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Marketing Chapter 8
Ch.8 Vocab
| Term | Definition |
|---|---|
| Attributes | include features, functions, benefits and uses of a product. Marketers view products as a bundle of attributes that includes the packaging, brand name, benefits, and supporting features in additional to a physical good. |
| Good | a tangible product that we can see, touch, smell, hear, or taste |
| Intangible Products | services, ideas, people, places |
| Three Layers of Product Concept | Core product, Actual product, Augmented product |
| Core Product | all the benefits the product will provide for consumers or business customers Marketing is about supplying benefits, not attributes Basic benefits |
| Actual Product | the physical good or the delivered service that supplies the desired benefit EX: when you buy a washing machine, the core product is the ability to get clothes clean and the actual product is the large apparatus |
| Augmented Product | the actual product plus other supporting features such as a warranty, credit, delivery, installation, and repair service after the sale |
| Durable Products | consumer products that provide benefits over a long period of time, such as cars, furniture, and appliances |
| Nondurable Goods | consumer products that provide benefits for a short time because they are consumed (such as food) or are no longer useful (such as newspapers) |
| Consumer | convenience, shopping, specialty, unsought products |
| Business | equipment, maintenance, repair and operating, raw materials, processed materials and special services, component parts |
| Convenience Product | a consumer good or service that is usually low priced, widely available, and purchased frequently with a minimum comparison effort Whatever brand is easy to obtain, low priced, widely available |
| Staple Products | basic or necessary items that are available almost everywhere |
| Consumer packaged good (CPG) or fast-moving consumer good(FMCG) | a low-cost good that is consumed quickly and replaced frequently Brand centric and consumers can tell the differences Heavily advertised |
| Impulse Products | a product people often buy on the spur of the moment To promote these products marketers have two challenges: To create a product or package that reaches out and grabs the customer To make sure their product is highly visible |
| Emergency Products | products we purchase when we are in dire need |
| Shopping Products | goods or services for which consumers spend considerable time and effort gathering information and comparing alternatives before making a purchase EX: tablet computers |
| Specialty Product | goods or services that has unique characteristics and is important to the buyer and for which he or she will devote significant effort to acquire |
| Unsought Goods | goods or services for which a consumer has little awareness or interest until the product or a need for the product is brought to his or her attention Solution s to make prices more attractive |
| Equiptment | expensive goods that an organization uses in its daily operations that lasts a long time |
| Maintenance, repair and operating (MRO) products | goods that a business customer consumers in a relatively short time |
| Raw Materials | products of the fishing, lumber, agricultural and mining industries that organizational customers purchase to use in their finished products |
| Processed Materials | products created when firms transform raw materials from their original state |
| Specialized Services | services that are essential to the operation of an organization but are not part of the production of a product |
| Component Parts | manufactured goods or sub assemblies of finished items that organizations need to complete their own products |
| New Product | 1) a product must be entirely new or changed significantly to be called new 2) a product may be called new for only 6 months |
| Innovation | a product that consumers perceive to be new and different from existing products |
| Creativity | a phenomenon whereby something new and valuable is created |
| Continuous Innovations | a modification of an existing product that sets one brand apart from it competitors |
| Knockoff | a new product that copies, with slight modification, the design of an original product |
| Dynamically Continuous Innovation | a change in an existing product that requires a moderate amount of learning or behavior change |
| Discontinuous Innovations | a totally new product that creates major changes in the way we live EX: airplane, car, TV |
| Convergence | the coming together of two or more technologies to create a new system with greater benefits than its separate parts |
| Research and Development (R&D) | a well defined systematic approach to how innovation is done within the firm |
| New Product Development (NPD) | the phases by which the firm develop new products, including idea generation, product concept development and screening, marketing strategy development, business analysis, technical development, test marketing, and commercialization |
| Phases of New Product Development | Phase 1: Idea Generation Phase 2: Product Concept and Development Screening Phase 3: Marketing Strategy Development Phase 4: Business Analysis Phase 5: Technical Development Phase 6: Test Marketing Phase 7: Commercialization |
| Idea generation (ideation) | a phase of product development which marketers use a variety of sources to come up with great new product ideas that provide customer benefits and that are compatible with the company mission |
