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Bcom MBM Year 2
Marketing
| Question | Answer |
|---|---|
| What is a product? | Anything that a person receives in exchange – normally for money. |
| Name six things that a product can be. | A tangible product (car). A service (dry cleaning). An idea (“don’t drink and drive”). A person (e.g. actor, musician). A place, city or country (e.g. Garden Route). A combination of the above. |
| Name the five levels of a product (graph) | Core benefit. Basic product. Expected product. Augmented product. Potential product. |
| Name the two product classifications. | Consumer products. Industrial products. |
| Name two ways to classify consumer products. | Classification by tangibility and durability. Classification by consumer’s buying behaviour. |
| Name the two types of products under durability. | Durable. Non-durable. |
| Name the four major characteristics that can be used to distinguish goods from services. | Intangibility. Perishability. Variability. Inseparability. |
| Name the three types of products under buyer behaviour. | Convenience products. Shopping products. Speciality products. |
| Give three examples of convenience products. | Staples. Impulse. Emergency. |
| Give two examples of shopping products. | Homogeneous. Heterogeneous. |
| Who are industrial products bought by? | Bought by organisations manufacturing or supplying products or providing services to other businesses. |
| What are industrial products usually purchased on the basis of? | Industrial products are usually purchased on the basis of organisation’s goals and objectives. |
| Name and explain the three types of industrial products. | Capital products: installation and accessory equipment. Production products: raw materials, process materials, and manufacturing materials, components & parts. Operating products: supplies, soft wares and services. |
| Define new products or services. | New products or services can be defined as those products or product attributes which are new to the organisation and which the target market regards as being significantly different from existing competitive products or services. |
| What is new product development? | New product development is a systematic process that has to be followed in order to create the new products with lowest possible risks and with highest possible benefits to the organisation. |
| Name and explain the five degrees of newness. | New-to-the-world: invention (1st car). New category entries: Take business to new category (hotel persue gambling). Existing product line addition: products=line extensions (coke light). Reposition: Marketed in new way. Improvement: improved/redesigned. |
| Name the eight steps in new product development process. | Organisation for product development. Idea generation. Idea screening. Concept development. Business analysis. Development. Test marketing. Commercialization. |
| Name the six groups within the organisation that can facilitate the development of a new product. | Product managers. New product managers. New product committee. New product department. New product venture team. Consultants. |
| How does an individual generate ideas. | Most ideas arise from identifying gaps in the market or by exploring an opportunity created by technological development. |
| Name the six sources of idea generation. | customers. employees. intermediaries. competitors. research and development. consultants. |
| Explain idea screening. | Eliminate ideas that are inconsistent with the firm’s new-product strategy or ideas that are inappropriate. |
| Name two types of mistakes that can be made during the screening process. | Dismissing a good idea. Proceeding with an unwise idea. |
| Explain concept development. | A product concept is a version of an idea and may consist of a number of product component that include the core component, the packaging component and the support service component. |
| Name the three evaluation questions that can be used to evaluate ideas to determine viability. | Who will use the product? What is the primary benefit? When will the product be used? |
| Name two things that must be done in "business analysis" in the new product development process. | Calculate figures for demand, cost, sales and profitability. Ask relevant questions. |
| Name three things that must be done in "physical product development" in the new product development process. | Develop a prototype (laboratory tests). Compile preliminary marketing strategy. Examine technical feasibility. |
| Name the two tests that the product must go through in "physical product development" in the new product development process. | Functional test. Consumer test. |
| Name three characteristics of test marketing in "physical product development" in the new product development process. | Limited introduction of a product and marketing strategy in the market. Checklist of criteria for choosing a test market. High cost of test marketing. |
| Name four advantages of test marketing. | Real test in real market environment. Offers last opportunity for fine-tuning the product. Provides opportunity to vary some of the marketing mix variables. Provides a forecast of future sales. |
| Name the 7 steps in "commercialization" in the new product development process. | Order production materials/equipment. Start production. Build inventories. Ship product to wholesalers and retailers. Train sales force. Announce product to retail trade. Advertise to potential customers. |
