Marketing Products Overview

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Questions and Answers

What does product width refer to in marketing?

The number of different product lines a company offers (correct)

The total number of products a company has

The range of sizes available within a product line

The variety of flavors offered

What is a unique characteristic of services that makes them different from products?

They are generally more expensive

They cannot be seen or touched (correct)

They can be owned and sold

They are always high quality

What defines new-to-the-world products?

Products that improve existing offerings

Products introduced in new markets

Completely new products that create a new market (correct)

Products that are variations of current items

Which phase in the product development process involves creating a prototype?

Development Signup and view all the answers

What is the main marketing challenge associated with service variability?

Maintaining consistent quality Signup and view all the answers

What does commercialization mean in the product development cycle?

Full-scale launch of the product into the market Signup and view all the answers

Which of the following best defines product line extensions?

Introducing new items in the same product line Signup and view all the answers

Why is pricing critical for companies?

It influences customer purchasing habits Signup and view all the answers

What best defines a consumer product?

Products intended for personal use by consumers Signup and view all the answers

Which category of consumer products is characterized by frequent purchase with minimal effort?

Convenience products Signup and view all the answers

Which of the following is an example of a business product?

Raw materials Signup and view all the answers

What best describes a specialty product?

Unique items with strong brand loyalty Signup and view all the answers

Raw materials are defined as:

Basic materials used in the production of goods Signup and view all the answers

Which of the following is NOT a characteristic of shopping products?

Frequently purchased with little thought Signup and view all the answers

What does product mix refer to?

A variety of product lines offered by a company Signup and view all the answers

Which of the following best describes component parts?

Finished products that integrate into another product Signup and view all the answers

In which market condition do buyers typically have more power?

When there are many options available and high competition Signup and view all the answers

What is the primary relationship between price and revenue?

Revenue is calculated as price multiplied by quantity sold Signup and view all the answers

What does inelastic demand indicate about consumer behavior?

A small change in price results in a small change in quantity demanded Signup and view all the answers

What pricing strategy involves setting a high initial price and lowering it over time?

Price skimming Signup and view all the answers

Which of the following factors can decrease price sensitivity among consumers?

Strong brand loyalty and perceived quality Signup and view all the answers

What is the purpose of price penetration in marketing?

To attract customers quickly by pricing low in a competitive market Signup and view all the answers

Which of the following is NOT a function performed by distributors in the marketing channel?

Setting the final retail prices of products Signup and view all the answers

What characteristic defines elastic demand?

A change in price leads to a proportionately larger change in quantity demanded Signup and view all the answers

Which of the following is NOT a type of publicity a company may use?

Market research Signup and view all the answers

What is the primary goal of personal selling?

To engage with potential customers Signup and view all the answers

Which of the following is a disadvantage of using coupons?

Can erode profit margins Signup and view all the answers

What does developing sales force objectives involve?

Setting clear goals for the sales team Signup and view all the answers

What is a significant disadvantage of loyalty programs?

They can be expensive to maintain Signup and view all the answers

Which term refers to a brand's long-term plan for development and management?

Brand strategy Signup and view all the answers

What is one of the advantages of using samples as a promotional tool?

They allow customers to try before they buy Signup and view all the answers

Brand insistence primarily reflects what aspect of customer behavior?

Strong loyalty commitment to a specific brand Signup and view all the answers

Which of the following is an example of a product ethical issue?

Unsafe or harmful products being marketed to consumers Signup and view all the answers

What does price gouging refer to?

Unreasonably high prices set during emergencies Signup and view all the answers

What is a primary approach used to regulate deceptive marketing practices?

Government agency intervention Signup and view all the answers

How can top management create an ethical environment within their company?

Creating clear ethical guidelines and codes of conduct Signup and view all the answers

What does enlightened self-interest advocate for businesses?

Considering the well-being of stakeholders along with their own interests Signup and view all the answers

Which of the following is identified as a promotion ethical issue?

