Marketing 305 ch. 11 & 12

  1. 4 product life cyle stages
    • - introduction
    • - growth
    • - maturity
    • - decline
  2. occurs when a product is introduced to its intended market
    • introduction stage
    • - sales grow slowly
    • - profit is minimal
  3. stage of product life cycle characterized by rapid increases in sales
    • growth stage
    • - competitors appear
    • - product sales in growth stage grow at an increasing rate
  4. stage is characterized by a slowing of total industry sales or product class revenue
    maturity stage

    - sales increase a a decreasing rate
  5. stage when sales drop
    • decline stage
    • - companies wil either use deletion or harvesting
  6. deletion?
    dropping the produt from the companies product line, the most drastic strategy
  7. harvesting?
    when a company retains the product, but reduces marketing costs
  8. 3 impotant aspects of product life cycles
    • 1. their length
    • 2. the shape of their sales curves
    • 3. the rate at which consumers adopt products
  9. which has a shorter ife cycle, consumer products or business products?
    consumer products
  10. technological change tends to ______ product life cycles
  11. fashion products?
    is the style of the times

    ie: womens and mens apparel
  12. fad products
    • experiences rapid sales on introduction then an equally rapid decline
    • products are typically novelties and have a short life cycle
  13. several factors whch affect whether a consumer will adop a new product or not
    • - usage barriers
    • - value barriers
    • - risk barriers
    • - psychological barriers
  14. advertising plays a major role in the ________ stage of the product life cycle, and _________ plays a major role in maturity
    • A. introduction stage
    • B. product differentiation
  15. how do high-learning and low-learning products differ
    high learning products require significant customer education and have an extended introductory period, while low-learning product sales begin immediately because little learning is required
  16. what does a product manager do?
    • they are responsible for managing existing products through the stages of the life cycle.
    • also include approving ad copy, media selection, and packaging design
    • they also engage in extensive data analysis related to their products and brands
  17. product modification involves.....
    altering a products characteristic such as its quality, performance, or appearance, to increase the products value to customers and increase sales
  18. ________ changes the place a product occupies in a consumers mind relative to competitive products
    product repositioning
  19. __________ involves adding value to the product or line through additional features or higher-quality materials
    trading up
  20. a set of human characteristics associated with a brand name
    brand personality
  21. the first step to creating brand equity
    develop positive brand awareness and an association of the brand in consumers minds
  22. 2nd step in creating brand equity
    establish a brands meaning in he minds of consumers
  23. 3rd step in creating brand equity
    elicit the proper consumer respones to a brands identity and meaning
  24. final step in creating brand equity
    also the most difficult, is to create a consumer brand connection evident in and intense, active loyalty relationship between consumers and the brand
  25. _______ is a contractural agreement whereby one company allows its brand name or tradmarks o be used with products or services offered by another company for a royalty or fee
    brand licensing
  26. 5 criteria when selecting a good brand name
    • 1. the name should suggest the product benefits
    • 2. the name should be memorable distinctive, and positive
    • 3. the name should fit the company or product image
    • 4. the name should have no legal or regulatory restritions
    • 5. the name should be simple, and emotional
  27. a company who uses one name for all its products in a product class is...
    multiproduct branding
  28. multibranding involves?
    giving each product a distinct name
  29. packaging and labeling accounts for about ___ cents of every dollar spent by consumers for products
  30. off peak pricing
    consist of charging different prices during different times of the dy or days of the week to reflect variations in demand for the service
  31. ____ is the money or other considerations exchanged fo the ownership or use of a good or service
  32. price equation is?
    price = list price - incentives and allowances + extra fees
  33. _____ is the ratio of perceived benefits to price

    value = perceived benefits / price
  34. profit equation?
    profit = total revenue - total cost
  35. settig the highest initial price that customers really desiring the product are willing to pay is?
    skimming pricing
  36. setting a low initial price on a new product to appeal immediately to the mass market is?
    penetration pricing
  37. prestige pricing is
    setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it
  38. odd- even pricing is?
    setting prices a few dollars or cents under an even number
  39. manufacturer deliberately adjusting the compositon and features of a product to achieve the target price to consumers
    target pricing
  40. marketing of two or more products in a single package price
    bundle pricing
  41. the charging of different prices to maximize revenue for a set amount of capacity at any given time
    yield management pricing
  42. adding a fixed percetnage to the cost of all items in a specific product class
    standard markup pricing
  43. summing the total unit cost of providing a product or service and adding a specific amount to the cost to arriv at a price
    • cost-plus pricing
    • the most commonly used method to set prices or business proucts
  44. when a firm sets an annual target of a specific dollar volume of profit
    target profit pricing
  45. set prices that will give them a profit that is a specified percentage of the sales volume
    target return-on-sales pricing
  46. set prices to achieve a return on investment
    target return on ivestment pricing
  47. market price of a product is
    what customers are generally willing to pay
  48. deliberately selling a product below its customary price to attract attention to it
    loss-leader pricing

    not to increase sales, but to attract customers in hopes they will buy other products as well
  49. a graph relating the quantity sold and the price, which shows the maximum number of units that ill e sold at a given price
    demand curve
  50. price elasticity of demand is
    percentage change in quantity demanded relative to a percentage change in price
  51. a product with elastic demand i one in which...
    a slight decrease inprice results in a relatively largeincreas in demand, or units sold
  52. a product with inelastic demand means...
    that slight increases or decreases in price will not significantly affect the demand or units sold
  53. costs
    the monies the firm pays out to its employees and suppliers

    includes: total cost, fixed cost, variable cost, and unit variable cost
  54. total cost
    • the total expense incurred by a firm in producing and marketing a product.
    • the sum of fixe cost and variable cost
  55. fixed cost
    sum of al expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold

    ie - rent on building, executive salaries, and insurance
  56. variable costs
    sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold

    ie - direct labor direct materials used in producin the product, and the sales commission tied directly to the quantity sold
  57. unit variable costs
    expressed on a per unit basis

    UVC = VC / Q
  58. break even point
    the quantity at which total revenue and total cost are equal

    FC / P - UVC
  59. factors that limit the rangeof price a firm ay set are
    pricing constraints
  60. price fixing
    conspiracy among firms to set pricesfor a product

    illegal under the sherman act
  61. bait and switch
    when a firm offers a very low price on a product to attract customers to a store, once in the store, the customer is persuaded to purchase a higher-priced item using a variety of tricks, including degrading the promoted item, and not having the promised item in stock or refusing to take orders for it
  62. setting different prices for products and services depending on individual buyers and purchase situation in light of demand, cost, competitive factors
    flexible-price policy
  63. allowances
    are reductions from list or quoted price to buyers fr performing some activity
  64. promotional allowances
    qualify by understaking certain advertising or selling activities to promost a product
  65. 3 steps in seting the final price
    • 1. select an approximate price level
    • 2. set the list or quoted price
    • 3. make special adjustments to the list or quoted price
Card Set
Marketing 305 ch. 11 & 12
study questions for chapters 11 and 12