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MKTG 2030 Exam Review.docx

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School
York University
Department
Marketing
Course
MKTG 2030
Professor
Aleem Visram
Semester
Winter

Description
MKTG2030ExamReview Chapter 7: Create the Product Objective I: Articulate value proposition  Valueproposition: benefit consumer will receive when buying product  Good: tangible product  Intangibleproducts: services, ideas, ppl, places  Products are viewed as a bundle of attributes Objective II: Explain the layers of a product  Coreproduct: basic benefits  Actual product: features, package, brand, quality, appearance  Augmentedproduct: Warranty, repair/maintenance service after sale, installation, customer support services, delivery, credit, product-use instruction  Objective III: How marketers classify product  Product life: o Durablegoods: provide benefits over a period of months/years/decades  High involvement o Nondurable goods: are consumed in short term  Low involvement  Consumer products o Convenienceproducts  Low priced, widely available, purchased frequently with minimum of comparison/effort  Marketers: Maketheproduct easily obtainable  Three types: staples, impulseproducts, emergency products o Shopping products  Are purchased with considerable time/effort o Specialty products  Have unique characteristics important to buyers at almost any price o Unsought products  Are those in which consumers have littleinterest/awareness until a need arises  Business products o Equipment  Products used by org in daily operations o Maintenance, Repair, andOperating (MRO)  Goods that business consume in short time o Raw Materials  Products gathered to work on to make finished products o ProcessedMaterials and Special Services  Products created when firms transform raw materials from original state o Component Parts  Manufactured goods/subassemblies of finished items that organizations need to complete their own goods Objective IV: Understand importance of services as products  Services: acts, efforts, performances exchanged from producer to user without ownership rights  Four characteristics versus products: o Intangibility: customers can’t see, touch, or smell o Perishability: impossible to store for later sale/consumption o Variability: even same service performed by same individual for same customer can vary o Inseparability: Impossible to separate the production of a service from the consumption of that service  Importance of the serviceencounter: actual interaction b/wcustomer and serviceprovider  To avoid bad service encounter firms turn to disintermediation: customers obtain an outcome without the intervention of a human provider  Several dimensions to service encounter  Social contact dimension  Physical dimension  Customer  Classifying services: o Tangible vs intangible // customer vs possession o Goods dominatedproducts: firms that sell tangible product still provide support services o Equipment/facility-basedservices: operational factors, location factors, environmental factors are important o People-basedservice: increasing in importance as people lack the time/expertise to do on their own o Core services: basic benefit of having a service performed o Augmented Services: additional services that enhance value, helping to differentiate businesses from one another  Quality: customers aresatisfiedwith what they havepaidfor o Based on customer expectations; marketers must identify & exceed customer expectations. If fail, need to offer explanation o Searchqualities: characteristics that the consumer can examinebeforepurchase o Experiencequalities: characteristics that buyers can determine during or after consumption o Credence Qualities: characteristics that are difficult to evaluate even after experienced o SERVIQUAL scale measures customer perceptions of tangibles, reliability, responsiveness, assurance, empathy of services  Gap analysis – measures the differenceb/w customer’s expectation of servicequality & reality o 5 gaps:  1) Consumers’ expectations and management’s perceptions  2) Management’s perceptions and quality standards firm sets  3) Established quality standards and service delivery  4) Service quality standards and consumers’ expectations  5) Expected service and actual service  Critical incident technique: marketers use customer complaints to ID critical incidents that cause problems and lead to dissatisfaction Objective V: Importance and types of product innovations  Innovation: product that customers perceive to be new and different from existing products o Dynamically continuous innovation  Pronounced modification to existing product  Requires modest amount of learning/behaviour change o Discontinuous innovation  Totally newproduct that creates major changes in way welive  No similar products on market  Consumers must learn agreat deal to use discontinuous innovation o Continuous innovation  Modification to existing product  Sets brand apart from competition  Change is minimal, therefore minimal/no learning Objective VI: How firms develop new products  New-product development (NPD): phases by which firms develop new products o 1) Ideageneration  Brainstorm for product that provide customer benefits and are compatible with company mission  Focus group often used o 2) Product concept development/screening  Product ideas are testedfor technical/commercial success o 3) Marketing strategy development  Develop marketing strategy to introduceproduct o 4) Business analysis  Product’s commercial viability is assessed o 5) Technical development  Engineers refine and perfect product  