- the usefulness or benefit consumers receive from a product Form utility- benefit marketing provides by transforming raw materials into finished products Place utility- benefit marketing provides by making products available where customers want them Time utility- storing products until they are needed Possession utility- allowing consumer to own, use ,and enjoy the product

Chapter 2 Business plan- a plan that includes the decisions that guide the entire organization Marketing plan- a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing stretegy Strategic planning- a managerial decision process that matches an organization's resources and capabilities to its market opportunities for longterm growth and survival Strategic business units (SBUs)- individual units within the firm that operates like separate businesses, with each having its own mission, business objectives, resources, managers, and competitors Tactical (functional) planning- a decision process that concentrates on developing detailed plans for strategies and tactics for the short term that an organization's long-term strategic plan Operational planning- a decision process that focuses on developing detailed plans for day-to-day activities that carry out an organization's tactical plans Cross-functional planning- an approach to tactical planning in which managers work together in developing tactical plans for each functional area in the firm so that each plan considers the objectives of the other areas Mission statement- a formal statement in an organization's strategic plan that describes the overall purpose of the organization and what it intends to achieve in of its customers, products, and resources To develop strategic plans, follow three steps Develop a mission or vision Establish long-term goals or objectives Allocate resources to different SBUs to maximize growth and profits Business Portfolio- the group of different products or brands owned by an organization and characterized by different income-generating and growth capabilities Portfolio analysis- a management tool for evaluating a firm's business mix and assessing the potential of an organization's strategic business units BCG growth- market share matrix- a portfolio analysis model developed by the Boston Consulting Group that assesses the potential of successful products to generate cash that a firm can then use to invest in new products STARS- SBUs with products that have dominant market share in high-growth markets, command the firm's attention and grab the lion's share of the money CASH COWS- dominant market share in low-growth potential market, firms usually milk cash cows of their profits to fund the growth of other products in a portfolio QUESTION MARKS- problem children, products with low market shares in fast-growth markets DOGS- a product nobody wants, they have small share of a slowgrowth market, when possible, large firms may sell off their dogs to smaller firms that may be able to nurture them

SWOT analysis- an analysis of an organization's Strengths and Weaknesses and the Opportunities and Threats in its external environment Competitive advantage- the ability of a firm to outperform the competition, thereby providing customers with a benefit the competition can't Distinctive competency- a superior capability of a firm in comparison to its direct competitors Differential benefit- properties of products that set them apart from competitors' products by providing unique customer benefits Growth strategies Market penetration- growth strategies designed to increase sales of existing products to current customers, nons, and s of competitive brands in served markets Market development- growth strategies that introduce existing products to new markets Product development- growth strategies that focus on selling new products in served markets Diversification- growth strategies that emphasize both new products and new markets Situation analysis- the first part of a marketing plan that provides a thorough description of the firm's current situation including its internal and external environments Marketing audit- a comprehensive review of a firm's marketing function

Chapter 6 Consumer behavior- the process involved when individuals or groups select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires Problem recognition- the process that occurs whenever the consumer sees a significant difference between his current state of affairs and some desired or ideal state; this recognition initiates the decision-making process Information search- the process whereby a consumer searches for appropriate information to make a reasonable decision Evaluation of alternatives Evaluative criteria- the dimensions used by consumers to compare competing product alternatives (power, style, safety, etc) Product choice Heuristics- a mental rule of thumb that leads to a speedy decision by simplifying the process Brand loyalty- a pattern of repeat product purchases accompanied by an underlying positive attitude toward the brand, which is based on the belief that the brand makes products superior to its competition Country of origin Postpurchase Evaluation Consumer satisfaction/dissatisfaction (CS/D)- the overall feelings or attitude How much effort put into these decisions depends on Involvement- the relative importance of perceived consequences of the purchase Perceived risk- the belief that choice of a product has potentially negative consequences. Internal Influences on consumer decisions Perception- the process by which people select, organize, and interpret information Exposure- i.e. billboards Perceptual selection- pay attention to some stimuli but not others Interpretation- associations Motivation- an internal state that drives us to satisfy needs by activation goaloriented behavior Hierarchy of needs- categorizes motives according to five levels of importance, the more basic needs being on the bottom of the hierarchy and the higher needs at the top Learning- a relatively permanent change in behavior caused by info or experience Behavioral learning theories- focus on how consumer behavior is changed by external events or stimuli Classical conditioning- pairing stimuli Operant conditioning- occurs as the result of rewards or punishments Stimulus generalization- behavior caused by a reaction to one stimulus occurs in the presence of other, similar stimuli

