COMPLETED MARKETING NOTES.docx

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Department
Business – Accounting
Course
24108
Professor
Jonathan Tyler
Semester
Spring

Description
MARKETING NOTES: Introduction to Marketing & The Marketing environment: Marketing: the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large. - Firms with a market orientation perform better than firms without. - Marketing benefits society and contributes to higher quality of life, it drives economic growth. - Marketing is used by small bizos, large corporations, bizos that sell g&s, non orgs, etc. - Marketers need to learn what customers, clients, partners and society want and this is an ongoing process as customer preferences are continually evolving. - Markets must be creative; the best are able to offer something that is unique to customers. Exchange: The mutually beneficial transfer of offerings of value between the buyer and seller. - A successful marketing exchange involves two or more parties each with something of value desired by the other party, all parties must benefit from the transaction and the exchange must meet both parties’ expectations. Value: A customer’s overall assessment of the utility of an offering based on perceptions of what is received and what is given. - Value = Quality / Price, benefits expected / benefits received. - Refers to the ‘total offering’. Evolves continually and is unique for each individual. Market: A group of customers with heterogeneous (different) needs and wants. - E.g. geographic, product, demographic markets. Customers: purchase goods and services for their own or other people’s use. Consumers: use the good or service. Clients: are ‘customers’ of the products of not-for-profit organisations. Partners: are all organisations or individuals who are involved in the activities of the exchange process. Society: is a body of individuals living as members of a community. Ethics: a set of moral principles that guide attitudes and behaviour. - Responsible companies implement their own codes of conduct. Laws and regulatory bodies: govern the conduct of individuals and organisational behaviour; ensuring actions are beneficial or at least acceptable to society. Corporate social responsibility: businesses have an obligation to act in the interests of the societies that sustain them. Stakeholders: individuals, organisations and other groups that have a rightful interest in the activities of a business including owners, employees, customers and clients, partners, government. Marketing mix: a framework describing the different elements that marketers need to consider. - Traditionally known as the 4 P’s (product, place, price, promotion). - Additional P’s are: people, process, physical evidence: (Tangible cues that can be used as means to evaluate service quality prior to purchase). Demand: a want (non-necessary desire) that a consumer has the ability to satisfy. Good: a physical (tangible) offering capable of being delivered to a customer. Service: An intangible offering that does not involve ownership. The marketing environment: all of the internal and external forces that affect a marketer’s ability to create, communicate, deliver and exchange offerings of value. Environmental analysis: a process that involves breaking the marketing environment into smaller parts in order to gain a better understanding of it. The internal environment: the parts of the organisation, the people and the processes used to create, communicate, deliver and exchange offerings that have value. - The organisation can directly control its internal environment. - Strengths and weaknesses are internal factors that +/- affect the org.’s ability to compete in the marketplace. The external environment: the people and processes that are outside the organisation and cannot be directly controlled. Marketers can only seek to influence external environment. Outsourcing: transferring an internal function to an external provider. - Opportunities and threats are external factors that +/- affect the org.’s ability to serve the market. Micro-environment: the forces within an organisation’s industry that affect its ability to serve its customers and clients- target markets, partners, and competitors. - It is not directly controllable by the organisation. - It consists of customers, clients, partners and competitors. Customers and clients: - Markets must understand the current and future needs and wants of their target market. - They need to indentify changes in customer preferences and be able to influence customer preferences. - Be willing and able to respond to changed and anticipate how needs and wants might change. Partners: - logistics firms (storage and transport), financiers (banks, loans, insurance), advertising agencies. - Retailers, wholesalers (storage and distribution), suppliers. Competitors: - Marketers must ensure their offerings provide their target market with greater value than their competitors’ offerings. - seek to understand their competitor’s marketing mix, sales volumes and trends, market share, staffing, sales per employee and employment trends.  Types of competition: Pure competition: Numerous competitors offer undifferentiated products. No buyer or seller can exercise market power. E.g doesn’t really exist, but closest is markets for agricultural goods such as sugar. Monopolistic competition: Numerous competitors, offer products that are similar, prompting the competitors to strive to differentiate their product offering from others. E.g. The market for bread. Oligopoly: A small number of competitors off similar, but somewhat differentiated, products. There are significant barriers to new competitors entering the market. E.g. The mobile telecommunications industry. Monopoly: There is only one supplier and there are substantial, potentially insurmountable, barriers to new entrants. E.g. Many government services. Monopsony: The market situation where there is only one buyer. E.g. Fed gov only buyer of flighter jets.  