Product Concepts and Convenience Products Quiz

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Questions and Answers

What are the three distinct layers of the product concept?

Functional product, Emotional product, Tangible product

Core product, Actual product, Augmented product (correct)

Basic product, Brand product, Extended product

Intrinsic product, Extrinsic product, Peripheral product

What characterizes convenience products?

They are typically non-durable goods purchased with minimal effort. (correct)

They are always high-end luxury goods.

They are high-priced and require extensive consumer effort.

They require extensive research before purchase.

What is an example of a convenience product?

A luxury car

Fresh milk (correct)

A vacation package

An investment account

How do marketers classify products based on consumer buying behavior?

By the effort consumers put into making the purchase Signup and view all the answers

What does the term 'geofencing marketing' refer to in the context of convenience products?

Special offers based on geographical location. Signup and view all the answers

What type of products do consumers invest time and effort to gather information on before purchasing?

Shopping Products Signup and view all the answers

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

Easily available without planning. Signup and view all the answers

What are unsought products primarily characterized by?

Products consumers have little awareness of until a need arises. Signup and view all the answers

In the Adoption Pyramid, which stage involves customers evaluating the costs and benefits of a product?

Evaluation Signup and view all the answers

Which category of adopters is characterized by being cautious and preferring not to be first or last in the market?

Early Majority Signup and view all the answers

Which of the following is true about laggards in the adoption process?

They are bound by tradition and have lower education and income. Signup and view all the answers

Which factor affects the rate of adoption for new products?

Degree of product characteristics. Signup and view all the answers

What is the primary purpose of product management?

To coordinate all aspects of a product’s strategy development and execution Signup and view all the answers

Which of the following best describes a product line?

A firm’s total product offering designed to satisfy a single need or desire Signup and view all the answers

What does cannibalization refer to in product strategy?

Sales lost in existing products due to a new product’s sales Signup and view all the answers

How is product mix characterized?

By the total set of products a firm offers for sale Signup and view all the answers

What is an objective of total quality management (TQM)?

To achieve quality objectives through company-wide dedication Signup and view all the answers

What characterizes products in the introduction stage of the product life cycle?

Challenges in gaining market traction due to low awareness Signup and view all the answers

Which marketing strategy is essential for products in the introduction stage?

Effective advertising and promotion Signup and view all the answers

What is the risk associated with product line strategies?

Cannibalization of existing product sales Signup and view all the answers

What is typically true about products that become fads?

They experience a rapid rise and fall in market interest. Signup and view all the answers

What is the primary trade-off marketers face regarding message control?

Extent of message control versus perceived credibility Signup and view all the answers

Which step involves identifying who the message needs to reach, including stakeholders beyond just the target market?

Identify the Target Audience(s) Signup and view all the answers

What approach involves setting a budget based on a percentage of sales?

Percentage-of-Sales method Signup and view all the answers

In a push strategy, how does the company aim to promote its products?

By influencing channel members to stock their products Signup and view all the answers

Which of the following best describes the objective of communication in marketing?

To create a new customer through a series of messages Signup and view all the answers

Which method is NOT a bottom-up budgeting technique?

Competitive-parity method Signup and view all the answers

What does designing the promotion mix entail?

Determining communication tools and specifying the message Signup and view all the answers

Which of the following is a characteristic of the pull strategy?

Building consumer desire for products Signup and view all the answers

Which of the following statements accurately reflects the hierarchy of effects in marketing?

It outlines steps from awareness to loyalty. Signup and view all the answers

Study Notes

International Business Marketing MARKEC04

Course: International Business Marketing MARKEC04
Cluster: A-cluster (1st year, 1st semester)
Lecture: 4 (2024-2025)
Topic: Product and Promotion

Marketing: Real People, Real Choices

Textbook: Marketing: Real People, Real Choices (Eleventh Edition, Global Edition)
Author: Michael R. Solomon, Greg W. Marshall, Elnora W. Stuart
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, but not always true!
Woodstream Corp's "Little Champ" failed.
Products are successful when they provide value.
Products are a bundle of attributes (features, functions, benefits, and uses, as well as brand and packaging)