| Name the six success/failure factors of a new product. | Able 2 identify customer needs. The use of existing org know-how + resources. Screening + testing before develop. Coordination between research, develop + marketing. Organised environ that encourages entrep and risks. Linking NPD in org goals. |
| Name the six ways in which product decisions can influence the various functions of an organization. | The develop and manufact of new products present technical challenges for production. Has influence on financial mngmnt. Affect human resources of org. Affect information mngmnt in the org. Affect purchasing department. Affect marketing department. |
| Name the four important factors in the success of the new product development process. | Timing. Globalisation. Participation of management. Customer interaction. |
| What is new product development all about and what is it often marked by? | New products development is all about risk and uncertainty and its often marked by functional conflicts. |
| Name the two things that marketing perceives in the marketing interface and new product entry. | Marketing perceives a more critical role for the positioning of a new product. Marketing also perceives a higher degree of customization. |
| Name the three things that create the actual level of research and development/new product entry. | Communication intensity, information credibility and relative influence create the actual level of the R&D/Marketing interface. |
| What is diffusion? | Diffusion is the process through which products take time filter through consumer population. |
| Name the two factors that influence the diffusion process. | The nature of consumers. The nature of innovation. |
| Based on the time they take to accept new innovation, name and explain the five groups of consumers that can be identified. | Innovators: 1st to own latest prdct. Early adopters: Wait before buying prdct. Early majority: Try prdct after its tried and tested. Late majority: Suspicious, wait until late majority accepted the prdct. Laggards: Only accept the prdct when its a must. |
| Name the five perceived attributes of a new product that will influence the diffusion process. | Relative advantage. Compatibility. Complexity. Trialability. Observability. |
| What is positioning of a new product? | Positioning a product or service is the act of designing an organization's offering and image so that it occupies a distinct and valued perspective in the mind of the target audience. |
| What does the marketer need to do when positioning a new product? | During the positioning process, the marketer needs to analyse the position of competition and identify competitive advantage. |
| Name the four types of positioning through differentiation. | Product differentiation. Personnel differentiation. Channel differentiation. Image differentiation. |
| Name the six types of competitive positioning. | Positioning based on price. Positioning based on technical quality. Positioning based on service. Positioning based on benefit differentiation. Positioning based on innovation. Positioning based on customization. |
| What is repositioning? | Repositioning is the process whereby a brand’s original “personality” is altered to appeal to a different market segment. |
| Name the five individual product decisions that marketers need to make. | Product attributes. Branding. Packaging. Labelling. Product support services. |
| What does product attributes deliver? | Developing a product involves defining the benefits that it will offer. These benefits are communicated or delivered through product attributes. |
| Name the two steps of deciding product features. | Marketers need to discover specific features members of the target market find desirable in a product. The only way to identify new features and decide which one to add is by periodically surveying buyers who have used the product and asking questions. |
| Name the three questions that marketers can ask buyers who have used the product in order to identify new features and decide which one to add. | Why do you like the product? What specific features do you like the most? What can we add to improve the product? |
| Name the two dimensions of product quality. | Quality level and quality consistency. |
| How should product quality be evaluated? | Its important to evaluate quality through the eyes of the customers. |
| What is TQM? | Total Quality Management. |
| What is the outcome of product style and design? | Added value. |
| Distinguish between product style and product design. | Design is larger concept than style. Style simply describes the appearance of the a product. Design goes to the very heart of the product. |
| What is a brand? | A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller and to differentiate them from those of the competitors. |
| What is a brand name? | Part of the brand which be vocalised. |
| What is a brand mark? | Part of the brand which can be recognised. |
| What is a service brand? | Brand identification for service. |
| What is a trade name? | Legal name of an organisation. |
| What is a trademark? | Brand name, symbol or logo, which is registered and protected for the owner’s sole use. |
| What is a copyright? | Exclusive legal right to reproduce, publish and sell the matter and form of a literary, musical or artistic work. |
| Why does a brand name need to be managed carefully? | A brand name must be carefully managed so that its brand equity (the value the brand) does not depreciate. |