Levels of competition: Total budget competition: Consumers have limited financial resources and therefore must make choices about which products to consume the which to forgo. Competing against all alternative ways the consumer can engage in an exchange of value. Generic competition: Consumers often have alternative ways to meet their product needs. The same want or need can be satisfied by quite different products. This is known as substitutability. E.g. cityrail vs. Sydney buses. Product competition: Some products are broadly similar, but have different benefits, features and prices that distinguish them from competing products. E.g. soft drink. Brand competition: Some products are very similar, offering the same benefits, features and price to the same target market. E.g. Banks. Macro-environment: includes political, economic, sociocultural, technological and legal forces (PESTL). Political forces: The influence of politics on marketing decisions. - Relevant through lobbying for favourable treatment at the hands of the gov and for favourable regulation. - The very large market that the gov. and its bureaucracy comprise and the effect of political issues on international marketing. Economic forces: factors that affect how much people and organisations can spend and how much they choose to spend it. - It includes income, prices, the level of savings, the level of debt and the availability of credit. Sociocultural forces: the social and cultural factors that affect people’s attitudes, beliefs and behaviours, preferences, customers and lifestyles. E.g. the natural environment. Demographics: statistics about a population: age, gender, race, ethnicity, educational attainment, martial statua, parental status etc. Technology: A better way of doing things. It changes the expectations and behaviours of customers and clients and can have huge effects on how suppliers work. Laws: legislation enacted by elected officials. Regulations: rules made under authority delegated by legislation. - Laws and regulations govern what marketing organisations can and cannot legally do. - They fall into the categories of: privacy, fair trading, consumer safety, prices, contract terms and intellectual property. Situational analysis: identifying the key factors that will be used as a basis for the development of marketing strategy. Marketing planning: an ongoing process that combines organisational objectives and situational analyses to formulate and maintain a marketing plan that moves the organisation from where it currently is to where it wants to be. SWOT analysis: analysis that identifies the internal strengths and weaknesses and the external opportunities and threats in relation to an organisation. - SW is internal factors which are directly controllable, OT are beyond the org.’s direct control. Market Research: - A business activity that discovers information of use in making marketing decisions. - The information collected needs to be relevant and of value so it can contribute to improve performance. Target market: A group of customers with similar needs and wants. They are similar but not the same.  Market research informs many different types of decisions which include: - Market segmentation, sales performance, attitudes and behaviours. - Distribution, promotion, pricing, product. MIS: marketing information system  Market research involves five major components: - Defining the research problem - Designing the research methodology - Collecting data - Analysing data and drawing conclusions - Presenting the results and making recommendations  Factors should be considered before undertaking market research: - Relevance, timing, availability of resources, need for new information, cost-benefit analysis. Sugging: selling under the guise of research. Fugging: Fundraising under the guise of research. Ethics in market research: market researchers have an ethical responsibility to their clients or employers and to those who participate in the research. Research problem: The question that the market research project is intended to answer. - Clearly specified research problem will ensure that the research will actually answer the question asked of it. - Poorly defined research problem will lead to research that does not generate the information required to enable the marketing organisation to make marketing decisions. - As the research proceeds the original questions asked may be redefined. Market research brief: a set of instructions and requirements that generally states the research problem, the information required, and specifies the timeframe, budget and other conditions of the project. - It won’t necessarily propose a methodology or approach for the market research. - The more specific the problem, the more specific the answer will be.  