POM

Cards (44)

  • Product
    Tangible objects that a company sells to customers for their use or consumption
  • Services
    Intangible products that are directly delivered to customers by a company's employees
  • Products and services contribute to the customer's overall experience with a company
  • Levels of a product
    • Core product (benefit)
    • Actual product (tangible characteristics)
    • Augmented product (service-based add-ons)
  • Types of products
    • Consumer goods
    • Industrial goods
  • New product development
    1. Idea generation
    2. Idea screening
    3. Concept development and testing
    4. Market and business planning
    5. Product development
    6. Test marketing
    7. Commercialization or full product launch
  • The 4Ps of the marketing mix was introduced by E. Jerome McCarthy in 1960
  • 4Ps
    Product, price, placement, and promotion
  • 4Es
    Experience, everyplace, exchange, and evangelism
  • Experience (4Es)
    Paying attention to the overall customer journey and consumption experience
  • Everyplace (4Es)
    Making products available anytime and anywhere at the customers' convenience
  • Exchange (4Es)
    Considering the overall value that the product can provide to customers
  • Evangelism (4Es)
    Associating products with a mission or an ideal to inspire customers
  • Product development
    1. Concept developed into product prototype
    2. Marketing and research departments collaborate
    3. Months or years to create prototype and ensure it passes technical and commercial standards
  • Test marketing
    1. Product prototype tested with particular group of customers in specific location
    2. Reactions of customers gathered and analyzed
    3. Helps address any problems with marketability before official launch
  • Commercialization
    1. Soft launch - Product tested with limited customers, marketability and usability tested, limited 4Ps components used, price discounts and low-budget promotion
    2. Full-scale launch - Official launch, extensive 4Ps components used, sold at official price, heavily marketed
  • Product line
    Group of similar products offered by the same company under the same brand, may differ in sizes, variants, flavors, or types but all under a general class
  • Marketing a product line attracts more customers as they have varying preferences and needs
  • Marketers are expected to closely monitor the performance of each product in the product line, unprofitable ones are dropped to avoid losses and protect brand image
  • Product line can be extended by adding additional sizes and variants of the same product
  • Product life cycle
    Period of time a product is introduced, sold, and eventually removed from the market, composed of 4 stages: introduction, growth, maturity, decline
  • Introduction stage
    Product is launched in the market, companies spend to develop and introduce the product
  • Growth stage
    Product gains acceptance in the market, profits increase, product may be sold under different brands
  • Maturity stage
    Product has been in the market for a long time, competition increases, marketers face challenge of declining sales, attempt to address through improving features or cutting price
  • Decline stage
    Profits and sales continue to decrease, consumers favor new products, company may have to drop the product to avoid costs and low profits
  • Apple II product life cycle
    • Introduction - Launched in 1977, marketed for color monitor and graphics
    • Growth - Surge in sales with VisiCalc spreadsheet program, faced competition from TRS-80 and Commodore PET
    • Maturity - Faced tough competition from IBM PC, Apple introduced more advanced but less expensive versions
    • Decline - Sales steadily decreased, production discontinued as Apple focused on Macintosh
  • Services
    • Involve contact between customer and employee providing the service, sold differently than other products
  • Strategies for service firms
    1. Select and train employees to deliver excellent service
    2. Associate effective customer service with employee motivation
    3. Deliver high quality service to satisfy customers
    4. Build strong and loyal customer base through satisfied customers recommending the service
  • Price
    The set amount customers have to pay to purchase a product
  • Setting the price for a product
    1. Consider marketing objectives
    2. Consider research and development costs
    3. Consider market structure
    4. Consider elasticity of demand
    5. Consider laws
  • Cost-based pricing
    • Fixed and variable costs are determined as the basis of the selling price
    • A mark-up is then added based on the target sales volume
  • Perceived value pricing
    • Product's prices are set based on the customer's perceived value or the value the customer feels he or she will attain from the good
  • Competitive pricing
    • Prices of goods are set based on the competitors' prices on the same goods
  • Elastic demand
    Consumers respond to a change in price
  • Inelastic demand
    Consumers do not respond much to a change in price
  • Perfectly elastic demand
    A small change in price can significantly decrease the demand for a product
  • Perfectly inelastic demand
    Goods that experienced increased prices but can still elicit the same demand from consumers
  • Product bundle pricing
    • Individual products are put together to create one whole bundle or set which is then offered to customers
    • The resulting bundle is usually priced lower than the sum of the prices of the individual goods
  • By-product pricing
    • Utilizes the by-product of the main product and is priced along with or separate from the latter
    • Purpose is to either maximize the profit from the raw materials or to augment the price of the main product
  • Main or captive product pricing
    • The main product is charged a lower price but additional charges go with it