| Value Co-Creation | the process by which benefits-based value is created through collaborative participation by customers and other stakeholders in the new product development process |
| Phase 2: Product Concept and Development Screening | Describe what features the product should have and the benefits those features will provide for consumers Failures come more often than successes |
| Technical Success | when they decide whether the new product is technologically feasible-- can we actually build the product? |
| Commercial Success | they decide whether anyone is likely to buy the product |
| Phase 3: Marketing Strategy Development | Must identify the target market, estimate its size and determine how they can effectively position the product Planning, pricing, distribution and promotion |
| Phase 4: Business Analysis | the step in the product development process in which marketers assess a product’s commercial viability Know there is a market for the product but must find out if it can make a profitable contribution |
| Phase 5: Technical Development | the step in the product development process in which company engineers refine and perfect a new product Translation of technical developments into terms that consumers can easily understand and respond to |
| Prototype | test versions of a proposed product |
| Patents | a legal mechanism to prevent competitors from producing or selling an invention, aimed at reducing or eliminating competition in a market for a period of time |
| Phase 6: Test Marketing | testing the complete marketing plan in a small geographic area that is similar to the larger market the firm hopes to enter |
| Negatives of Test Marketing | extremely expensive, gives competition a free look at the new product |
| Positives of Test Marketing | marketers can evaluate and improve the product itself, advanced warning allowing them to save millions of dollars by “pulling the plug” |
| Simulated Test Marketing | application of special computer software to imitate the introduction of a product into the marketplace allowing the company to see the likely impact of price cuts and new packaging |
| Phase 7: Commercialization | final step in the product development process in which a new product is launched into the market |
| Crowdfunding | online platforms that allow thousands of individuals to each contribute a small amounts of money in order to fund a new product from a startup company (kickstarter.com & crowdfunder.com) Social media campaigns crank up, incentive programs |
| Product Adoption | the process by which a consumer or business customer begins to buy and use a new good, service or idea |
| Diffusion | the process by which the use of a product spreads throughout a population |
| Tipping Point | in the context of product diffusion, the point when a product’s sales spike from a slow climb to a unprecedented level |
| Adoption Pyramid | reflects how a person goes from being unaware of an innovation through stages from the bottom up of awareness, interest, evaluation, trial, adoption, and confirmation. |
| Steps in the Adoption Pyramid | Awareness, Interest, Evaluation, Trial, Adoption, Confirmation |
| Awareness | that the innovation exists at all is the first step |
| Media Blitz | a massive advertising campaign that occurs over a relatively short time frame |
| Interest | prospective adopter begins to see how a new product might satisfy an existing or newly realized need. |
| Evaluation | we weigh the costs and benefits of the new product |
| Impulse Purchases | a purchase made without any planning or search effort |
| Trial | when potential buyers will actually experience or use the product for the first time |
| Adoption | a prospect actually buys the product |
| Confirmation | a customer weights expected versus actual benefits and costs |
| Innovators | the first segment (2.5%) of a population to adopt a new product |
| Early Adopters | those who adopt an innovation early in the diffusion process but after the innovators 13.5% Very concerned about social acceptance Heavy media users |
| Early Majority | those whose adoption of a new product signals a general acceptance of innovation 34% Middle class consumers, above average education When the product is no longer considered new or different |
| Late Majority | the adopters who are willing to try new products when there is no risk associated with the purchase, when the purchase becomes an economic necessity or when there is social pressure to purchase-34%- Older, conservative, lower than average education |
| Laggards | the last consumers to adopt an innovation 16% Lower income/education |
| Categories of Adopters | Innovators, Early Adopters, Early Majority, Late Majority, Laggards |
| Relative Advantage | the degree to which a consumer perceives that a new product provides superior benefits |
| Compatibility | the extent to which a new product is consistent with existing cultural values, customs and practices |
| Complexity | the degree to which consumers find a new product or its use difficult to understand |
| Trialibility | the ease of sampling a new product and its benefits |
| Obervability | how visible a new product and its benefits are to others who might adopt it |
| Five Characteristics of Innovations | relative advantage, compatibility, complexity, trialability, obervability |
Created by:
acorso3
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