A typical market research brief will include: - Executive summary: overview - Introduction: explains why the research needs to be conducted and who is proposing the research. - Background: details the marketing problem, providing all known facts and related projects. - Problem definition: the question that is to be addressed including set objectives. - Time and budget: the amount of money the marketer is able to spend, when the results are need, various milestones and contingencies. - Reporting schedule: includes precise dates on which reports are required and details about report format. - Appendices: additional detailed background information. Research design: the detailed methodology created to guide the research project and answer the research question. Hypothesis: A tentative explanation that can be tested. Exploratory research: gathers more information about a loosely defined problem. Doesn’t know much. Descriptive research: solves a particular and well-defined problem by clarifying the characteristics of certain phenomena. Casual research: assumes that a particular variable causes a specific outcome and then, by holding everything else constant, tests whether the variable does indeed affect that outcome. Primary data: Data collected specifically for the current market research project. Secondary data: Data originally gathered or recorded for some purpose other than to address the current market research problem, information that is already available. Data mining: processing large data sets to identify patterns and trends not obvious or even discernible by observation. Quantitative research: Research that collects information that can be represented numerically. - Approaches include: experimentation, observation and neuroscience. - Surveys are the most common tool. Qualitative research: Research intended to obtain rich, deep and detailed information about the attitudes and emotions that underlie the behaviours that quantitative research identifies. - Looks to identify the attitudes and emotions that underlie behaviours. - Its techniques include interviews and focus groups. Population: all of the things (often people) of interest to the researcher in the particular research project. Sampling: the process of choosing members of the total population. Sample: the group chosen for the study. Probability sampling: every member of the population has a known chance of being selected in the sample that will be studied. E.g. random sampling, stratified sampling. Non-Probability sampling: a sampling approach that provides no way of knowing the chance of a particular member of the population being chosen. E.g. Quota, convenience. Sampling error: A measure of the extent to which the results from the sample differ from the results that would be obtained from the entire population. Data collection, analysis and reporting: - Data must be collected according to the methods specified in the research design. - Data collection process can be conducted in-house or outsourced. - Time and financial resources are limited, so budgeting and scheduling need to be planned and managed. Data analysis: filtering and organising collected data. Quantitative analysis: Converts numerical data into knowledge that can be used to inform decision making, using software such as excel. Statistics based on one, two or more variables show trends and patterns, to support or refute the hypothesis. Qualitative analysis: Reduction and coding are used to interpret non-numerical data. Conclusions: state what the data has shown in terms of the original research question, and suggest one or more courses of action. Recommendations: possible courses of future action. Reporting: presenting research findings to enable decision makers to use the information. Written reports include - cover page and executive summary, table of contents - Introduction or background, methodology and findings, statement of limitations - conclusions and recommendations, appendices. - Market research results in decisions that take the form of marketing plans and strategies. - It begins with an issue, discovers information, allows informed decisions about how to respond and ultimately results in outcomes that match the marketing goals. - The effectiveness of market research undertaken is evaluated in order to prove a return on the investment. Captured by marketing metrics such as brand awareness and product sales. Consumer behaviour: - The analysis of the behaviour of individuals and households who buy goods and services for person consumption. - The central question is how do consumers respond to the various marketing stimuli the marketing organisation might use? - Marketers want to find out why the target market behaves in a certain way and why they have preference for particular brands.  Questions should be considered when a consumer expresses interest in buying a product: - why?, what is the person really seeking? What needs if he/she trying to satisfy? Price and time sensitive. - A person has many needs at any given time. Situation influences: the circumstances a consumer finds him or herself in when making purchasing decisions. - They include physical location, social interaction, time available, purchase motivation, consumer mood. Group influences: Cultural influences: - Influences on behaviours that operate at the level of the whole society, or of major groups within society. Culture: The system of knowledge, beliefs, values, rituals and artefacts by which a society or other large group defines itself. - These include tangible elements such as clothing and food, and intangible elements such as religious beliefs. Power distance: Degree of acceptable inequality within a culture. Uncertainty avoidance: Extent to which people feel threatened by uncertainty and seek to reduce it. Individualism: Extent to which people focus on their own goals over those of the group. Masculinity: Extent to which masculine values are valued over traditionally feminine values. Long-term orientation: Pragmatic, long-term orientation is valued over a short-term focus. Subculture: a group of individuals who share common attitudes, values and behaviours that distinguish them from the broader culture in which they are immersed. Multiculturalism: The existence of diverse cultures within a society.  Class influences: Social class: a group comprising individuals of similar rank within the social hierarchy. - An individual’s social class is defined by values and lifestyles, and often by indicators such as income, occupation and education.  