Study Guides (238,185)
Canada (114,990)
Commerce (679)

Midterm 2.doc

19 Pages
Unlock Document

McMaster University
Carolyn Capretta

Chapter9 Blending of the four strategy elements: product, distribution, promotion, and price — to fit the needs and preferences of a specific target market Product—Bundle of physical, service, and symbolic attributes designed to satisfy a customer’s wants and needs. --> People buy want satisfaction, not objects. Service— Intangible task that satisfies the needs of consumer and business users. Goods — tangible products that customers can see, hear, smell, taste, or touch. Good-Services continuum— spectrum along which goods and services fall according their attributes from pure good to pure service. Service Characteristics 1) Services are intangible. “usually ask their customers to buy a promise-that the haircut will be stylish” 2) Services are inseparable from the service providers. “Consumer perceptions of a service provider become their perceptions of the service itself” 3) Services are perishable “providers cannot maintain inventories of their services” 4) Companies cannot easily standardize services. “many companies are trying to change this, example: Fast food chain promises promise that you will get your meal within a certain number of minutes and it will taste the way you expect; Hotel- chains promise that you will get your meal within a certain number of amenities at each location--a pool,fitness room, free breakfast or movie.” 5) Buyers often play a role in the creation and distribution of services. 6) Service standards show wide variations. “different cuisine, physical surroundings, service standards and prices” The service sector makes up more than 70 percent of the Canadian economy. Consumer (B2C) product — Product destined for use by ultimate consumers Business (B2B) product — Product that directly/indirectly to the output of other products for resale Unsought product— Products marketed to consumers who may not yet recognize any need for them Convenience Products— Goods and services that consumers want to purchase frequently, immediately and with minimal effort. A) impulse product -product you buy at the spart moment B) staples--product bought to constantly replentish and maintain a ready C) emergency product--unexpected and emergency needs---ex. medicine slotting fee-- fee charge from the retailer/ manufacturers for promise of the displays of their items Shopping Products--products purchased only after the consumer compares competing offerings on such characteristics as price, quality, style, and colour. A) Homogenous shopping products B) Heterogeneous shopping products Specialty Products--Products that offer unique characteristics that cause buyers to prize those particular brands Classifying Consumer Service 1) Nature of the service 2) Relationship of the service organization with its customers 3) Flexibility for customization and judgment on the part of the service provider 4) Demand and supply fluctuation 5) How the service is delivered Applying the Consumer Products Classification System- Buying behaviour patterns and marketing mix choices differ for different product types. Classification of Business Products- Categories emphasize product use rather than consumer buying behaviour. raw materials-natural resources such as farm products that become part of final product business services-intangible products firms buy to facilitate their production and operating processes components - finish business products of one producer that become part of the final products of another producer accessory equipment -- capital item, such as desktop computer, that typically cost less and last shorter than installation installations--the specialty products of the business market MRO items-- business supplies that include maintenance items(light bulbs),repair items(nuts and bolts used in repairing equipment) and operating supplies (printer ink, pens) Business service-- intangible products that firms buy to facilitate their production and operating process Quality is the key component to a firm’s success Total Quality Management (TQM): Continuous effort to improve products and work processes with the goal of achieving customer satisfaction and world-class performance WorldWide Quality Programs-begins in 1920s :by improving the manufacturing process; 1980s: quality revolution picked up speed in corporations European Union’s ISO 9001: 2000 standards that define international, generic criteria for quality management and quality assurance---> Canadian member body of ISO is the Standards Council of Canada National Quality Institute is an independent, not-for-profit organization Malcolm Baldrige National QualityAward Benchmarking– process which includes a set of standards in order to achieve superior performance (gives you a competitive edge) Involves three main activities: 1) Identifying processes that need improvement 2) Comparing processes to those of industry leaders 3) Implementing.changes for quality improvement Service Encounter: Point at which the customer and service provider interact Service Quality: Expected and perceived quality of a service offering. Determined by five variables: A) Tangibles, or physical evidence, “Atidy office and clean uniform are example” B) Reliability, or consistency of performance and dependability C) Responsiveness, or willingness and readiness od employees too provide service.A saleperson who asks, “how may I help you? ” is an example D) Assurance, or the confidence communicated by the service provider E) Empathy, or the service provider’s efforts to understand the customer’s need and then individualize the service Product line — Series of related products offered by one company Marketing entire product lines can help company grow, economize company resources, and exploit product life cycles Reason: 1) Desire to grow 2) Enhancing company’s position in the market 3) Optimal use of company resources The Product Mix: Assortment of product lines and individual product offerings that the company sells A) Product mix width — Number of product lines a firm offers B) Product mix length — Number of different products a firm sells C) Product mix depth — Variations in each product that the firm markets