| What is brand equity? | Brand equity is the familiarity with a brand. |
| How do marketers build brand equity? | Marketers build brand equity by creating the right brand knowledge structures with right consumers. |
| Name the five benefits of branding to the consumer. | Facilitates product identification. Communicates features and benefits. Helps produce evaluation. Reduce risk in purchasing. Creates interest and character for the product image. |
| Name the six benefits of branding to the manufacturer. | Gives legal protection. Helps create brand loyalty. Create differential advantages. Allows premium pricing . Facilitates product diversification in certain areas. Increases power over the retailer. |
| Name the three benefits of branding to the seller. | Captured market. Segmented market. New product lunches. |
| Explain "The decision to brand or not to brand". | The first decision is whether a company should develop a brand name for its products or not. |
| Name the four reasons why retailers and manufacturers avoid branding, despite the numerous benefits. | Quality maintenance. Demand creation. Legal responsibility. Some products remain unbranded because they cannot be physically differentiated form other organisation’s products. Nail and raw materials (coal, cotton and wheat). |
| Name the 3 arguments surrounding branding. | 1) branding is unnecessarily expensive + offensive waste of resources. 2) Consumers who want branded prdcts r prepared 2 pay extra. 3) Brands can lose power (Name becomes too well known - is seen as a generic term). |
| What are generic brands? | Generic brands are no brand products where there is no identification other than a description of the contents on the product. Examples: Pick n Pay’s no name brand. |
| Explain generic brands. | These no name brands offer no guarantee of high quality and are produced and distributed inexpensively. |
| How does a generic brand identify a product? | A generic product name identifies a product by class or type and cannot be trade marketed. |
| How can one prevent the generic use of a brand? | In order to prevent the generic use of a brand name, marketers can place the R symbol right after the brand name if the brand name is registered or TM if it is not registered. |
| Name the four options manufacturers have with respect to brand sponsorship. | Manu brnd(National brnd):owned+used / manu (Nike). Distributors brnd(reseller/priv brnd):designd+used / wholesaler+retailer. Licensed brnd name:Com allow other org 2 use brnd name etc 4 royalty/fee. Co-branding: Place 2< brnds on prdct(Volvo use Michelin) |
| Name the two things that company decisions about brand identity depends on. | Whether the brand is an individual brand or part of part of a product line. Whether its name is specific to the brand or part of a corporate umbrella. |
| Name and explain the three alternatives for brand identification. | Individual brand names: separate brand names are assigned to individual product item within a product line. Example – SAB Amstel, Castle Larger, Carlin Black Label Family brand names: assigned to the entire line or mix. Example – Defy deepfrezers, refri |
| Name the four desirable qualities for a brand name. | It must allude to products attributes (Appletizer). It must be easy to pronounce. It must be original and distinctive. It must indicate high quality. |
| What is a product line? | A product line is a group of products that are closely related. |
| Name the two things under the make up of product line. | Product line length: this refers to the number of product item in a line. Depth of the product line: this refers to the number of different sizes, flavors etc with a particular product line. |
| When is the strategy of product line depth used? | The strategy of product line depth is used when a firm offers a wide variety of choices of the same product item. |
| What is line filling? | The process of deepening a product line by adding more items within the present range of line is called line filling. |
| What is the objective of line filling? | The objective of line filling is to satisfy more customers, increase profit. |
| When is a product line too short or too long? | A line is too short if profit can be increased by adding items and too long if dropping items increases profit. |
| What is the result of overdone line filling? | When line filling is overdone, it results to self cannibalization. |
| What is the breadth of a product line and what is broadening of a product line? | The breadth of the refers to the diversity of products in a line. Broadening a line means extending it beyond its current range, usually into related product categories. |
| What does breadth and depth in a product line allow a company to do? | Breath and depth in a product line allow a company to penetrate different market segments with similar products. |
| What is line stretching? | The process of extending a line beyond its current is called line stretching. |
| Name the three ways that line stretching can be done. | Line stretching can be done by trading down, trading up or trading both ways. |
| How can one modify existing product lines? | One can modify existing product lines by adding or deleting offerings to change the depth or breadth of a line. |
| Name the matrix of four strategies that adding/deleting offerings to change the depth/breadth of a line can create. | Line extensions. Brand leveraging. Line pruning. Line retrenchments. |