Social influences: Social factors: influences on the individual to behave in a way that reflects group norms. Reference group: Any group to which an individual looks guidance. Membership refresh group: groups to which the individual belongs. Aspirational reference group: groups to which the individual would like to belong. Dissociative reference group: groups an individual does not wish to be associated with or which the individual may wish to leave. Opinion leader: A reference group member who provides relevant and influential advice about a specific topic of interest to group members. - Diffusions of innovation: a theory explaining the way in which innovations are adopted. - Innovators introduce innovations; early adopters (opinion leaders) drive adoption by the early majority, before it reaches the late majority and the laggards. Family life cycle: A series of characteristic stages through which most families pass. Family decision-making roles: Who has responsibility for making specific types of decisions within the family? Pest power: The influence of children on their parents’ purchasing decisions. Roles: Individuals play a number of roles each with a complex set of expectations. Roles might include parent, child, neighbour, employee, employer, customer, friend, etc. Status: Influence is built on the perceived status of the individual, based on a range of criteria including formal role, age, technical competence or social popularity.  Individual influences: Individual factors: Personal and psychological factors that influence consumer behaviour independently of social circumstances. Personal characteristics: Demographic, lifestyle and personality factors that influence consumer behaviour. Demographic factors: The vital and social characteristics of populations, such as age, education and income. Lifestyle: How an individual spends their time and interacts with others. Personality: The set of unique psychological characteristics and behavioural tendencies that characterise an individual, formed through a complex combination of genetics and experiences. Can’t manage what measure. Psychological characteristics: Internal factors, independent of situational and social circumstances, that shapes thinking, aspirations, expectations and behaviours. Motivation: An individual’s internal drive to satisfy unfulfilled needs or achieve goals. Maslow’s hierarchy of needs: A theory that suggests that people seek to satisfy needs according to an hierarchy that places lower order ‘biogenic’ needs before higher order ‘psychogenic’ needs. - From bottom to top: Physiological (hunger), Safety (house), Love or belongingness (intimacy), Esteem (respect from peers), Self-actualisation (creative art). Perception: The psychological process that filters, organises and attributes meaning to external stimuli. Two people might act differently in the same situation and may be caused by differing perception of the situation. Filtering procedures include: selective exposure, selective attention, selective distortion and selective retention. Distortion: See something but don’t believe it’s true. Beliefs: Descriptive or evaluative thoughts that an individual holds regarding their knowledge of a person, idea, or product. Beliefs may be based on objective knowledge, opinions or faith. Attitudes: An individual’s relatively stable and consistent thoughts, feelings and behaviours towards an object or idea.  Learning theories: - Behavioural learning theory: stresses the role of experience and repetition of behaviour, as seen in ‘classical conditioning’. Most relevant in low involvement purchases. - Cognitive learning theory: Learning takes place through rational problem solving, emphasising acquisition and processing of new information, relevant in high involvement purchasing decisions.  Consumer decision making: - Habitual: Low-engagement purchasing decisions, involving small, routine, low-risk products. - Limited: Limited-engagement purchasing decisions, involving infrequently bought, but familiar, products. - Extended: High-engagement purchasing decisions involving high-price, high-risk and/or infrequent, unfamiliar products.  Consumer decision making: 1. Need/want recognition: When a buyer becomes aware of a discrepancy between a desire state and the actual. 2. Information search: The buyer searches for information about how to solve the problem. 3. Evaluation of options: A successful information search will usually yield a range of alternative solutions for consideration. 4. Purchase: The brand and product are chosen. 5. Post-purchase evaluation: The buyer continues to evaluate their purchase decision. Cognitive dissonance: occurs when a purchaser has second thoughts of doubts about the wisdom of a purchse they have made. E.g. fitness first. Business Buying behaviour: Business markets: individuals or organisations that purchase products for resale, use in the production of other products or for use in their daily business operations. - Orgs that buy g&s to use in the production of other p&s or for the purpose of renting them to others at a profit. Reseller markets: The market of retailers, wholesalers and other intermediaries that buy products in order to sell or lease them to another party for profit. Anything between the original bizos and consumer is an intermediary.  