in its mix D)Product Mix Decisions— Firms evaluate the effectiveness of the width, length, and depth to make decisions about adding or eliminating products from their offerings. Line extension – adding individual offerings that appeal to different market segments while remaining close to existing product line The Product Life Cycle:Progression of a product through introduction, growth, maturity, and decline stages Introductory stage: Technical problems and financial losses are common.Afirm works to stimulate demand for the new market entry. Growth stage: Sales volume rises rapidly, a firm starts to realize substantial profits from its investment in product. Maturity stage:Sales of a product eventually reach a plateau, industry sales level out Decline stage:Absolute decline in industry sales. Extending the Product Life Cycle: a) Increasing frequency of use b) Increasing the number of users c) Finding new uses d) Changing package sizes, labels, or product quality Product Deletion Decisions: Marketers prune product lines and eliminate marginal products to preserve limited resources Chapter 10 Brand— Name, term, sign, symbol, design, or some combination that identifies the products of one firm while differentiating them from the competition’s Brand Loyalty--Measured in three stages: 1) Brand Recognition= firm’s first objective for newly introduced products. Try to make your product recognized by customers 2) Brand preference= buyers rely on some kind of image which related to the product and would choose the particular product over the competitors’ products 3) Brand insistence= ultimate stage of brand loyalty and consumer refuse alternatives Types of Brands Generic product: small firm has product in stores without their name on the product Big stores have product out in the market but they do not put their name on it When no effort towards branding goals, have plain labels, little or no advertisement, no brand names, usually reduced prices. E.g. no name brand. A) Manufacturer’s brand--brand name owned by a manufacturer or other producer. B) Private brands-- brand offered by a wholesaler or retailer C) Captive brands-- national brands that are sold exclusively by a retail chain D) Family brands-- single brand name that identify serval related product E) Individual brands-- single brand that uniquely identifies a product itself Brand Equity:Added value that a respected, well-known brand name gives to a product in the marketplace Brand equity + quality = maximum competitor advantage Afirm builds brand equity sequentially on 4 dimensions of brand personality: 1) Differentiation-refers to brand’s ability to stand apart from competitors 2) Relevance- refers to the real and perceived appreciativeness of the brand to a big consumer segment. 3) esteem- is a combination of perceived quality and consumer perceptions about the growing or declining popularity of a brand. 4) knowledge- refers to the extent of customers’awareness of the brand and understanding of what a good service stand for. The Role of Category and Brand Management Brand management — Traditionally, companies have assigned the task of managing a brand’s marketing strategies to a brand manager. Category management— Product management system in which a category manager — with profit and loss responsibility — oversees a product line Product Identification Brand names- part of a brand consisting of words, numbers, or letters that can be spoken and that identifies and distinguishes a firm’s offering from those of its competitors Brand marks-symbol or pictorical design that distinguishes a product Trademark — Brand for which the owner claims exclusive legal protection Protecting trademarks- exclusive legal right to use a brand name, brand mark, and slogan. Trade dress– colours, trade mark, brand name everything together Developing Global Brand Names and Trademarks -Can be difficult due to cultural and language variation -Names and symbols may not translate well in other cultures. -May use a single brand name worldwide or use altered versions to adapt to cultures and languages of individual nations Brands which generate more than 20% of sales outside the home country are called global brand Packaging:Protection against damage, spoilage, and pilferage; Assistance in marketing the product; Cost-effective packaging Labeling: Labels are both promotional and informational. Universal Product Code (UPC); UPC– numerical bar code used to record product and price information Radio-frequency identification (RFID) tags;RFID– electric magnetic chips which carry encoded information Lazer coding– putting lazar code or tattoos on products. Usually on vegies and produces. Usually edible Brand Extensions- Strategy of attaching a popular brand name to a new product in an unrelated product category Brand Licensing-Authorizing other companies to use a firm’s brand name New-Product Planning: Product Development Strategies Maket penetration strategy-Strategy that seeks to increase sales of existing product in .existing products in existing markets Product positioning- Consumers’perceptions of a product’s attributes, uses, quality, and advantages and disadvantages relative to competing brands Market development strategy- Strategy that concentrates on finding new markets for .existing products Product development- introduction of new products into identificable or established markets Product diversification strategy- developing entirely new products for new markets Cannibalization-Introducing a new product that adversely affects sales of existing products Adoption process- stages that consumers go through in learning about a new product, .trying it, and deciding whether to purchase it again Stages in the Consumer Adoption Process A) Awareness– individuals first learn it but lacks full info about it B) Interest– active stage. Customers go to look for info C) Evaluation- they consider the likely benefit of the product D) Trial- they make trial purchases to determine its usefulness E) Adoption/ rejection- they decide to use the product regularly if have satisfactory result Consumer innovators — People who purchase new products almost as soon as the products reach the market Diffusion process— Process by which new goods or services