Prototypes are developed  Maybe patented o 6) Test marketing  The complete marketing plan is tested in a small geographic area similar to a larger market o 7) Commercialization  Launched into market, cue full scale jazz Objective VII: Process of product adoption and diffusion of innovations  Product adoption: process by which consumer/business customer begins tobuy and use a newgood, service, or idea  Diffusion: process by which the use of a product spreads through apop -> tipping point in diffusion   Categories of adopters: o  Product factors affecting speedof innovation diffusion: o Relative advantage o Compatibility o Complexity o Trialability o Observability Chapter 8: Manage the Product (brand) Objective I: Explain different product objectives and strategies a firm may choose  Product management: systematic approach to coordinating all aspects of product’s marketing initiative (aka brandmanagement)  Steps: o Develop product objective o Design product strategies o Make tactical product decisions  Objectives/strategies for individual products: successful introduction. Take local/regional products nationally. Bring new life to mature products  Objectives/strategies for multiple products o Product line: firm’s total product offering designed to satisfy a single need or desire of target customers  Full-line vs limited line strategies  Upward, downward, two-way line stretch  Filling out/contracting product line o Cannibalization  Product mix width strategy  Product quality: overall ability of product to satisfy customers’ expectations  Total quality management: management philosophy focusing on satisfying customers through empowering employees to be an active part of continuous quality improvement Objective II: Understand how firms manage products throughout product life cycle  Product life cycle: Introduction, growth, maturity, decline o Objective III: Discuss how branding strategies create product identity  Brand: name, term, symbol, or any other unique element that identifies onefirm’s product and sets it apart from the competition  Good brand name: o Maintains relationships with customers o Positions product by conveying an image/personality & describing how the product works o Is easy to say/spell/read/remember o Fits thetarget market and other reqs  Trademark: brandname/mark/character, legally  Brand equity: brand’s value to its organization above the value of the generic version of the product o Provides a competitiveadvantage o Results in brand loyal consumers  Brand storytelling: engage consumers with compelling stories about brands  Brand extensions: new products sold with the same brand name  Sub-branding: creating secondary brand within a main brand to differentiate product line  Branding strategies: o Individual brands: use a separate, unique brand for each product items o Family brands: market multiple products under the same brand name o National (manufacturer) brands: brands that the product manufacturer owns o Store(private-label) brands: brands that a certain retailer/distributer owns and sells o Generic brands: strategy in which products are not branded and are sold at the lowest price possible o Licensing: one firm sells the right to another to use a legally protected brand name o Co-branding: two brands combine to create a new product  Brand metrics for measuring brand equity: o Customer mind-set metrics o Product-market outcomes metrics o Financial market metrics o Revenue premium metrics Objective IV: How packaging and labeling contribute to product identity  Package: covering/container of product – QR code or UPC  Effective package design involves considering: o Packaging of other brands in same category o Choice of packaging material and the image it projects o Environmental impact o Shape, colour, graphic info o QR code  Labeling regulations – FDR, Consumer Packaging & Labeling Act Objective V: How marketers structure organizations for new and existing product management  Brandmanagers: responsible for developing & implementing the marketing plan for a single brand  Product category managers: responsible for developing & implement marketing plan for all brands and products within a product category  Market managers: responsible for developing and implement the marketing plans for products sold to a particular customer group  Ventureteams: groups of ppl within an org who work together to focus exclusively on the development of anewproduct  Skunk works: small & isolated venture team in a remote location that function with minimal supervision. Chapter 9: Price the Product Objective I: Explain importance of pricing, the process of making pricing decision, and setting objectives for pricing strategies  Price: the value that customers give up/exchange to obtain a desired product – monetary OR nonmonetary  Process of price planning o 1) Develop pricing objectives  Should be flexible, include: profit, sales/share, competitive effect, customer satisfaction, image enhancement o 2) Estimate demand  Shifts in demand/price elasticity o 3) Determinecosts  Variable cost, fixed cost, break even, etc. o 4) Examinepricing environment  Economy, competition, gov’t regulation, consumer trends o 5) Choose pricing strategy  Based on cost, demand, competition, customers’ needs, new-product pricing o 6) Develop pricing tactics  For individual products, multiple products, distribution based tactics, discounts Objective II: How marketers use costs, demands, revenues, and pricing environment to make pricing decisions  Factors include costs, demand, revenue, pricing environment
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