Reseller intermediaries include: - Wholesalers: Sell to other intermediaries. - Industrial distributors: Sell to organisational buyers. - Retailers: Sell to consumers. B2C. Producer markets: The markets in which business organisations and professionals purchase products for use in the production of other products or in their daily business operations. - Examples of transactions include: buying office suppliers, professional services and raw materials. Government markets: The market for selling products to national (Cwlth), stat (Provincial) and local (municipal) governments for use in providing services for citizens. - They are subject to extensive rules and regulations designed to ensure that government business is conducted ethically and legally. Institutional markets: The business markets in which non-public, not-for-profit organisations buy and sell products. - They compete for ‘market share’ but have different goals and fewer resources than commercial orgs. They often rely on volunteer members, public donations and bequests. E.g. Hope for Haiti. High value purchases: business purchasing decisions frequently involve very large sums of money for high-value products of high-volume purchases. High volume purchases: Common in the reseller market. Because of the total value of their purchases, resellers can negotiate significant volume discounts on prices. High volume purchases are also relatively common in the producer market. Price competition and negotiation: In the business market, price competition is intense, as price is open to negotiation based on purchase volumes. Numbers of buyers and sellers: There are far fewer buyers and sellers in the business market than in the consumer market. This makes long term stable relationships crucial, and occasionally gives some organisations enormous market power. Formal assessment of purchase alternatives: Business customers demand extensive, detailed product information. Businesses use this, along with price, distribution and promotional factors, to compare the relative strengths and weaknesses of alternatives. Ongoing relationships: Close, ongoing relationships provide a degree of certainty to both parties. Statements of minimum levels of performance ensure ongoing quality for buyers.  Demand: Demand characteristics: Bizos tend not to adjust their consumption in relation to price changes, they pass the cost onto their customers or look for substitute products. Demand is more likely to be affected by a change in demand from the end consumer. Derived demand: Demand in bizos markets that are due to demand in consumer markets. Derived demand has a ‘knock on’ or ‘snowball’ effect at all levels of the value chain. Fluctuating demand: business customers make purchase decisions infrequently and based on expectations of long run demand, resulting in demand that fluctuates more so than in consumer markets. Joint demand: Interdependent demand for products that are used together in the production of another product. Pricing and demand: Inelastic demand is relatively independent of price, a common characteristic of demand within industries in the business market. Straight rebuy: The low engagement purchase of the same products as previously purchased from established vendors under established terms. Straight rebuys are efficient and convenient for buyers, and offer a reliable source of income for suppliers. Modified rebuy: The purchase of a product that is similar but not identical to one previously purchased after evaluating a small range of alternatives. E.g Microsoft 7 compared to vista and XP. New task purchase: a first purchase in a product category in response to a new problem, process or product. The business will need to engage in an extended information search to develop an understanding of technical alternatives, product specifications, possible vendors and likely price, including consumables and servicing arrangements.  Business purchasing decisions usually involve: - Negotiation: of price, supply agreements and volumes for example. - Description: technical specifications. - Inspection: when description and specification are not enough. - Sampling: a sample may be inspected or analysed for quality. Buying center: groups and structures within an organisation that make business buying decisions. Roles include: - Initiators: recognise a need to purchase. - Users: evaluate product performance. - Influencers: technical experts. - Deciders: authorise final purchases. - Buyers: ultimately make the purchase. - Gatekeepers: control relevant information.  The business decision making process: 1. A problem or unfulfilled need is recognised by the initiator 2. Info search and specification development for possible solutions, and to formalise the product requirements. 3. Evaluation of options. 4. Purchase. 5. Post-purchase evaluation. Internal environmental factors: explain why each org. makes different purchase decisions. Key factors include: - The nature of the organisation: size, location, objectives and resources. - Organisation structure: how responsibility and authority is arranged. - The individuals within the organisation: personal characteristics influence decisions. External environmental factors: include the macro-environment (PESTL), and the micro-environment (the industry, customers and competitive situation). - External environmental factors are not directly controllable by the organisation. OEM: original equipment manufacturer. Markets: Segmentation, Targeting and Positioning:  Markets van have a variety of characteristics: - Buyers have common wants, needs and demands. - Buyers have unique wants, needs and demands. - The market contains subgroups. Market segments: Subgroups within the total market that is relatively similar in regards to certain characteristics. Target marketing: An approach to marketing based on identifying, understanding and developing an offering for those segments of the total market that the organisation can best service. Mass marketing: Buyers have common wants, needs and demands. A single product will meet the needs of most people in the market, with an undifferentiated approach. - Producing economies of scale makes it possible to sell at a low price and capture very large markets. One-to-one marketing: Providing a unique, customised offering to meet individual