| Explain "Line extensions" under the matrix of four strategies that adding/deleting offerings to change the depth/breadth of a line can create. | Additions to the line in the same category to deepen the line. |
| Explain "Brand leveraging" under the matrix of four strategies that adding/deleting offerings to change the depth/breadth of a line can create. | Broadening a line by leveraging a successful brand. It entails introduction of a new product under existing brand name. |
| Explain "Line pruning" under the matrix of four strategies that adding/deleting offerings to change the depth/breadth of a line can create. | Reducing the depth of a product line by cutting back on number of alternatives, sizes, flavors etc. |
| Explain "Line retrenchments" under the matrix of four strategies that adding/deleting offerings to change the depth/breadth of a line can create. | Reducing the breadth of the line by cutting back on the diversity of items offered in related product categories. |
| What is line modernization? | Even when a product line length is adequate, the product line needs to be modernised from time to time. i.e new look Volkswagen Beetle is good example of line modernisation. |
| What can line modernization be used to do? | It can be used to motivate customers to replace products before they are worn out. |
| What is line modernization an example of? | This is an example of planned obsolescence. |
| What is line featuring? | Organisations may try to boost demand for slower selling products by selecting one of the fewer items in the line to feature. |
| What is a product mix? | A product mix (product assortment) is the set of all product lines that a particular company offers for sale. |
| What do the fundamental strategic decisions associated with product mix have to do with? | Fundamental strategic decisions associated with product mix have to do with expanding and contracting the mix. |
| What does expanding and contracting the mix have to do with? | This means adding or deleting a full line of products and services from an organisation’s business. |
| How is a product mix expansion achieved? | Product mix expansion is achieved by adding an entire line to the organisation’s market offerings. (related diversification or unrelated diversification). |
| How is a product mix contraction achieved? | Product mix contraction is carried out either by eliminating an entire line or by simplifying the assortment within the line. |
| Is a product mix contraction an easy decision? | Contraction of a product line is usually a difficult decision. |
| What are product portfolio decisions concerned with? | Product portfolio decisions are concerned with relationships, harmony and synergy between products lines in the mix, as well as product length and depth. |
| Which two things do marketing managers have to consider in the product portfolio? | Marketing managers considers the interrelationships and cash flows of the complete mix of products. |
| Give an example of a model that can be used in the product portfolio analysis. | Boston Consulting Group (BCG) portfolio matrix. |
| What does the BCG growth-share matrix do? | The BCG growth-share matrix classifies an organisation’s products according to the cash usage and their cash generation along two dimensions (relative market share and market growth rate. |
| Name the four categories of products that the BCG matrix classifies products into. | Question marks. Stars. Cash cows. Dogs. |
| Explain "Question marks/Problem children" under the four categories of products that the BCG matrix classifies products into. | Businesses in high growth market with low relative shares. The problem child is often a new product which could become a star if developed successfully. |
| Explain "Stars" under the four categories of products that the BCG matrix classifies products into. | Businesses in high growth market with high relative shares. As the industry matures, they become cash cows. |
| Explain "Cash cows" under the four categories of products that the BCG matrix classifies products into. | Businesses with high relative market share of low growth market. The primary generators of profit, they do not require additional cash investment. |
| What can the money from cash cow businesses be used for? | Organisations can use the cash from these businesses to support question marks and stars. |
| Explain "Dogs" under the four categories of products that the BCG matrix classifies products into. | Businesses in low market growth with low relative market share. They typically generate low profits or losses. Strategies that can be implemented are divesture and harvest. |
| Name the five limitations of the growth-share matrix. | Only uses two variables. Market growth rate inadequate descriptor. Relative market share is inadequate descriptor. Little guidence on how to implement strategies. Assume all business units independant except cash flow. |
| Explain "Dogs" under the four categories of products that the BCG matrix classifies products into. | Businesses in low market growth with low relative market share. They typically generate low profits or losses. Strategies that can be implemented are divesture and harvest. |
| Name the five limitations of the growth-share matrix. | Only uses two variables. Market growth rate inadequate descriptor. Relative market share is inadequate descriptor. Little guidence on how to implement strategies. Assume all business units independant except cash flow. |