Deceptive advertising that misrepresents products Signup and view all the answers

What is a common deceptive practice in marketing?

Bait-and-switch tactics Signup and view all the answers

Which of these suggests a discriminatory pricing practice?

Setting higher prices for certain demographics Signup and view all the answers

Study Notes

What is a Product?

Products are goods, services, or ideas offered to satisfy wants or needs.
Products are tangible (physical) or intangible (services, experiences).

Consumer and Business Products

Consumer products are for personal use.
- Convenience products are frequently purchased with minimal effort (snacks, toiletries).
- Shopping products are compared based on price, quality, and style before buying (electronics, clothing).
- Unsought products are not actively sought out (life insurance).
- Specialty products have strong brand loyalty, consumers make a special effort to purchase them (luxury cars, designer handbags).
Business products (industrial products) are used by businesses to produce other products or resell.
- Raw materials are basic materials processed into products (timber, steel).
- Component parts are finished products that become part of another product (engines, tires).
- Process materials are used in production but are not easily identifiable in the final product (lubricants, chemicals).
- Accessory equipment helps in the production process but is not part of the final product (computers, tools).
- Installations are major capital items used in production (buildings, machinery).

Product Mix and Product Line

Product mix: The total range of products offered by a company.
Product line: A group of related products within a product mix.
Product line extension: Introducing additional items in the same product line (new flavors of a snack).
Product width: The number of different product lines offered by a company.
Product depth: The number of variations or options available within a product line (sizes, colors).

Services

Services are intangible offerings that cannot be owned or touched (healthcare, education).
Service characteristics:
- Intangibility: Services cannot be seen or touched, making evaluation difficult before purchase.
- Inseparability: Services are produced and consumed simultaneously (haircuts).
- Variability: Service quality varies depending on who provides it (different barbers).
- Perishability: Services cannot be stored for later use (missed flight).
Marketing challenges: Creating trust, managing quality consistency, effectively communicating benefits.

New Product Development

New-to-the-world products (discontinuous innovations): Completely new products that create a new market (smartphones).
New product lines: Products that a company has not previously offered.
Product line extensions: Adding new variations to existing product lines.
Improvements or revisions of existing products: Enhancements made to current products (upgraded software).
Repositioning: Changing the market's perception of a product.
Cost reductions: Strategies to lower production costs while maintaining product quality.

Product Development Stages

Idea Generation: Brainstorming new product ideas.
Screening and Evaluation: Assessing ideas to determine their potential success.
Development: Creating a prototype and developing the product.
Test Marketing: Launching the product in a limited market to gauge response.
Commercialization: Full-scale launch of the product into the market.

Pricing

Pricing affects profitability, market positioning, and competitiveness.
Influences consumer behavior.
Crucial element of the marketing mix.

Buyer and Seller Power

Buyers have more power when there are many options available, low switching costs, and high competition among sellers (saturated market).
Sellers have more power when they offer unique products, demand exceeds supply, or few suppliers exist (monopolistic or oligopolistic markets).

Price and Revenue

Revenue is calculated as price multiplied by quantity sold.
Increasing price may increase revenue unless the decrease in quantity sold offsets it.
Lowering prices may increase sales volume, potentially increasing revenue.

Price Elasticity

Price Elasticity: Measures how much the quantity demanded of a good responds to a change in price.
- Elastic Demand: A change in price leads to a proportionately larger change in quantity demanded.
- Inelastic Demand: A change in price leads to a proportionately smaller change in quantity demanded (essential goods).

Factors Decreasing Price Sensitivity

Strong brand loyalty.
Unique product features.
Lack of substitutes.
Perceived quality and value.
Necessity of the product.

Pricing Strategies

Price Skimming: Setting a high price initially and gradually lowering it over time (new, innovative products).
Odd Pricing: Pricing a product just below a whole number to make it seem cheaper (9.99insteadof9.99 instead of 9.99insteadof10).
Penetration Pricing: Setting a low price to enter a competitive market and attract customers quickly.

