Exam 3

  1. Organizational (business) Markets
    • buyers of goods and services to be used in the production of goods and services, used in daily operations, or goods resold to someone else
    • Not private use
  2. Business Markets include:
    producer, re-seller, government, and institutions
  3. Raw Materials
    • Unprocessed
    • Typically few large producers
    • Little product differentiation
    • Little advertising, only for refined product
    • ie: Crude Oil
  4. Istallations
    • Office buildings, factories, machinery, large tools
    • Significant impact on product
  5. Accessory Equipment
    • Help in production
    • Ie: Word processor
  6. Component Parts
    • Incorporated directly into the physical product being produced
    • Can be seen
    • Ie: Spark plugs
  7. Process Materials
    • Directly incorporated in manufactured products, but cannot be identified
    • Ie: Corn syrup in soda
  8. Supplies (MRO items)
    • Maintenance, repair, operating supplies
    • Ie: pens, computer paper
  9. Services
    Ie: legal accounting, marketing research
  10. Derived Demand
    • Demand based upon or derived from the demand for consumer goods
    • Ie: Steel demand derived from demand for cars
  11. Joint Demand
    • Demand for two or more products are interdependent
    • Ie: More machines, more demand for lubricants
  12. Inelastic Demand
    • Not responsive to changes in price
    • In business, demand tends to be inelastic
    • Consumers can make a switch to other products
  13. Fluctuations
    • Greater in business market
    • Reciprocity very important in business environment
  14. Buying Center
    • is the people within an organization who make business purchase decisions
    • 5 roles
  15. 5 Roles in Buying Center
    • User
    • Influencer
    • Buyer
    • Decider
    • Gatekeeper
  16. User
    • Person using the product
    • Ie: students using books
  17. Buyer
    Make purchase decision
  18. Decider
    Decides which supplier to use
  19. Gatekeeper
    Controls flow of information
  20. 3 Types of Organizational Purchases
    • Straight Rebuy
    • Modified Rebuy
    • New Task Buying
  21. Straight Rebuy
    ie: If you own a restaurant and coke is doing well, would not switch to Pepsi
  22. Modified Rebuy
    • Not so happy
    • Ie: Looking into a different travel agency if they mess up your flight
  23. New Task Buying
    Easier to sell something they've never bought before
  24. Government Markets
    • 20% of GDP
    • Many things done on bidding
  25. Resellers
    Ie: Retailers, wholesales, institutions (churches, sororities)
  26. Sole Sourcing
    Using only one supplier
  27. Product
    A bundle of tangible and intangible attributes that a seller offers
  28. Product Classification
    Based on consumer search characteristics (4 categories)
  29. 4 Product Classification Categories
    • Convenience Product
    • Shopping Product
    • Specialty Product
    • Unsought Product
  30. Convenience Product
    Something you buy w/ minimum effort
  31. Shopping Product
    • Something you're willing to shop around for
    • Ie: GAP
  32. Specialty Product
    Product you're willing to make a special effort to find and purchase
  33. Unsought Product
    • Product you don't want because you don't know they exist
    • Ie: Life insurance for 20 year old
  34. *Product Mix
    Total set of products a company sells
  35. Consistency
    • The inter-relatedness of product lines
    • Ie: Pepsi buying out Quaker Oats
  36. Breadth
    The number of different product lines in the product mix
  37. Depth
    The number of items w/in each product line
  38. Product Life Cycle
    Represents the stages a product moves through from its introduction to the market to its disappearance
  39. Product Life Cycle (Graph)
    • Want products in growth stage longest
    • Get present customers to buy more
    • Find new uses
    • Find new customers
    • Profits peak in growth, Sales peak in maturity
  40. Product Audit
    Regularly scheduled evaluation of the existing products in the product mix
  41. Line Extension
    • A product that is closely related to existing products in the line, but meets different customer needs
    • Ie: different types of colgate
  42. Product Modification
    • Changing one or more characteristics of the product
    • The original product does not stay on the line
    • Ie: Designing thunder bird car over the years
  43. Product Deletion
    Process of deleting a product from the product mix when it no longer satisfies a sufficient number of customers
  44. 3 Approaches to Product Deletion
    • Phase-out Approach
    • Run-out Policy
    • Dropping
  45. *Phase-Out Approach
    let the product decline
  46. *Run-out Policy
    Exploits any strengths left in the product
  47. Dropping
    Taking it off the market bc losses are that great
  48. Product Manager
    Responsible for a product, product line, or several distinct products
  49. Brand Manager
    Responsible for a single brand
  50. New product venture team (matrix)
    • 2 bosses, a product, & something else
    • consider 2 concepts of a product
  51. New Product Development Process Stages (7)
    • Idea Generation
    • Screening
    • Concept Development
    • Business Analysis
    • Product Development
    • Test Marketing
    • Commercialization
  52. Idea Generation
    Come up w/ ideas
  53. Screening
    Get rid of ridiculous ideas
  54. Concept Development
    Asking people what they think of the concept
  55. Product Development
    Actually making the item
  56. Test Marketing
    • Introducing your product before going nationwide
    • Pioria, IL used, representative of US
  57. Commercialization
    Product introduced nationwide, full scale marketing
  58. Jamming
    Offsetting new competitor products w/ promotions or other products
  59. Adoption Process
    5 series of steps a buyer goes through in deciding to try and then regularly use a new product
  60. Adoption Process (5 Steps)
    • Awareness
    • Interest
    • Evaluate
    • Trial
    • Adoption
  61. Adopter Categories (5)
    • Innovators
    • Early Adopters
    • Early Majority
    • Late Majority
    • Laggards
  62. Innovators
    • 2.5%
    • Young, educated
    • Use scientific sources to reach
  63. Early Adopters
    • 13.5%
    • Use sales force more than any other group
  64. Early Majority
    • 34%
    • Get information from mass media
  65. Late Majority
    • 34%
    • Older People
  66. Laggards
    • 16%
    • Often oriented to the past
    • Hard to get people to switch
  67. Brand
    a symbol, design, name or term that uniquely identifies a seller's product
  68. Brand Name
    The part of the brand that can be voiced
  69. Brand Mark
    • Part of a brand that can be seen but not voiced
    • ie: Nike swoosh
  70. Trademark
    Brand name and/or brand mark that the seller has exclusive legal right to use
  71. Trade Name
    Legal name of an organization
  72. Manufacturer's Brand
    ie: Levi, Guess
  73. Reseller's Brand
    Owned by a retailer or wholesaler
  74. Individual Branding
    • Give each item a separate brand name
    • Each product in product mix different brand name
  75. Family Branding
    • Using a single brand name for many products
    • Ie: Coke, Diet Coke, Cherry Coke...
  76. Brand Extension
    • Putting product name on a different product category
    • Ie: Ivory soap to ivory shampoo
    •      Bic pens to Bic lighters
  77. Brand Equity
    The marketing and financial value associated with a brand's strength in a market
  78. Packaging
    Over $50 billion industry
  79. Secondary use packaging
    Packing that will be reused
  80. Category Consistent
    • Packaged in line w/ packaging practices associated with a certain product category
    • Ie: Mustard container
  81. Innovative Packaging
    • Product packaging is unique
    • Ie: No drip laundry detergent
  82. Multiple Packaging
    Ie: Pepsi Cube
Card Set
Exam 3
Ch. 8, 11, 12, 14