| What is the PLC? | The PLC is an explanation of the changes that take place in sales over the life of the product, and changes in profit positions from birth to death. |
| Define the PLC. | The PLC can be defined as a planning tool that describes the stages a product will pass through from its introduction until its decline. |
| Name the four factors affecting the use of the PLC as a marketing tool. | Target market. The need to keep brands relevant and stimulate interest in the product category. Globalisation. The need for innovation to be constant. |
| Explain "Target market" as a factor affecting the use of the PLC as a marketing tool. | There are products that do not have only one life cycle but a series of short life cycles. Organisation is losing customers and attracting new customers all the time (Purity). |
| Explain "The need to keep brands relevant and stimulate interest in the product category" as a factor affecting the use of the PLC as a marketing tool. | Organisations must develop new variants to bring about interest in the product category. |
| Explain "Globalisation" as a factor affecting the use of the PLC as a marketing tool. | Especially through internet, ideas and products are able to reach countries quickly and product ideas can be copied. |
| Explain "The need for innovation to be constant" as a factor affecting the use of the PLC as a marketing tool. | Because of pressure to innovate, organisation rushes product to the market and may have to be withdrawn due to technical problem. |
| Name the four uses of the PLC as a marketing manager. | Change in its sales level. Managing the components of the marketing mix. New product decisions and product mix. The marketing of services. |
| Explain "The marketing of services" under the use of the PLC as a marketing manager. | Such as banking, the development of partnership relationship life cycle (PRLC) is based on the principles of the PLC. |
| Name the six PLC patterns. | Classic PLC. Fashion fad. Extended fashion fad. Season or fashion products. Revival. Fiasco. |
| Explain "Classic PLC" under the six PLC patterns. | Its an extended life cycle, where the product does not seem to have a declining phase but rather an extended maturity phase (coca cola). |
| Explain "Fashion fad" under the six PLC patterns. | These are products that have a short life (merchandise associated with reality television show – Big Brother). |
| Explain "Extended fashion fad" under the six PLC patterns. | These are products that are fashion products, their sales falls once the fashion begins to wear off but the product remains popular (aerobic classes). |
| Explain "Season or fashion products" under the six PLC patterns. | They flunctuate over time due to seasonal changes (soup during winter months). |
| Explain "Revival" under the six PLC patterns. | These are products moving through the PLC towards declining phase and marketing mangers are able to revive the products. |
| Explain "Fiasco" under the six PLC patterns. | Product launced but which fails in a short period of time. |
| Name the four phases of the PLC. | Introductory phase. Growth phase. Maturity phase. Declining phase. |
| Name eight characteristics of "The introductory phase" under the four phases of the PLC. | Slow sales growth. Customer resist new products. High marketing costs. Few distribution channel. Production problems. Few competitors in market (when product is totally new). Price charged for product depends on the nature of the product. Low profits. |
| Name five characteristics of "The growth phase" under the four phases of the PLC. | Increase in the number of competitors. Product improvement. Increase in the number of intermediaries. Low prices, assuming the use of price skimming. Increased profits. |
| Name the three sub-categories of "The growth phase" under the four phases of the PLC. | Growth maturity. Stable maturity. Decaying maturity. |
| Name five characteristics of "The maturity phase" under the four phases of the PLC. | Levelling off in sales growth. Management challenges. Increased level of competition. Reduction in profit margin. Reduction in overall level of profit. |
| Name five characteristics of "The declining phase" under the four phases of the PLC. | Permanent decline is sales. Withdrawal of the product. Cutting advertising. Decline in the size of the market. Decline in the number of competitors. |
| Name the four strategies in "The introductory phase" under the four phases of the PLC. | Slow skimming (high price, low promotion). Slow penetration(low price, low promotion). Rapid skimming (high price, high promotion). Rapid penetration (low price, high promotion). |
| Name the four strategies in "The growth phase" under the four phases of the PLC. | New features. Quality improvement. Distribution channel additions. New segments. |
| Name the five strategies in "The maturity phase" under the four phases of the PLC. | Market modification. Product modification. Marketing mix modification. Repackaging the product. Co-branding. |
| Name the five strategies in "The decline phase" under the four phases of the PLC. | Maintenance. Harvesting. Withdrawal/divesture. Rebranding. Repositioning. |
| Name the two objectives of strategies in the decline phase under the four stages of the product life cycle? | Objective is to reduce expenditure and milk the brand.. |
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