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Chapter 9.docx

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ECON 344

Chapter 9-Marketing What is the complexity of products? • When marketers involved with the development of new products, they think of them in an interrelated fashion o Centre-customer value o Actual product-customer value is converted to actual product o Associated services-nonphysical aspect • Types of products: o consumer products are products and services used by people for their personal use o marketers further classify these products by the way they are used and purchased  Speciality-customer show strong preference that they will extend effort to search for that supplier  Shopping-furniture, apparel, fragments spend time comparing alternatives  Convenience-don’t spend much time searching (soap, soda)  Unsought-don’t normally think of buying or don’t know about, need lots of marketing efforts • Product Mix-complete set of all products offered by a firm • Product Line Decisions-Groups of associated items that customers use together of that they see as reasonable part of similar product group o Product mix-all of the different lines carried o Product Line-oral care o Product category- customers see as reasonable substitute for one another ex. Colgate simply white vs. floss • Breath- is the number product LINESSS • Depth-is the number of product categories making up a LINE • Change the number of SKUs- individual items within each product category; smallest unit available in the inventory control o addition or deletion of SKUs in existing categories  Designed to stimulate sales  React to consumer demand  Create shelf space • What makes a brand? o Branding includes brand name, URLs, logos and symbols, characters, slogans, Jingles/Sounds • Value of branding for the customer and the marketer o Value of branding includes: brands facilitate purchasing, brands impact market value, brands are assets, brands establish loyalty, protect from competition, reduce marketing costs, brands are assets. o Brands add value to merchandise and services beyond physical and functional characteristics • Branding includes 3 categories: o Brand equity-set of assets and liabilities that add or substract from value of the product or service: brand awareness, perceived value, brand association, brand loyalty o Brand ownership strategies- manufacturer or national brand, store or private label, generic o Brand name strategies- Corporate or family brand, corporate and product line brand, individual • Brand equity o Awareness- when consumers recognize a need, they begin with an internal search, which they typically consider brands they already know first o Perceived Value-relationship between product and service’s benefits and its cost o Brand Associations-metal link that consumers make between brand and key product attributes (brand personality: human characteristic associated w a brand) o Brand loyalty-consumers are often less sensitive to price, marketing costs are much lower, firm insulated from the competition • Choosing a Brand Name: Desirable Qualities o Suggest benefits and qualities o Easy to pronounce recognize and remember o Capable of registration and legal protection o Translated easily • Brand Extension o Use of same brand name for new products being introduced to the same or new market o Benefits include…  Well established name  Brand known for high quality  Lower marketing cost  Synergy among products  Boost sales of the core brand o Brand dilution  Occurs when a brand extension adversely affects consumer perceptions about the attributes the core brand holds • You must always: o Evaluate the fit between the product class of the core rband and the extension o Evaluate consumer perceptions of the attributes of the core brand and seek out extensions with similar attributes o Refrain from extending the brand name to too many product o In the brand extension distanced enough from the core brand? o Co-Branding  Benefits the participating brands by attracting the consumers of one brand to the other (ex. Wendy’s and timmies) o Brand Licensing  Contractual arrangement between firms, whereby a firm allows another to use its brand name, logo, symbols for a fee o Packaging-green and health related packaging is becoming more popular, effective packaging can make a huge difference o Product labeling-label information is determined by regulations and labeling rules vary from country to country  Same products and made in Canada, natural and organic tags must meet specific tests before placing such terms on their label Services: The intangible Product • Services- Intangible customer benefits that are produced by people or machines and cannot be separated from the producer • Customer Service: refers to human or mechanical activities firms undertake to help satisfy their customer’s needs and wants o By providing good costumer service, firms add value to their products and services • Why customers leave- majority leave because of an attitude of indifference toward the customer by some employee • The service product continuum o Most offerings lie in middle service dominant and product dominant (ex. Dry cleaner, restaurant) • Economic importance of service o Service sector is 70% of canada’s economy o Developed economies are increasingly service oriented economies  Production was cheaper in other countries  Household maintenance became more specialized  High value placed on convenience and leisure o There are 4 unique characterisitics affecting service  Intangible- a characteristic where a service cannot be touched, tasted or seen like a pure product can • Requires using cues to aid customers, atmosphere is important to convey value, images are used to convey benefit of value  Inseparable- it is produced and consumed at the same time, that is, service and consumption are inseparable • Little opportunity to test a service before use, lower risk by offering guarantees or warranties  Inconsistent(variable)-quality may vary because it is provided by humans • Because of technology, training, automation, attitude • Increasing use of self checkout machines to add convenience  Inventory (perishable)- a characteristic of a se
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