Cognitive learning theory- theory of learning that stresses the importance of internal mental processes and that views people as problem solvers who actively use information from the world around them to master their environment Attitudes- a learned predisposition to respond favorably or unfavorably to stimuli based on relatively enduring evaluations of people, objects, and issues Personality- the psychological characteristics that consistently influence the way a person responds to situations in his or her environment Self-concept- an individual's self-image that is composed of a mixture of beliefs, observations, and feelings about personal attributes Age groups Family life cycle- a means of characterizing consumers within a family structure based on different stages through which family as they grow older Lifestyles- the pattern of living that determines how people choose to spend their time, money, and energy and that reflects their values, tastes, and preferences Psychographics- the use of psychological, sociological, and anthropological factors to construct market segments Situational influences on consumer decisions The physical environment Time Social influences on consumer decisions Culture- the values, beliefs, customs, and tastes valued by a group of people Subcultures- a group within a society whose share a distinctive set of beliefs, characteristics, or common experiences Social class- the overall rank or social stnading of groups of people within a society according to the value assigned to such factors as family background, education, occupation, and income Group behavior Reference groups- an actual or imaginary individual or group that has a significant effect on an individual's evaluations, aspirations, or behavior Conformity- a chance in beliefs or actions as a reaction to group pressure Sex roles- society's expectations for men and women Opinion leaders- a person who is frequently able to influence others' attitudes or behaviors by virtue of his or her active interest and expertise in one or more product categories Peer to Peer E-Commerce Consumer to consumer (C2C) e-commerce- communications and pruchases that occur among individuals without directly involving the manufacturer or retailer Multi- dungeons Rooms, rings, and lists Boards Auction sites

Product rating sites Protest sites

Chapter 7 Business Markets: Buying a.nd Selling When Stakes Are High Business to business marketing- marketing of those goods and services that business and organizational customers need to produce other goods and services for resale or to their operations (aka Organizational markets) Characteristics that make a difference in business markets Multiple buyers Number of Customers Size of purchases Geographic concentration Business to business demand Derived demand- demand for business or organizational products derived from demand for consumer goods or services Demand for education-->derived demand for textbooks-->paper-->pulp-->forestry products Inelastic demand- demand in which changes in price have little or no effect on the amount demanded Fluctuating demand Acceleration principle (multiplier effect)- a marketing phenomenon in which a small percentage change in consumer demand can create a large percentage change in business to business demand (i.e. air travel) Life expectancy of products t demand- demand for two or more goods that are used together to create a product (i.e. automobiles - tires, batteries, etc) Classifying business-to-business markets- customers: Producers- the individuals or organizations that purchase products for use in the production of other goods and services Resellers- buy finished goods for the purpose of reselling, renting, or leasing to others to make a profit and to maintain their business operations Government marketsCompetitive bids- business buying process in which two or more suppliers submit proposals for a proposed purchase and the firm providing the better offer gets the bid Not-for-profit institutionsNorth American Industry Classification System (NAICS)- numerical coding system that the US, Canada, and Mexico use to classify firms into detailed categories according to their business activities The Nature of Business Buying The Buying Situation

