MKT exam 2

new product development

"The development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts."

idea generation

"The systematic search for new product ideas."

crowdsourcing

"Inviting broad communities of people—customers, employees, independent scientists and researchers, and even the public at large—into the new product innovation process."

idea screening

screening new product ideas to spot good ones and drop poor ones as soon as possible

"Product concept"

"A detailed version of the new product idea stated in meaningful consumer terms."

"Concept testing"

"Testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal."

"Marketing strategy development"

"Designing an initial marketing strategy for a new product based on the product concept."

"Business analysis"

"A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives."

product development

developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering

test marketing

the stage of new product development in which the product and its proposed marketing program are tested in realistic market settings

Commercialization

introducing a new product into the market

Customer-centered new product development

new product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences

Team-based new product development

new product development in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness

Product Life Cycle

"The course of a product's sales and profits over its lifetime."

Style

A basic and distinctive mode of expression.

fashion

a currently accepted or popular style in a given field

fad

a temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity

introduction stage

the PLC stage in which a new product is first distributed and made available for purchase

growth stage

the PLC stage in which a product's sales start climbing quickly

maturity stage

the PLC stage in which a product's sales growth slows or levels off

decline stage

the PLC stage in which a product's sales fade away

price

"The amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service."

Customer value-based pricing

setting price based on buyers' perceptions of value rather than on the seller's cost

Good-value pricing

offering just the right combination of quality and good service at a fair price

Value-added pricing

attaching value-added features and services to differentiate a company's offers and charging higher prices

cost-based pricing

setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk

fixed costs (overhead)

costs that do not vary with production or sales level

variable costs

costs that vary directly with the level of production

total costs

the sum of the fixed and variable costs for any given level of production

experience curve (learning curve)

the drop in the average per-unit production cost that comes with accumulated production experience

cost-plus (markup-pricing)

adding a standard markup to the cost of the product

Break-even pricing (target return pricing)

setting price to break even on the costs of making and marketing a product, or setting price to make a target return

competition-based pricing

setting prices based on competitors' strategies, prices, costs, and market offerings

target costing

pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met

demand curve

A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged

price elasticity

a measure of the sensitivity of demand to changes in price

Market-skimming pricing

setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales

market-penetration pricing

setting a low price for a new product in order to attract a large number of buyers and a large market share

product line pricing

setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors' prices

optional product pricing

the pricing of optional or accessory products along with a main product

captive-product pricing

setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console

by-product pricing

setting a price for by-products to help offset the costs of disposing of them and help make the main product's price more competitive

product bundle pricing

combining several products and offering the bundle at a reduced price

discount

A straight reduction in price on purchases during a stated period of time or of larger quantities

allowance

promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way

segmented pricing

selling a product or service at two or more prices, where the difference in prices is not based on differences in costs

psychological pricing

pricing that considers the psychology of prices and not simply the economics; the price is used to say something about the product

reference prices

prices that buyers carry in their minds and refer to when they look at a given product

promotional pricing

temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales

geographical pricing

setting prices for customers located in different parts of the country or world

FOB origin pricing

pricing in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination

uniform delivered pricing

pricing in which the company charges the same price plus freight to all customers, regardless of their location

zone pricing

Pricing in which the company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price

basing-point pricing

pricing in which the seller designates some city as a basing point and charges all customers the freight cost from that city to the customer

freight absorption pricing

pricing in which the seller absorbs all or part of the freight charges in order to get desired business

dynamic pricing

adjusting prices continually to meet changing conditions and situations in the marketplace

personalized pricing

adjusting price in real time to fit individual customer needs, situation, location, and buyer behavior

Market Segmentation

"Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes."

Market targeting (targeting)

"Evaluating each market segment's attractiveness and selecting one or more segments to serve."

Differentiation

"Actually differentiating the market offering to create superior customer value."

positioning

"Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers."

geographic segmentation

"Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods."

demographic segmentation

"Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation."

Age and life-cycle segmentation

"Dividing a market into different age and life-cycle groups."

gender segmentation

"Dividing a market into different segments based on gender."

Income segmentation

"Dividing a market into different income segments."

psychographic segmentation

"Dividing a market into different segments based on lifestyle or personality characteristics."

behavioral segmentation

"Dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product."

occasion segmentation

"Dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item."

benefit segmentation

"Dividing the market into segments according to the different benefits that consumers seek from the product."

Intermarket (cross-market) segmentation

"Forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries."

target market

"A set of buyers who share common needs or characteristics that a company decides to serve."

undifferentiated (mass) marketing

"A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer."

differentiated (segmented) marketing

"A market-coverage strategy in which a firm targets several market segments and designs separate offers for each."

Concentrated (niche) marketing

"A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches."

micromarketing

"Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing."

local marketing

"Tailoring brands and marketing to the needs and wants of local customer segments—cities, neighborhoods, and even specific stores.

individual marketing

"Tailoring products and marketing programs to the needs and preferences of individual customers."

product position

"The way a product is defined by consumers on important attributes—the place it occupies in consumers' minds relative to competing products."

competitive advantage

"An advantage over competitors gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices."

value proposition

"The full positioning of a brand—the full mix of benefits on which it is positioned.

positioning statement

"A statement that summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point of difference)."

product

"Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need."

service

"An activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything."

consumer product

"A product bought by final consumers for personal consumption."

convenience products

"A consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort."

shopping product

"A consumer product that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style."

speciality product

"A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort."

unsought product

"A consumer product that the consumer either does not know about or knows about but does not normally consider buying."

industrial product

"A product bought by individuals and organizations for further processing or for use in conducting a business."

social marketing

"The use of traditional business marketing concepts and tools to encourage behaviors that will create individual and societal well-being."

product quality

"The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

brand

"A name, term, sign, symbol, or design or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors."

packaging

"The activities of designing and producing the container or wrapper for a product."

product line

"A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges."

Product mix (or product portfolio)

"The set of all product lines and items that a particular seller offers for sale."

service intangibility

"Services cannot be seen, tasted, felt, heard, or smelled before they are bought."

service inseparability

"Services are produced and consumed at the same time and cannot be separated from their providers."

service variability

"The quality of services may vary greatly depending on who provides them and when, where, and how they are provided.

service perishability

"Services cannot be stored for later sale or use."