MAR 3023 EXAM 3 FSU BRADY Answered 100% Correct

What is a Product? - ANSWER-A product is good, service, idea ( or a combination of two or more of these) Includes supporting services: installations, guarantees, warranties Goods - ANSWER-A tangible, physical entity Service - ANSWER-An intangible, result of application of human and mechanical efforts to people or objects (hybrids) Ideas - ANSWER-concept, philosophy, image or issue Consumer Products - ANSWER-Purchased to satisfy personal and family needs and are classified according to how buyers generally behave when purchasing them. Convenience products - ANSWER-relatively inexpensive, frequent Shopping products - ANSWER-more effort in planning/purchasing Specialty products - ANSWER-unique characteristics and very expensive Unsought products - ANSWER-tow trucks, emergency, basically things you only get last minute Business Products - ANSWER-Purchased to use for operations, to resell, or to use in manufacture of all other products. - most products are produced in the U.S are for other businesses Core products - ANSWER-Are the physical or tangible service that the customer receives Ex. Generic product or service Branded Products - ANSWER-Are the the core products plus the characteristics that allow the consumer to differentiate it from similar products Ex. packaging, features, brand name, quality, styling Augmented products - ANSWER-Have characteristics that enhance value beyond that of the core and branded Ex. delivery, repairs & service, installation, and Warranty Product mix - ANSWER-A product mix is all of the products a company sells Product line - ANSWER-Consists of the closely related products marketed by an organization Product line depth - ANSWER-The number of items in a product line Product Line Width (Breadth) - ANSWER-The number of different lines that a company or SBU markets Product Life Cycle - ANSWER-1. Introduction 2. Growth 3. Maturity 4. Decline Introduction - ANSWER-Low sales, high costs, No profits Growth - ANSWER-Increasing sales, reducing costs, some profits Maturity - ANSWER-Constant sales, reducing costs, increasing profits Decline - ANSWER-Reducing sales, constant costs, reducing profits Several kinds of product life cycles are possible: - ANSWER-High-Technology products, fads, and styles or fashions Extending the Product Life Cycle: - ANSWER--Selling to new segments -Stimulate more frequent use -Encourage more use per occasion -Promoting more varied use Repositioning - ANSWER-Changing a products use Ex. Arm and Hammer, use ot be used as a cooking product, now its used for scent in the fridge Improvements - ANSWER-Modifications to product formulas or service processes Ex. Coca-cola to Coke zero sugar New Product Development (NPD) is risky - ANSWER-Less risky alternatives: *Line extensions- product developed is closely related to one or more (successful) products in existing product line but specifically designed to meet a somewhat different need Up-Market extensions - ANSWER-new product that are more expensive Down-Market extensions - ANSWER-new products that are less expensive Brand extensions - ANSWER-Product developed is not closely (but should still be somewhat) related to one or more products in existing product line New Product Development (NPD) is risky Less risky alternatives: - ANSWER-Less risky alternatives: *Product modifications- product modification means changing one or more of the product's characteristics; different from line extensions because the original product is removed from product line Cost Reduction (Quality Modification) - ANSWER-*Changing dependability and/or durability of a product *Altering materials or the production process *Products at a lower price *Products at Same Price at Lower Manufacturing costs Functional Modifications - ANSWER-*Changes that impact versatility, effectiveness, convenience, or safety of the product *Usually requires redesign of the product The 7 steps to Develop New Products - ANSWER-1. Idea Generation 2. Idea Screening 3. Concept Testing 4. Business Analysis 5. Development of Physical Product 6. Beta and Market Testing 7. Product Launch Idea Generation - ANSWER-*Crowdsourcing- big companies letting consumers vote on new product *Neurofocus Focus found that Cheetos lovers actually like the orange mess on their fingers Idea Screening - ANSWER-Ex. Shark Tank or Focus Concept Testing - ANSWER-What will my market think? Focus Group Business Analysis - ANSWER-How much will it cost to produce? How much will consumers pay for it? How will this affect profits? Test Markets - ANSWER-Certain areas that test new products to see if they'll expand and launch Product Launch - ANSWER-Launching new products finally 80% fail unfortunately Product Adoption Process - ANSWER-1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption Awareness - ANSWER-Buyer becomes aware of the product Interest - ANSWER-Buyer seeks information and is receptive to learning about the product Evaluation - ANSWER-Buyer considers product's benefits and decides to try it Trial - ANSWER-Buyer examines, tests, or tries the product to determine if it meets his or her needs Adoption - ANSWER-Buyer purchases the product and is expected to use it again whenever the need for this general type of product arises New Product Adoption - ANSWER-1. Innovators 2. Early Adopters 3. Early Majority 4. Late Majority 5. Laggards Innovators - ANSWER-First to adopt new product Early Adopters - ANSWER-Choose new products carefully, help spread word-of-mouth Early Majority - ANSWER-Adopt just prior to average person Late Majority - ANSWER-Skeptics who adopt new products when they feel it is necessary Laggards - ANSWER-Last to adopt a new product The Psychology of New Products.Three reasons People don't adopt: - ANSWER-1.Losses versus Gains 2.The Endowment effect 3. Status Quo Bias Losses Versus Gains - ANSWER-Losses have a far greater impact on consumers than similarly sized gains -AKA: "Loss aversion" - Accounts for why consumers prefer even suboptimal existing products that they know over trying a new one The Endowment Effect - ANSWER-People value products they already possess more than products they could buy -People demand 2-4 times more to give up products they already possess than they are willing to pay to obtain these items in the first place -May explain why consumers value brands they own over trying a new one Status Quo Basis - ANSWER-People tend to stick with what they have even if a better alternative exists -May explain why consumers prefer to fix an old product instead of buying a new one Services: What are They? - ANSWER-A "deed, process, or performance." Some Overlap: Service Exists in ALL physical Goods too. -"customer service" in support of manufacturing goods *ordering -Distribution of Physical Goods *even bulk goods have service - Return of Defective Goods Why are they important? - ANSWER-Approximately 82% of Total U.S Employment Factors Contributing to Growth in Services - ANSWER--Aging population- Baby boomers *Longer life expectancies -Increased leisure time -high per capita income *Discretionary income -Changing social and cultural values Characteristics of Services: The "Big Four" - ANSWER-1. Intangibility 2. Perishability 3. Inseparability 4. Heterogeneity (Variability) Intangibility - ANSWER-Lack of tangible assets which can be seen, touched, or smelled prior to purchase Perishability - ANSWER-Inability of a service to be inventoried or stored Inseparability - ANSWER-Simultaneous production and consumption of a service