Marketing Channels

A set of interdependent organizations that help in the process of making a product or service available for use or consumption.
Distributors perform functions such as:
- Sorting: Arranging products into categories based on similar characteristics.
- Breaking Bulk: Dividing large shipments into smaller quantities for retailers.
- Maintaining Inventories: Storing products to ensure availability.
- Maintaining Convenient Locations: Making products accessible to customers.
- Providing Services: Offering additional services like delivery or installation.

Publicity

Types of publicity:
- Press Releases: Providing information to media outlets.
- Media Events: Hosting events to generate media coverage.
- Sponsorships: Supporting events or organizations to gain visibility.
- Community Engagement: Participating in community initiatives to build goodwill.
- Social Media Campaigns: Using social media platforms to reach target audiences.

Personal Selling and Sales Management

Personal Selling: Engaging with potential customers to persuade them to buy a product or service.
Sales Management: Planning, implementing, and controlling the sales strategy, including managing the sales force.

Sales Force Management

Developing Sales Force Objectives: Setting clear goals and targets for the sales team.
Determining Sales Force Size: Deciding how many salespeople are needed to meet objectives effectively.
Recruiting and Training Salespeople: Attracting suitable candidates and providing them with the necessary skills and knowledge.

Sales Promotion Tools

Coupons: Attract new customers, encourage repeat purchases.
Rebates: Incentivize larger purchases, promote brand loyalty.
Samples: Allow customers to try before they buy, can create buzz around a product.
Loyalty Programs: Encourage repeat business, build customer relationships.

Branding Strategy

Long-term plan for the development and management of a brand.
Defines how a brand will be perceived in the marketplace (identity, value proposition, differentiation).
Builds customer loyalty, enhances recognition, increases market share.

Brand Terms

Brand Recognition: Consumers identify a brand.
Brand Loyalty: Consumers consistently prefer a brand.
Brand Preference: Consumers prefer a brand over others.
Brand Equity: Value of a brand in the marketplace.
Brand Insistence: Consumers will not accept a substitute for a brand.

Ethical Issues in Marketing

Product Ethical Issues:
- Misleading labeling or false claims about product benefits.
- Unsafe or harmful products marketed to consumers.
Pricing Ethical Issues:
- Price gouging during emergencies.
- Discriminatory pricing practices that unfairly target certain groups.
Promotion Ethical Issues:
- Deceptive advertising that misrepresents products.
- Exploiting vulnerable populations in advertising (targeting children with unhealthy foods).
Supply Chain Ethical Issues:
- Poor labor practices or unsafe working conditions in suppliers.
- Environmental harm caused by sourcing practices.

Enlightened Self-Interest

Businesses achieve long-term success by considering the well-being of stakeholders (customers, employees, communities) alongside their own interests.
Ethical and responsible actions build trust and loyalty, ultimately benefiting the company.

Role of Top Management in Ethics

Top management establishes and promotes an ethical culture by:
- Modelling Ethical Behavior: Leading by example and demonstrating commitment to ethical practices.
- Establishing Policies: Creating ethical guidelines and codes of conduct for employees.
- Providing Training: Offering training programs on ethical decision-making and corporate social responsibility.
- Encouraging Open Communication: Fostering an environment where employees feel comfortable reporting unethical behavior.

Deceptive Marketing Practices

False advertising claims.
Bait-and-switch tactics.
Misleading pricing strategies (hidden fees).
Concealing negative information about a product.

Regulation of Deceptive Practices

Government Agencies: Organizations like the Federal Trade Commission (FTC) regulate advertising practices and enforce laws.
Industry Self-Regulation: Many industries have associations that establish ethical standards and guidelines.

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Description

This quiz covers the definition of products, including consumer and business products. Learn about the different types of products such as convenience, shopping, unsought, and specialty items. It also explores raw materials and component parts in business applications.