Buy class- a classification to characterize the degree of time and effort required to make a decision Straight rebuy- routine purchases with minimal decision making Modified rebuy- a previously made purchase that involves some change and requires limited decision making New-task buy- new b2b purchase that is complex or risky, requires extensive decision making The professional buyer Centralized purchasing- single dept does all buying for all the company's facilities The buying center- group of people in an organization who participate in a purchasing decision Roles Initiator- recognizes that purchase needs to be made (production employees, sales manager, anyone) - person who ultimately uses product (anyone, secretary) Gatekeeper- controls flow of information to others (buyer/purchasing agent) Influencer- affects decision by giving advice and sharing expertise (engineers, quality control experts, technical specialists, outside consultants) Decider- makes final purchase decision (purchasing agent, managers, CEO) Buyer- executes the purchase decision- (purchasing agent) The business buying decision process Problem recognition- purchase requisition or request made Information search- potential suppliers identified, product specifications developed, proposals obtained Evaluation of Alternatives- proposals evaluated, samples obtained and evaluated Product and supplier selection- purchase order issued Just in time (JIT)- inventory management and purchasing processes used to reduce inventory to very low levels and ensure that delieveries from suppliers arrive only when needed Single sourcing- buying a particular product from only one supplier Multiple sourcing- buy from several different suppliers Reciprocity- trading partnership, two firms agree to buy from one another Outsourcing- obtain outside vendors to provide goods and ser vices that otherwise might be supplied in house Revenue marketing- buyer firm attempts to identify suppliers who will produce products according to the buyer firm's specifications Postpurchase evaluation- s surveyed, performance documented Electronic Business-to-Business Commerce- internet exchanges between two or more businesses Extranet- private corporate computer network that links company depts, employees, and databases to suppliers customers Private exchanges- systems that link an invited group of suppliers and partners over the web

Security-- firewalls-only authorized individuals gain access, encryption- need right key

Chapter 8 Selecting and Entering a Market Market fragmentation- creation of many consumer groups due to a diversity of distinct needs and wants in modern society Target marketing stretegy- divide total market into different segments based on custermer characteristics, selecting one or more segments, and developing products to meets the needs of those specific segments Segmentation- dividing larger market into smaller pieces Segmentation variables- dimensions that divide the total market into groups Dimensions Demographics- measurable characteristics- gender, age, family structure, income, social class, race ,ethnicity, geography Geodemography- combining geography with demographics Psychographics- VALS- values and lifetyles- psych system that divides entire US population into 8 segments Behavorial segmentation- on basis of how they act toward, feel about, or use a good or service 80/20 rule- 20% of purchasers for 80% of a product's sales Usage occasions- when consumers use product most Targeting Target market- group or groups that a firm selects to turn into customers as result of segmentation and targeting Segment profiles- description of typical customer in segment Undifferentiated targeting strategy- appealing to broad spectrum of people---economies of scale! Differentiated marketing- develop one + products for each of customer groups with different product needs Concentrated targeting- focusing efforts on offering one or more products to a single segment Customized marketing- an approach that tailors specific products and the messages about them to individual customers Mass customization- modify basic good/service to meets needs of individ Positioning- develping marketing strategy aimed at influencing how a particular market segment perceives a good or service in comparison to the competition Steps: Analyze competitors' positions in marketplace Offer good or service w/ competitive advantage Finalize marketing mix, put it all together (4 Ps) Evaluate target market's responses Repositioning- redoing a product's position to respond to marketplace changes Brand personality- distinctive image that captures a good or ser vice's character and benefits Perceptual map Customer relationship management (CRM)

Characteristics of CRM Share of customer- percentage of an individual customer's purchase of a product that is a single brand Lifetime value of customer- potential profit generated by single customer's purchase over their lifetime Customer equity- financial value of customer relationships throughout lifetime of relationships Greater focus on high-value customers STEPS in CRM marketing Identify customers and get to know them in as much detail Diffentiate these customers by needs and value to company Interact with customers, find ways to improve cost efficiency and effectiveness of interaction Customize some aspect of products or services they offer to each customer (treat each customer differently

Chapter 5 Knowledge is Power Marketing info system (MIS)- procedure to continuously gather, sort, analyze, store, and distribute relevant and timely marketing info to managers Intranet- internal corporate communication network Marketing intelligence- method to get information about everyday happenings in marketing environment Market research- process of collecting analyzing and interpreting data about customers, competitors, and business environment to improve marketing effectiveness Syndicated research- research that collects data on regular basis, sells them to firms Custom research- research conducted for single firm to provide specific info Databases Marketing decision system (MDSS)- software that allows managers to conduct analyses and find needed info Data mining- sophisticated analysis techniques, takes advantage of massive amount of transaction info available Steps in marketing research process Define the problem Determine the research design Secondary data- collected for purpose other than purpose at hand Exploratory research- to generate insights for future, more rigorous studies Consumer interviews Focus group Projective techniques Case study Ethnography Descriptive research Causal research- cause and effect Choose the data collection method Telemarketing, face to face interviews, mail questionnaires, observation, unobtrusive measures, mechanical observation Data quality Validity- extent to which research actually measures what it was intended to measure Reliability- free of errors Representativeness- consumers in study similar to larger group Design the sample Probability sampling- each member of population has chance of being included Nonprobability sampling- personal judgment is used in selecting respondents Collect the data Gathering in foreign countries Back-translation