customer needs. - Often results in higher unit costs and a more restricted market. - Conditions typically form the basis for a focus or niche strategy. Many small services bizos take a one to one marketing approach, e.g. hairdressers. Differentiated targeting strategy: A marketing approach that involves developing a different marketing mix for each target market segment. - Market segmentation forms the basis of target marketing. - It entails high costs. To achieve high profits requires higher retail prices, high market share and strong customer loyalty. Product specialisation: marketing efforts are concentrated on offering a single product range to a number of market segments. Market specialisation: Marketing efforts are focused on meeting a wide range of needs within a particular market segment. Product-market specialisation: Marketing efforts are concentrated on offering a single product to a single market segment. Segmentation variables: Characteristics that buyers have in common and that might be closely related to their purchasing behaviour. Segmenting consumer markets: -The variables for segmenting consumer markets fall into four broad categories: demographic, geographic, psychographic and behavioural variables. - Effective segmentation involves choosing segmentation variables that are easy to measure and readily available, and linked closely to the purchase of the product in question. Geographic segmentation: Market segmentation based on variables related to geography. - Useful geographic variables include climate, local population, market density, region, topography and urban, suburban, rural footprint. Geo-demographic segmentation: Combines demographic variables and geographic variables to profile very small areas, such as suburbs. Demographic segmentation: Market segmentation based on demographic variables, which are the vital and social characteristics of populations such as age, education and income. - Demographic variables are the most commonly used variables for market segmentation. Psychographic segmentation: Market segmentation based on the psychographic variables of lifestyle, motives and personality attributes. - It is based on the need to understand not who you are, but how you live your life. Behavioural segmentation: Market segmentation based on actual purchase and/or consumption behaviours. - They include benefit expectations, brand loyalty, occasion, price sensitivity and volume usage. Pareto principle: 80/20 principle, 80% of revenue generated from 20% of customers. Segmenting business markets: - As bizos markets are often characterized by a small number of buyers who might display a very close relationship with the seller, ‘customized’ or ‘one-to-one’ marketing is a good approach to use. - Bizos marketers isolate business customers by using commercial industrial directories that contain detailed information on companies.  Effective segmentation involves ensuring: Measurability: abstract variables can be difficult to measure Accessibility: through distribution and communication channels. Sustainability: The segment must be of sufficient size to allow profitability. Practicability: Segments are only of use if they can be identified and serviced. Stability: segment stays stable long enough for marketing strategy to produce results. Market segment profile: A description of the typical potential customer in the market segment. - Market segments must be sufficiently different from each other for distinctive offer to be created for each segment, without risk of overlapping segments or sending confusing images and messages. Market targeting: The selection of target markets resulting from an evaluation of identified market segments. Market potential: The total sales of a product category that all organisations in an industry are expected to sell in a specified period of time, assuming a specific level of marketing activity. Sales revenue: Total volume of sales multiplied by the average selling price. Market share: The proportion of the total market held by the organisation. Company sales potential: An estimate of the maximum sales revenue and market share that an organisation can expect to achieve for a specific product. Potential: Is influenced by the market potential, the level of marketing activity in the industry and the effectiveness of an organisation’s promotional spending. Market positioning: The way in which target market segments perceive an organisation’s offering in relation to competing offerings. Company positioning: A positioning strategy designed to create a single market perception of the entire organisation in relation to competitors. Brand positioning: A positioning strategy designed to create market perception of particular brand, usually based on product attributes. Product: - A good, service or idea offered to the market for exchange. Good: a physical/tangible offering capable of being delivered to a customer. Service: Intangible offering that does not involve ownership. Idea: concept, issue or philosophy offered to the market. Total product concept: Describes the core product (comprises the fundamental benefit that responds to the customer’s problem of an unsatisfied need or want), expected product (the attributes that actually deliver the benefit that forms the core product), augmented product (the product delivers a bundle of benefits that the buyer may not require as part of the basic fulfilment of their needs) and potential product (comprises all possibilities that could become part of the expected or augmented product) in order to analyse how the product creates value for the customer. Product item: A particular version of a product. Product line: A set of product items related by characteristics such as end use, target market, technology or raw materials. Product mix: The set of all products that an organisation makes available to customers. Consumer products: Those products purchased by households and individuals for their own private consumption. B2B products: those products purchased by individuals and organisations for use in the production of other products or for use in their daily business operations.  