Marketing Chapter 10 Flashcards

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Questions and Answers

What is the result of a derived demand?

Sales of consumer goods decrease.

Sales of business goods increase. (correct)

Sales of business goods decrease.

Sales of consumer goods increase. (correct)

What defines a Product?

A good, service, or idea that satisfies consumer needs.

What does Product Mix refer to?

The number of product lines offered by a company.

What are the three categories into which Degree of Tangibility divides products?

Durable Goods, Non-Durable Goods, Services. Signup and view all the answers

What is a Stock-Keeping Unit (SKU)?

A unique identification number that defines an item for ordering or inventory purposes. Signup and view all the answers

Which of the following types of goods require no new learning by consumers?

Continuous Innovation Signup and view all the answers

A ______ good is purchased by the ultimate consumer.

Consumer Signup and view all the answers

New services differ from product innovation in that they often require customer presence.

True Signup and view all the answers

What are the four types of consumer goods?

Convenience, Shopping, Specialty, Unsought products. Signup and view all the answers

What stage involves creating a prototype product and testing it in the lab?

Stage 5: Development. Signup and view all the answers

What does marketing mix include?

Name, package, price, promotion, distribution. Signup and view all the answers

What are organizational problems that can lead to new product failure?

Not listening to consumer's voice, skipping steps in the new product process, and pushing poorly conceived products. Signup and view all the answers

What is the concept of Open Innovation?

Finding and executing creative new product ideas through strategic relationships with outside individuals and organizations. Signup and view all the answers

What indicates that a new product is considered truly revolutionary?

True Innovation Signup and view all the answers

What is a Failure Fee?

A penalty payment a manufacturer makes to compensate a retailer for failed sales. Signup and view all the answers

What can lead to poor execution of the marketing mix?

All of the above Signup and view all the answers

Study Notes

Product Definition

A product can be a good, service, or idea, either tangible or intangible.
Designed to satisfy consumer needs.
Exchanged for a unit of value, such as money.

Product Structure

Product Mix: Total number of product lines a company offers.
Product Line: A group of closely related products that meet similar consumer needs or are sold to the same customer group.
Product Item: A specific product within a product line characterized by brand, size, or price.

SKU (Stock-Keeping Unit)

A unique identification number that helps define an item for ordering and inventory purposes.

Classifying Products

Government and companies classify products for different reasons.
- Government focuses on industrial activity data.
- Companies aim to develop effective marketing strategies across their range of products.

Product Classification Methods

Types of User: Differentiates products as consumer goods or business goods.
Degree of Tangibility: Categorizes products into durable goods, non-durable goods, and services.

Consumer Goods Classification

Convenience Goods: Frequently purchased with minimal shopping effort (e.g., toothpaste).
Shopping Goods: Items compared on criteria like price and quality (e.g., electronics).
Specialty Goods: Unique items consumers specifically seek out (e.g., luxury watches).
Unsought Goods: Products consumers may not know about or initially want (e.g., insurance).

Business Goods Classification

Derived Demand: Sales of business goods depend on consumer goods demand.
Production Goods: Raw materials used in manufacturing.
Support Goods: Items aiding in the production of other goods, which include:
- Installations (fixed equipment),
- Accessory equipment (tools),
- Supplies (office products),
- Services (maintenance and advisory).

New Product Definition

Newness can be viewed relative to existing products, legal standards, and from the company and consumer perspectives.

Levels of Newness

From Existing Products: Changes in functionality or features.
Legally: Defined by industry regulations.
Company Perspective: Ranges from product line extensions to true innovations.
Consumer Perspective: Includes continuous, dynamically continuous, and discontinuous innovations.

Service Innovation Categories

Major Service Innovations: New products in undefined markets (e.g., FedEx).
Major Process Innovations: New delivery methods enhancing current services (e.g., online MBA programs).
Supplementary Services: Added elements to core services (e.g., valet services).

Reasons for New Product Failures

Poor differentiation, lack of proper market research, insufficient market attractiveness, execution failure, and timing issues.

New Product Process

Stage 1: New Product Strategy: Establishes innovation goals and guidelines.
Stage 2: Idea Generation: Involves brainstorming and suggestions from various stakeholders.
Stage 3: Screening & Evaluation: Filters viable ideas through criteria and concept tests.
Stage 4: Business Analysis: Evaluates the proposed product's alignment with company goals and forecasts financial outcomes.
Stage 5: Development: Prototyping and testing.
Stage 6: Market Testing: Limited-scale testing to gauge consumer reaction.
Stage 7: Commercialization: Full-scale launch, involving strategic positioning and managing production costs.

Market Testing Techniques

Test marketing, stimulated test markets, and virtual reality testing offer varied approaches to assess market readiness.

Crowd Sourcing & Open Innovation

Crowd sourcing collects insights from the public to enhance product ideas.
Open innovation encourages collaboration with external parties such as universities and small tech firms for creative product development.

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Description

Test your knowledge on key concepts from Chapter 10 of Marketing, focusing on the development of new products and services. This quiz includes essential terms and their definitions, helping you understand the product mix and product line. Perfect for students looking to reinforce their learning.