Singe-source data- info integrated from multiple sources Analyze and interpret the data Prepare the research report

Chapter 14 Tailoring marketing communications to customers Promotion- coordination of a marketer's communications efforts to influence attitudes or behavior Informs consumers of new goods, reminds them to continue using product, persuades them to choose over competition, builds relationships Integrated marketing communications (IMC)- process used to plan, develop, execute, and evaluate coordinated, measurable persuasive brand communication programs over time with targeted audiences Communications model- process whereby meaning is transferred from a source to a receiver Encoding by the marketer The source The message The medium Decoding by the receiver Noise- anything that interferes with effective communication Promotional strategy Promotion mix Advertising, sales promotions, public relations, and personal selling Personal appeals Mass appeals Advertising- nonpersonal communication using mass media Sales promotion Public relations Promotion plan- framework that outlines the strategies for developing, implementing, and controlling the firm's promotional activities Establish promotion objectives Create awareness Inform the market Create desire Encourage trial Build loyalty Influences on promotion mix Push strategy- company is trying to convince channel to offer them and entice their customers to select these items Pull strategy- company counting on customers to learn about and express desire for its products, thus convincing retailers to respond to this demand by stocking these items Actions in phases Intro- build awareness, push stretegy Growth- stress product benefit Maturity- persuade brand switching Decline- reduces spending on promotion mix, maybe revive

Determine and allocate total promotion budget Top-down budgeting techniques- based on total amount for marketing communications Percentage-of sales method- based on certain percentage of either last year's sales or estimates for present year's sales Competitive-parity method- organization matches whatever competitors are spending Bottom-up budgeting techniques- based on identifyig promotional goals and allocating enough money to accomplish them Objective-task method- organization first defines the specific communications goals it hopes to achieve and then tries to calculate what kind of promotional efforts it will take to meet these goals Allocate budget to specific promotion mix Deg the promotion mix How advertising, sales promotion, personal selling, and public relations can be used most effectively AIDA model- get attention, hold interest, create desire, produce action Interactive marketing- customized marketing communications elicit a measurable response from individual receivers Customizing the message De-mass marketing- slice market into smaller and smaller pieces First order response- directly yields transaction, transactional data Second-order response- customer other than a transaction Database marketing- the creation of an ongoing relationship with a set of customers who have an identifiable interest in a product or service and whose responses to promotional efforts become part of future communication attempts Interactive Builds relationships Locates new customers Stimulates cross-selling Is measurable Responses trackable IMC planning model Start with customer database Develop promotion strategies Implement specific promotion tactics Evaluate IMC communications

Chapter 15 Types of advertising Product advertising- focuses on specific good/service Institutional advertising- promotes activities, personality, or point of view of an organization or company Advocacy advertising- type of public service advertising provided by an organization that is seeking to influence public opinion on an issue because it has some stake in the outcome Public service ad (PSAs)- advertising run by the media without charge for notfor-profit organization or to champion a certain cause Advertising campaign Limited-service agency- provides one or more specialized services such as media buying or creative development Full-service agency- provides most of services for campaign, including research, creation of ad copy and art, media selection, production of final messages Developing an Advertising Campaign Identify target market Establish message and budget objectives Set message goals Set budget Design the ad Creative strategy- process that turns a concept into an ment Advertising appeal- central idea or theme of an advertising message USP- unique selling proposition- focuses on one clear reason why a particular product is superior Comparative advertising Demonstration Testimonial Slice-of-life Lifestyle Fear appeals Sex appeals Humorous appeals Slogans and jingles Pretesting- research that goes on in early stages, minimizes mistakes by getting consumer reactions to ad messages before they appear in media Copy testing- measures the effectiveness of ads by determining whether consumers are receiving, comprehending, and responding to the ad according to plan Media planning- developing media objectives, strategies, tactics for use Advertising exposure- degree to which target market will see an advertising message in a specific medium Impressions- # of people exposed to message placed in one or more media vehicles