Consumer product: Shopping products: Consumer products that involve moderate to high engagement in the decision making process, with the purchase decision being based on consideration of features, quality and price. Convenience products (fast moving consumer goods): Inexpensive, frequently purchase consumer products that are bought with little engagement in the decision-making process. Specialty products: Highly desired products with unique characteristics that consumers will make considerable effort to obtain. Unsought products: Products purchase to solve a sudden, unexpected need.  B2B product: Part and materials: b2b products that form part of the purchasing business’ products. Equipment: Capital equipment and accessory equipment used in the production of the business’ products. Supplies and services: b2b products that are essential to business operations, but do not directly form part of the production process.  Product Life Cycle: The typical stages a product progresses through: - New product development - Introduction - Growth - Maturity - Decline. ---- Of 1500 officially registered screenplays only 4000 are ‘green lighted’ (Wharton, 2006).  The new product development process: stages 1-5 the product can be killed. 1. Idea generation 2. Screening. 3. Concept evaluation. 4. Marketing strategy. 5. Business analysis. 6. Product development. 7. Test marketing. 8. Commercialisation.  Product adoption process: The sequential process of awareness, interest. Evaluation, trial and adoption through which a consumer decides to purchase a new product. - Awareness - Interest - Evaluation - Trial - Adoption Diffusion of innovations: The theory that social groups influence the decision made by individuals in such a way that innovations are adopted by the market in a predictable pattern over time. Product differentiation: The creation of products and product attributes that distinguish one product from another. - Characteristics that customers may perceive to be differentiators include design, brand, image, style, quality, features and price. Brand: A collection of symbols such as name, logo, slogan and design intended to create an image in the customer’s mind that differentiates a product from competitors’ products. Brand image: The set of beliefs that a consumer has regarding a particular brand. Brand name: Part of a brand that can be spoken, including words, letters and numbers. Brand mark: The part of a brand not made up of words- it often consists of symbols or designs. Trade mark: A brand name or brand mark that has been legally registered so as to secure exclusive use of the brand. Brand equity: Added value that a brand gives a product. Brand loyalty: Customer’s highly favourable attitude and purchasing behaviour towards a brand. Brand metrics: Measure the value of brands and include brand assets, stock price analysis, replacement cost, brand attributes, and brand loyalty. Individual branding: A branding approach in which each product is branded separately. Family branding: A branding approach that uses the same brand for several of the organisation’s products. Brand extension: Giving an existing brand name to new product in a different category. Manufacturer brands: Brands owned by producers and clearly identified with the product at the point of sale. Private label brands: brands owned by resellers, such as wholesalers or retailers, and not identified with the manufacturer. Generic brands: Products that only indicate the product category. Licensing: the brand owner permits another party to use the brand on its products. Franchising: agreement to use an established business model. Benefits: coordinated promotional activity, reduced risks and effort. Co-branding: Use of two or more brand names on the same product. Primary package: Holds the actual product. Secondary package: The material used to hold or protect the product; it can be removed and discarded after purchase. Shipping package: Used to carry the product out of the factory, through the distribution channel to the retailer. Labelling: part of the package and provides identifying, promotional, legal and other information.  Compulsory label information can include: - Brand name and logo - Product name - Ingredients list - Use by date or date of packaging - Bar code Line extensions: New products that are closely related to existing products in a product line. Product modifications: Changes to the characteristics of a product that result in a product that supersedes the original. The main types of product modification relate to functionality, quality and aesthetics. Product positioning: The way in the market perceives a product in relation to competing offerings. Product deletion: The process of removing a product from the product mix. Price: Price: the value that the buyer gives in exchange for the product in a marketing transaction. - A major determinant of sales volume. - Directly related to profitability, profit= (price x sales volume) - total costs Buyer benefit: satisfaction derived from the consumption or ownership of the product. Seller benefit: the revenue the sale derives. Determining pricing objectives: should be specific, measurable, actionable, reasonable and timetabled. Profits: generated when total revenues exceed total costs. Prices must exceed costs. Return on investment: The profit required to justify investment in a particular produc
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