are accepted in the marketplace Laggards are in the end of growth phase of the product life cycle. The whole adoption process will end in the the growth phase. Because there will be no new people trying your product in maturity phase. identifying Early Adopters:Tend to be younger, are better educated, and enjoy higher incomes than other consumers Rate ofAdoption Determinants: A) Relative advantage- innovation consistent that appears far superior to previous ideas offers a greater relative advantage B) Compatibility- an innovation consistent with the values and experiences of potential adopters attract new buyers at a relatively rapid rate C) Complexity- the relative difficulty of understanding the innovation influences the speed of acceptance D) Possibility of trial use- an initial free or discounted trial of a good and service means that adopters can reduce their risk of financial or social loss when they try the product E) Observability -if the potential buyers cna observe an innovation’s superiority in tangible form, the adoption rate increases Organizing for New-Product Development A) New-product committees B) New-product departments C) Product managers- marketer within an organization who is responsible for an individual produce or product line; also called a brand manager D) Venture teams- associates from different areas of an organization who work together in developing new products New product development process: Concept testing: method for subjecting a product idea to additional study before actual development by involving consumers through focus groups, surveys and in-store polling and the like. Product Safety and Liability Product liability— Responsibility of manufacturers and marketers for injuries and damages caused by their products National standard system Standard council of Canada Give technical specifications on all product in Canada Canadian Food Inspection Agency– Hazardous ProtectionAct 70-80% product fails Reasons: Inadequate marketing assessment Poor screening Product defects Inadequate launch efforts Ch 11 distribution– Movement of goods and services from producers to customers Marketing (distribution) channel– System of marketing institutions that enhances the physical flow of goods and services, along with ownership title, from producer to customer logistics– Coordinating the flow of information, goods, and services among members of the distribution channel Supply-chain management–Control of the activities of purchasing, processing, and delivery through which raw materials are transformed into products and made available to final consumers physical distribution– Broad range of activities aimed at efficient movement of finished goods from the end of the production line to the consumer The Role of Marketing Channels in Marketing Strategy Four functions of marketing channels: 1) Facilitating the exchange process by reducing the number of marketplace contacts necessary to make a sale [help to make number of contacts smaller: ex. if there is no retailer, u need to go to 100 manufactory to get different needs. Now, we only need to go to shoppers to get all our needs for a month. contact smaller.] 2) Adjusting for discrepancies in the market’s assortment of goods and services via .sorting.[sorting: allow people to get the needs they want] 3) standardizing exchage(the way u pay and stuff won't change much) transactions by setting expectations for products 4) Facilitating searches by both buyers and sellers Type of Marketing Channels Direct channel--marketing channel that moves goods directly from a producer to the business purchaser/ ultimate user Direct selling– Strategy designed to establish direct sales contact between producer and final user Marketing intermediary[middleman] – Organization that operates between producers and consumers or business users wholesalers– Takes title to the goods it handles and then distributes these goods to retailers, other distributors, or sometimes end consumers[wholesalers take the title of good and services, when they take the goods from manufatory-> they also take the titles (ownership etc)] Service firms- market through short channels because need to maintain personal relationships Agents– will not take the title of the good if handles vs wholesaler does Channels Using Marketing Intermediaries A)Producer to wholesaler to retailer to consumer B)Producer to wholesaler to business user C)Producer to agent to wholesaler to retailer to consumer D)Producer to agent to wholesaler to business user -manufactures’representative:Agent wholesaling intermediary that represents manufactures of related buy noncompeting products and receives a commission on each sale. E)Producer to agent to business user Dual Distribution-Movement of products through more than one channel to reach the firm’s target market[try to sell products by using different channels: online channel, mail channel etc] Reverse Channels-Channels designed to return goods to their producers; Used for recalls and repairs Growing importance because of:Rising prices for raw materials;Increasing availability of recycling facilities;Passage of additional antipollution conservation laws. table 11.F1actors Influencing Marketing Channel Strategies Characteristics of Short ChannelsCharacteristics of Long Channels Market factors Business users Consumers Geographically concentrated Geographically dispersed Extensive technolwledge and regular servicingLittle technical knowledge and regular servicing not required required Large orders Small orders Perishable Durable Product factors Complex Standardized Expensive Inexpensive Organizational factors Manufactureradequate resources to performMnnelfacturer lacks adequate resources to perform functions channel functions Broad product line Limited product line Channel control important Channel control not important Competitive factors Manufacturersalisfied with marketing inteariensu’facturer feels dissatisfied with marketing performance in promoting products intermediaries’ performance in promoting products Determining Distribution Intensity A)Intensive distribution– Distribution of a product through all available ch
More Less

Related notes for COMMERCE 2MA3

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.