Layers of the Product Concept

A product represents all that a customer receives in an exchange.
Marketers distinguish among three distinct layers of the product:
- Core product
- Actual product
- Augmented product

Layers of the Product (Example: Automobile)

Basic benefits (transportation, carrying cargo, excitement, image enhancement)
Features (engine size, color, interior design, body size, body style, options, model name, workmanship)
Augmented product (warranty, repair/maintenance service, installation, customer support, delivery, credit, product-use instruction, parts and repair department, owner instruction manual, 2.9% interest auto loan, toll-free customer complaint number, customer problem policies, free lubrication and oil changes, etc.)

How Do Consumers Buy Products?

Marketers classify products based on where and how consumers buy them.
Consumer decisions differ in terms of decision making effort (habitual, limited, or extended problem solving).

Convenience Products

Typically non-durable goods or services bought with minimal effort.
Examples: staples (milk, bread), consumer packaged goods (CPG/FMCG), impulse products, geofencing marketing, emergency products.
Consumers expect convenience products to be low-priced and widely available.

Shopping Products

Goods and services for which consumers will spend time and effort to gather information on price, product attributes, and quality.
Examples include computers, smart phones, appliances, and automobiles.
Consumers are more likely to compare alternatives before they buy.

Specialty Products

Products with unique characteristics that are important to buyers at almost any price.
Require extensive problem-solving effort.
Marketers focus on making their products stand out.
Customers tend to be loyal to brands they have previously purchased and been satisfied with.

Unsought Products

Goods and services for which a consumer has little awareness or interest until a need arises.
Examples: retirement plans, life insurance, new tires for a car.
Often require advertising or personal selling to interest buyers.

Adoption Pyramid

Reinforce customer choices through advertising, sales promotion, and other communications.
Make the product available.
Provide product use information (demos, samples, trial-size packages).
Provide information to consumers.
May use teaser advertising.
Massive advertising.
Stages: Awareness, Interest, Evaluation, Trial, Adoption, Confirmation

Categories of Adopters

Innovators (2.5%), Early Adopters (13.5%), Early Majority (34%), Late Majority (34%), Laggards (16%)

Product Factors That Affect the Rate of Adoption

Relative advantage
Compatibility
Complexity
Trialability
Observability

Characteristics of Innovations

Relative advantage: a new product offering superior benefits
Compatibility: innovation is consistent with existing cultural values, customs, practices, and norms
Complexity: consumers view a new product as difficult to understand and use, which slows the rate of product adoption.
Trialability: ease of sampling a new product and its benefits
Observability: other people can see the new product and its benefits, driving word of mouth communication.

Product Strategy, Branding, and Product Management

Discusses different product objectives and strategies.
Explores how firms manage products throughout the product life cycle.
Explains how branding and packaging contribute to a product's identity.
Describes how marketers structure organizations for new and existing product management.
Provides insights on managing a career in the changing work environment.

Product Planning: Develop Product Objectives and Product Strategy

What makes one product succeed while another fails?
Effective product planning is guided by a continuous process of product and brand management.
Product management is a systematic approach to coordinating all aspects of a product’s strategy development and execution.

Objectives for Single and Multiple Products

Introduce New Products, Regional Product, Mature Product (upward, downward, two-way)
Product Line Extensions (stretching, filling, or contracting)
Product Mix (increasing product mix width)

Objectives and Strategies for Multiple Products

Product Line: firm’s total offering to meet a particular customer need
Product Line length: number of stock-keeping units (SKUs)
Product line strategies: Full-line vs limited-line
Strategies: upward, downward, two-way line stretch, filling out line, or contracting a product line, adding varieties to appeal to changing tastes, cannibalization

Product Mix Strategies

Product mix: total set of products a firm offers for sale.
Product mix width: number of different lines in product mix
Product lines in mix usually have some things in common.

Quality as a Product Objective: TQM and Beyond

Product quality: overall ability of a product to meet customer expectations.
Total Quality Management (TQM): company-wide dedication to development, maintenance, and continuous improvement of all aspects of company operations.
TQM helps companies achieve quality objectives.

Product Quality

Includes several aspects: Degree of Pleasure, Durability, Reliability, Versatility, Product Safety, Ease of Use, Precision, Satisfies Needs

Marketing throughout the Product Life Cycle

Many products have long lives, and others are fads.
The product life cycle (PLC) is a useful tool for explaining market response and marketing activities.

The Product Life Cycle

Stages: Introduction, Growth, Maturity, Decline
Introduction stage: no profits initially while recovering R&D costs
Growth stage: profits increase and peak
Maturity stage: sales peak, profit margins narrow (longest stage)
Decline stage: market shrinks, sales fall, profits fall

Introduction Stage of PLC

New products that are offshoots of well-known brands have an advantage.
Many products never make it out of the introduction phase due to low awareness.
Effective advertising and promotion is essential.

Growth, Maturity, and Decline Stages of the PLC

Growth stage: Product accepted, sales increase rapidly
Maturity stage: Sales peak, profit margins narrow, typically longest phase
Decline stage: Sales decrease as customer needs change, firm may drop product, try re-positioning, or reduce support.

Marketing Mix Strategies Throughout the Product Life Cycle

Introduction: Single company, single product, new product, low awareness, inform customers
Growth: New competitors, encourage brand loyalty, add features, increase pace, increase sales
Maturity: Mostly replacement products, attract new users, maintain market share
Decline: Reduce or maintain price, decide to keep or phase out product

Branding Strategies, Cobranding, National and Store Brands, Generic Brands, Licensing

Individual brands versus Family Brands
Cobranding: Two brands agree to work together
Ingredient branding: Branded materials become component parts of other products
National vs Store Brands: Manufacturer vs retail chain brands
Generic branding: No branding, sold at lowest price, popular in pharmaceuticals

Promotion Strategy: Planning and Advertising

Understanding the communication process and traditional promotion mix.
Steps in traditional and multichannel promotion planning.
Major types of advertising, criticisms, and campaign development methods.
Elements of direct marketing.
Increasing job perspectives with an effective resume and cover letter

Introduction and Overview

Communication Models in a Digital World.
Marketing messages take various forms (TV commercials, viral videos, blimps). Savvy marketers recognize each marketing mix element is communication. All marketing aims to inform, remind, persuade, or build relationships.
Integrated Marketing Communications (IMC)
Aims to deliver consistent messaging across platforms
Use a multichannel promotion strategy
Combine traditional marketing with social media and other online activities

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

Communicates on a personal level.
Direct mail, telemarketing, direct marketing

Mass Communications

Reaching a large audience simultaneously.
Advertising, consumer sales promotion, public relations

Communication Process

Source (encoding), Message, Medium, Noise (factors interfering with the communication), Receiver (decoding). Includes numerous communication tools (Magazines, Newspapers, Television, Radio, Billboards, Direct mail, word of mouth, internet and social media networks). Also encompasses Feedback (Purchase data, product awareness, brand loyalty).

Steps to Develop a Promotion Plan

Identify target audiences
Establish communication objectives
Determine and allocate marketing communication budget
Design the promotion mix
Evaluate the effectiveness of the communication program

Promotional Mix(Steps/elements)

Identifying target audiences, Establishing communication objectives, Determining and allocating marketing communication budget, Designing the promotion mix, Evaluating the effectiveness of the communication program.

Advertising

Non-personal communication from an identified sponsor using mass media.
Dates back to ancient Greece and Rome.
Changes in media landscape have affected its effectiveness.

Owned, Paid, and Earned Digital Media

Owned media: Websites, blogs, Facebook, Twitter (Controlled by company)
Paid media: Display ads, sponsorships, paid keywords (Similar to traditional advertising)
Earned media: Word-of-mouth, social media buzz (Most credible to consumers)

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Description

Test your knowledge on the distinct layers of the product concept, the characteristics of convenience products, and how they are classified in marketing. This quiz also covers the concept of geofencing marketing related to convenience products. Get ready to dive into consumer behavior and product definitions!