Reach- % of target market that will be exposed to media vehicle Frequency- # times person in the target group will be exposed to message Gross rating points (GRPs)- compares effectiveness of diff media vehicles' average reach times frequency Cost per thousand (M)- compare relative cost-effectiveness of different media vehicles that have diff exposure rates; the cost to deliver a msg to 1,000 people or homes Posttesting, unaided recall (no hints about ad), aided recall (clues to prompt answers)

Chapter 16 Public relations- communication function that seeks to build good relationships with an organization's publics, including consumers, stockholders, and legislators Publicity- unpaid communication about an organization appearing in the mass media guerrilla marketing- ambush consumers with promotional content in places they aren’t expecting

Chapter 13 Price planning Cost-plus pricing- totalling all the costs for the product and then adding an amount (profit) to arrive at selling price Price-floor pricing- to maintain full plant operating capacity, a portion of a firm's output may be sold at a price that covers only marginal costs of production Demand based pricing- selling price based on estimates of demand at diff prices Target costing- identify the quality and functionality needed to satisfy customers and what price they are willing to pay before the product is designed; the product is manufactured only if the firm can control costs to meet the required price Yield-management pricing- charging different prices to diff customers to manage capacity while maximizing revenues Pricing strategies based on the competition Price leadership- one firm first sets its price and other firms in industry follow with similar price Pricing strategies based on customers' needs Value pricing- set prices that provide ultimate value to customers Everyday low pricing (EDLP)- same as value pricing New-product pricing Skimming price- very high, price that firm charges for its new highly desirable product When successful? Demand is price inelastic (high desirable, unique benefits) Little chance that competition can enter market quickly Penetration pricing- firm introduces new product at very low price to encourage more customers to purchase it Discourage competitors from entering market Barrier to entry if prices are so low that company will not be able to recover development and manufacturing costs Trial pricing- new product low for limited period of time to lower risk for customer To win customer acceptance first, make profits later Pricing tactics For individual products Two-part pricing - (golf clubs charge yearly/monthly fee, plus fees for each round, cell phones have set #monthly minutes, and per-minute rate for extra Payment pricing- monthly leases, make ppl less sensitive to total price (sticker shock) For multiple products Price bundling- selling 2 or more goods as single package for one price Captive pricing- tactic for 2 items that must be used together (razor and blade) Geographic pricing

F.O.B. origin pricing- cost of transporting the product from the factory to the customer's location is responsibility of customer FOB delievered pricing- cost of loading and transporting the product to the customer is included in the selling price and paid by the manufacturer Zone pricing- customers in different geographic zones pay different transportation rates Uniform delivered pricing- adds a standard shipping charge to the price for all customers regardless of location Freight absorption pricing- seller absorbs the total cost of transportation Discounting for of the channel List price- price end customer expected to pay as determined by manufacturer; also suggested retail price Trade of functional discounts- discounts off list price of products to of channel of distribution that perform various marketing functions Quantity discounts- charging reduced prices for purchases of larger quantities of a product Cumulative quantity discounts- discounts based on the total quantity purchased within a specified time period Noncumulative quantity discounts- discounts based only on the quantity purchased within individual orders Cash discounts- pay producer within certain time, amount due is then cut by certain percent Seasonal discounts Dynamic pricing- price can be easily adjusted to meet changes in the marketplace Auctions Price discrimination (based on what they know diff customer segments are willing to pay) Psychological issues in pricing Buyers' pricing expectations Internal reference prices- set price or price range in consumers' minds that they refer to in evaluating a product's price Price quality inferences Psychological pricing strategies Odd-even pricing- $1.99, $5.98, etc., concert and movie tix- even amts Price lining- the practice of setting a limited number of different specific prices called price points, for items in a product line Stripped down model cheap, better quality priced higher Legal and ethical considerations Bait and switch tactic- illegal practice where an d price special is used as bait to get customers into store with intention of switching them to a higher-priced item Loss leader pricing- setting prices very low or even below cost to attract customers into store Unfair sales acts- state laws prohibiting suppliers from selling products below cost to protect small businesses from larger competitors

Price fixing- two or more firms Horizontal price fixing- competitors who are making same product Vertical- force retailers to charge certain price Predatory pricing- set very low price to drive competitors out of business, then when they have a monopoly, increase prices NEED CHAPTER 3, 9,10, 11, 17, 18, 12

