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USC / Marketing / MKT 350 / What are the factors influencing the rate of adoption?

What are the factors influencing the rate of adoption?

What are the factors influencing the rate of adoption?

Description

School: University of South Carolina
Department: Marketing
Course: Principles of Marketing
Professor: Courtney worsham
Term: Fall 2016
Tags: Marketing
Cost: 50
Name: MKTG 350 Exam 3 Study Guide
Description: marketing 350 worsham exam 3 study guide
Uploaded: 11/01/2016
4 Pages 18 Views 8 Unlocks
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MKTG 350


What are the factors influencing the rate of adoption?



Test 3 Study Guide

Chapter 11 

SKU: Stock Keeping Unit; information from each location to segment customers and  create personalized store assortments  

Product Mix: complete set of all products and services offered by a firm; consists of  different product lines

Product Line: groups of associated items that consumers use together or think of as  part of a group of similar products or services

Breadth: product MIX has breadth: count of the number of product lines offered Depth: product LINE has depth: number of products within a product line

Brand ownership – all categories

Manufacturer/national brands: owned and managed by manufacturer (Nike,  Coca Cola, KitchenAid, Sony) manufacturer develops merchandise, ensures consistency  and quality, retain more control


Product life cycle means what?



Private labels/store brands: products developed by retailers

Premium: intention of competing with national brand

Generic: lowest of the low, basic

Copy-cat: make packaging look like national brand

Family brands: use its own corporate name to brand all product lines and  products (Kellogg’s Rice Krispies, Kellogg’s Special K, Kellogg’s Eggo) benefits from brand awareness

Individual brands: Using different names for each product (Kellogg’s allows  Morningstar Farms, Famous Amos, Keebler Cookies, and Cheez-Its to keep individual  names)

Branding – key features: brand name, logo/symbols, characters, slogans, jingles, URLs Brand equity: value of a brand; set of assets/liabilities linked to a brand that contribute  to value of product/service


What motivates a cash discounts?



Brand extensions: the use of the same brand name in a different product line (increase in breadth) (Crest sells a variety of dental hygiene products and not just toothpaste) