Marketing Product Concepts Quiz

International Business Marketing MARKEC04

• Course: International Business Marketing MARKEC04
• Cluster: A-cluster
• Year: 1st Year
• Semester: 1st Semester
• Lecture: 4
• Academic Year: 2024-2025
• Topic: Product and Promotion

Marketing: Real People, Real Choices

• Book Title: Marketing: Real People, Real Choices
• Edition: Eleventh Edition, Global Edition
• Chapter: 8 - Product I: Innovation and New Product Development

Learning Objectives

• Explain how value is derived through different product layers
• Describe how marketers classify products.
• Understand the importance and types of product innovations
• Show how firms develop new products
• Explain the process of product adoption and the diffusion of new innovations
• Be prepared to develop your personal value proposition

Build a Better Mousetrap... and Add Value

• "Build a better mousetrap and the world will beat a path to your door." - old adage
• Products are successful when they provide value
• Products are a bundle of attributes (features, functions, benefits, uses, brand & packaging)
• Woodstream Corp's "Little Champ" failed due to a lack of value proposition

Layers of the Product Concept

• A product represents all that a customer receives in an exchange
• Marketers distinguish among 3 product layers:
  • Core product
  • Actual product
  • Augmented product

Layers of the Product

• The Product: Basic benefits, features, package, brand, quality, appearance
• Core Product: Core benefits
• Actual Product: Features, packaging, brand, quality, appearance, design, functionality
• Augmented Product: Warranty, repair/maintenance, installation, customer support, delivery, credit, product instructions, additional services

How Do Consumers Buy Products?

• Marketers classify products based on where and how consumers buy them
• Similar to how consumer decisions vary in terms of effort (habitual, limited problem solving, extended problem solving)

Convenience Products

• Typically non-durable goods or services
• Purchased with minimal effort
• Examples include:
  • Staples (milk, bread)
  • Consumer packaged goods (CPGs), fast-moving consumer goods (FMCGs)
  • Impulse products
  • Emergency products
• Expected to be low-priced and widely available

Shopping Products

• Consumers spend time and effort on price, product attributes, and quality
• Examples include: computers, smartphones, appliances, and automobiles
• Consumers are more likely to compare alternatives

Specialty Products

• Unique characteristics are important to buyers at almost any price
• Consumers tend to be very loyal to known brands.
• Marketers need to make a significant effort to differentiate their products

Unsought Products

• Consumers have little awareness or interest until a need arises, often requiring extensive advertising
• Examples include: retirement plans, life insurance, and new tires for a car

Adoption Pyramid

• Reinforce choice with advertising, sales promotion, and communications
• Product availability, demonstrations, use information, samples
• Provide info, use teaser advertising, massive advertising
• Awareness, interest, evaluation, trial, adoption, confirmation (expected vs actual benefits/costs)

Categories of Adopters

• Innovators (2.5%): Extremely adventurous, risk takers, well-educated
• Early Adopters (13.5%): Concerned about social acceptance, heavy media users
• Early Majority (34%): Avoid being first or last, middle class, deliberate, cautious
• Late Majority (34%): Older, conservative, lower than average education and income
• Laggards (16%): Lower education and income, bound by tradition

Product Factors That Affect the Rate of Adoption

• Relative advantage
• Compatibility
• Complexity
• Trialability
• Observability

Characteristics of Innovations

• Relative advantage: Degree to which a consumer perceives a new product to offer superior benefits (greater relative advantage = faster adoption)
• Compatibility: Extent to which an innovation is consistent with existing cultural values, practices, customs, and norms
• Complexity: Degree to which consumers find a new product difficult to understand and use (higher complexity = slower adoption)
• Trialability: Ease of sampling a new product and its benefits (lower costs associated with trial usage can increase adoption rate)
• Observability: Degree to which others can see the new product and its benefits (higher visibility = more word-of-mouth communication

Marketing: Real People, Real Choices (Chapter 9)

• Product Strategy, Branding, and Product Management

Learning Objectives

• Discuss different product objectives and strategies
• Understand how firms manage products throughout the product life cycle
• Explain branding and packaging strategies that contribute to product identity
• Describe how marketers structure organizations for new and existing product management
• Understand how to manage your career to adapt and flourish

Mars Corporation

• A diverse conglomerate that produces food products (chocolate bars, pet food, etc.)

Product Planning: Develop Product Objectives and Product Strategy

• Effective product planning is a continuous process of product management (brand management)
• Product management is a systematic & team-based approach to coordinating all aspects of a product's strategy; development & execution

Figure 9.2 Objectives for Single and Multiple Products

• Introduces new products
• Regional product introduction nationally
• Product line extensions (stretching line by adding items, filling/adding sizes/styles)
• Contraction of a product line (dropping items)
• Increase width of product mix

Objectives and Strategies for Multiple Products

• Product line (firm's total offering to satisfy a target customer need)
• Product line length: the number of stock-keeping units (SKUs)
• Product line strategies:
  • Full-line vs. limited-line strategies
  • Upward, downward, or two-way lines stretches
  • Filling out or contracting a product line
  • Adding new varieties
  • Cannibalization (new product eats up existing product sales)

Product Mix Strategies

• A product mix is the total set of products a firm offers for sale.
• Width of product mix (number of different lines) is important to consider, as lines often share common characteristics.

Quality as a Product Objective: TQM and Beyond

• Product quality is the ability of a product to meet customer expectations
• TQM (total quality management) is a company-wide dedication to developing, maintaining, and improving all company operations.
• Philosophy calling for everyone to be actively involved in ensuring company operations meet high standards

Product Quality

• Degree of pleasure, durability, reliability, versatility, product safety, ease of use, and precision are factors of product quality and customer satisfaction

Marketing throughout the Product Life Cycle

• Many products have long lives, while others are short-lived fads.
• The product life cycle (PLC) explains how market response and marketing activities change over a product's life
• Introductions, Growth, Maturity, and Decline

The Product Life Cycle

• Introduction stage: few sales and little profit, recovery of R&D costs is important
• Growth stage: profit increases and peaks
• Maturity stage: sales peak, profit margins narrow (typically the longest stage of the product life cycle)
• Decline stage: market shrinks, sales fall, profits fall.

Introduction Stage of PLC

• New products from well-known brands often have an advantage
• Many products fail due to a lack of awareness
• Effective advertising and promotion is vital

Growth, Maturity, and Decline Stages of the PLC

• Growth: Product accepted, sales rapidly increase
• Maturity: Sales peak, profit margins narrow
• Decline: Sales decrease due to changing customer needs

Figure 9.5 Marketing Mix Strategies Throughout the Product Life Cycle

• Summarizes how product strategies adapt throughout the product lifecycle (introduction, growth, maturity, decline). Includes characteristic, product goals, sales, profits, pricing, and communication considerations.

It's Debatable

• Discussion question on how V8 and The Skinny Cow brand names stack up against criteria that distinguish a "good" brand name

What's in a Name (Or a Symbol)?

• Brand is a name, term, symbol, or design that identifies one firm's products
• A good brand name maintains relationships with customers and fits the target market

National and Store Brands

• National Brands are produced and marketed by a manufacturer
• Store brands are produced by a retail chain with their own trade name (Kirkland's, Sam's Choice, etc)

Generic Brands

• Generic branding presents a strategy of no branding
• Typically packaged in plain containers, sold at low prices; a popular choice in pharmaceuticals.

Licensing

• One firm sells another rights to use a brand name, symbol, or specific elements
• Often used for film properties (Star Wars, Disney, etc.) to license to multiple firms

Cobranding

• Two brands collaborate to market a new product
• Ingredient branding — branded materials become component parts of bigger products.

Packages and Labels: Branding's Little Helpers

• Package functions (protection, communication)
• Essential package communication about a product and its use.

Marketing: Real People, Real Choices (Chapter 13)

• Promotion I: Planning and Advertising

Learning Objectives

• Understand the communication process and the traditional promotion mix
• Describe the steps in traditional and multichannel promotion planning
• Explain advertising types, major criticisms, the development process, and evaluation
• Understand the elements of direct marketing
• Understand how to increase chances of getting a great job

Communication Models in a Digital World That Is "Always On"

• Marketing messages can assume many forms with objectives to inform, remind, persuade, or build relationships

Integrated Marketing Communications (IMC)

• IMC involves planning, execution, and evaluation of coordinated brand communication to target audiences
• Consistency is delivered across platforms (traditional, social media, etc.)
• Multichannel strategy combining traditional and digital activities

Three Models of Marketing Communication

• One-to-many (advertising, sales promotion, public relations)
• One-to-one (database marketing, direct marketing, personal selling)
• Many-to-many (buzz building, social media)

Personal Communications: The One-to-One Model

• Marketers prefer communicating on a personal level (personal selling, direct mail, telemarketing, direct marketing)

Mass Communications: The One-to-Many Model

• Marketers send messages to a mass audience
• Includes advertising, consumer sales promotion, and public relations

Communication Process

• Sources (company, individuals) encode messages
• Messages communicate through various mediums
• Receivers (consumers) decode messages
• Feedback/noise

Misunderstanding...

• Can involve negative communication or misunderstandings

The Promotion Mix

• Communication elements that marketers control
• Personal (one-on-one) communication (personal selling, direct marketing)
• Traditional Mass (mass audiences) communication (media advertising, sales promotion, public relations)
• Today the Internet adds powerful forms of advertising and marketing communication

Control Continuum

• Shows how high or low the marketer's control is over the message itself
• Moves from high (advertising) to low (word-of-mouth)

Steps to Develop the Promotion Plan

• Identify target audience(s)
• Establish communication objectives
• Determine and allocate the marketing communication budget
• Design the promotion mix
• Evaluate the effectiveness of the communication program

Step 1: Identify the Target Audience(s)

• Communication with more than just the target market (other stakeholders)
• Consumers learn from news media, friends/family, and competitors

Step 2: Establish the Communication Objectives

• Creating new customers through series of messages
• Consumers move closer to purchase/loyalty through various stages

Step 3: Determine and Allocate the Marketing Communication Budget

• Determine total budget
• Choose between a push and pull strategy
• Allocate budget within the promotion mix, including traditional and digital media advertising, support media advertising, sales promotions, social media marketing, direct marketing, personal selling, and public relations

Budget Decisions

• Top-down techniques: percentage-of-sales, competitive-parity, and objective-task
• Push vs. Pull strategy

Step 4: Design the Promotion Mix

• Determine communication tools
• Specify the communication message
• Determine communication channels

Step 5: Evaluate the Effectiveness of the Communication Program

• Various methods for monitoring and evaluating efforts
• Sales promotion is generally easy to evaluate, while advertising normally requires pre- and post-testing
• Measuring brand awareness, product benefits, and brand image is possible

Advertising

• Non-personal communication from identified sponsor using mass media.
• Advertising can date back to ancient Greece/Rome, but changes to the media landscape have made traditional mass media less effective.
• Mass media communications remain the primary option for reaching a large audience.

Owned, Paid, and Earned Digital Media

• Crucial for successful digital communication
• Owned media (controlled by company), Paid media (for potential customers), Earned media (word-of-mouth, consumer generated)

Where to Say It: Digital Media

• Owned media (websites, blogs, social media, etc.) controlled by the company
• Paid media (display ads, sponsorships)
• Earned media (social media buzz, word-of-mouth)

Website and Email Advertising

• Online advertising is an ongoing trend
• Website ads (banners, buttons, pop-ups)
• Email advertising (permission-based)

Social Media Advertising

• Advertising via social media channels (Facebook, Instagram, Twitter)
• Mobile advertising
• QR code advertising (uses smartphone GPS to deliver ads)
• Video sharing

Key Forms of Direct Marketing

• Direct communication to a customer designed to generate a response
• Includes mail order (catalogs, direct mail), m-commerce, telemarketing, and direct-response advertising

Mail Order and Direct Mail

• Catalogs are a collection of products
• Direct mail is a specific offer (brochure)

Telemarketing and M-Commerce

• Telemarketing uses the telephone to sell to customers and businesses
• FTC established a "Do Not Call" registry
• M-commerce uses mobile devices for promotions and e-commerce

Marketing: Real People, Real Choices (Chapter 14)

• Promotion II: Social Media Platforms and Other Promotion Elements

Learning Objectives

• Updated communication models incorporating social media & buzz marketing
• Sales promotion types (consumer & B2B)
• Personal selling steps & roles
• Public relations roles & campaign steps
• Importance of networking in a career

Social Media Marketing

• Consumers are influential in spread of product news/messages
• Many-to-many communication model (consumers talking to one another)
• Changing marketing communication landscape is called the "groundswell."

Social Networks

• Connect people
• Facebook is the most popular worldwide
• Marketers research consumer thoughts/brand perception
• Social networks provide a brand community (influential opinion leaders)

Buzz Marketing, Brand Ambassadors, and Evangelists

• Word-of-mouth, authentic communication
• Activities to create conversation/excitement
• Important part of the promotion mix
• Zealous customers as best salespeople

Viral Marketing

• Activities aimed at increasing brand awareness or sales via many-to-many communication
• Example: Apple using "Sent from my iPhone" in texts

Sales Promotion

• Programs to build interest/encourage purchase
• Identifiable sponsors (comparison to advertising)
• Typically has a more immediate short-term objective

Types of Consumer Sales Promotions

• Price-based: Coupons, price deals, rebates & refunds, frequency programs, special/bonus packs
• Attention-getting: Contests/sweepstakes, premiums, sampling

Trade Sales Promotions

• Discounts/deals, allowances, merchandising, case allowances, problems with allowances, forward buying, diverting, co-op advertising
• Increase visibility (trade shows, promotional products, point-of-purchase, push money)

Personal Selling

• Company representative interacts directly with customer
• Intimate form of promotion vs mass-media communication
• Salespeople are important in marketing

Public Relations (PR)

• Building relationships with various audiences (customers, stockholders, legislators)
• PR is more conscious and ongoing in today's context
• Everything a brand does impacts its relationship with the public