Chapter 3 – Ethics Social profit – benefit an organization and society receive from organization doing good stuff (community service, being ethical, promoting diversity, and being environmentally friendly) business ethics – rules of conduct for an organization codes of ethics – written standards of behavior that everyone must subscribe to lack of ethics can cost firms in lawsuits; customer and employee efforts can also cost firms Consumerism – movement to protect consumers against harmful practices Consumer Bill of Rights – right of consumers protected by federal government Include rights to be informed, safe, heard, and choose freely Discriminatory pricing – a pricing practice where different customers are charged different process Corrective advertising - clarifies or qualifies previous deceptive claims Puffery – claims of a superior product that can not be proven true or untrue Slotting allowance – paying a fee to retailers so that the product is on the shelves Social responsibility - management practice where organizations seek to engage in practices that have a positive effect on society and promote public good Environmental stewardship – to protect and enhace natural environment Green marketing – create a differential benefit that focuses on the environment Cause marketing - marketing to link company to a good cause Total quality management (TQM)- management philosophy that encourages employees to be a part of quality improvement and promote customer satisfaction ISO – international standard organization, set ISO 9000 for quality and ISO 14000 for environment Corporate cultures can be risk-taking, Profit-centered vs people-centered Business cycle – patterns in the economy, including recession, depression, and recovery Consumer confidence – willingness to spend as a reflection Discretionary income – money after necessities Competition can be either brand (same product, different company) or product (different products to satisfy same needs) Monopolistic competition - many firms with slightly different products offer unique consumer benefits

Chapter 9 Good – tangible product Core product is the benefits that the customer is buying MARKETING SUPPLIES BENEFITS AND NOT PRODUCTS Customized benefits are “bells and whistles” Actual product is the physical thing Augmented product is product + services and such Durable goods last Nondurable goods are consumed Convenience products are cheap, available, purchased frequently with minimal effort or comparison Classified as staples, impulse products, or emergency products Shopping products spend time and effort in gathering information about these and comparing alternatives before buying Specialty products good or service with unique characteristics, important to buyer, and will devote a lot of time to buying Unsought products are ones that the consumer has little awareness of until it is brought to their attention B2B Maintenance, repair, and opertating (MRO) products are consumed in a short period of time Specialized services are crucial to organization but not part of production Component parts are manufactured goods or subassemblies of finished items that are needed to complete products downstream Also raw materials, processed materials, and equipment needs Innovation is believed to be new and different in the eyes of consumers Continuous innovations are modifications of an existing product to distinguish competitors Knockoff – copies with slight modification another product Dynamic continuous innovation – change in existing product that requires moderate amounts of learning or behavior change. Convergence – two tech coming together to create a new system with benefits greater than each on their own Discontinuous innovation – totally new product that creates a makor change in how we live New product development Idea generation first step; brainstorm products that fit needs and company’s mission Product development and screening (like it sounds) Marketing strategy development Business analysis – assess commercial viability of product Technical development – new product is refined and perfected Prototype – test versions Test marketing - small market before large Commercialization Adoption (beginning to buy) and diffusion (spread through population) Awareness  interest  evaluation  trial  adoption  confirmation Categories: innovators (2.5%)  early adopters (13.5%)  early majority (34%) late majority (34%)  laggards (16%) Chap 10 – Managing the product Product lines – a firm’s total product offering designed to satisfy a single need or desire of a customer

Large number of offerings is a full-line and small number is a limited-line. Upward line is more expensive and downward line is less expensive filling out a product line is adding sizes or styles to previous line cannibalization – loss of sales of an existing brand to a new brand being introduced. Product mix – total set of all products that a firm offers for sale Quality – measured as level (relative) and consistency of quality Product life cycle - movement from introduction  growth  maturity (margins start to narrow as competition increases)  decline Brand - a name, term, symbol or unique element that identifies a product and sets it apart from the competition Should be easy to and have a name that fits needs of market Brand equity – value of a brand to an organization Brand extensions – new product with same brand name as strong existing brand Family brand – or umberella brand strategy; a lot of products under one brand Store brands, generic brands and national brands Licensing – selling the name of brand for someone else to use Co-branding – using two brands together to make a new product Ingredient branding – advertising the ingredient Trademark – brand name, mark, or character legally ed with government Universal product code (UPC)- black bars that is readable by scanners and identifies the product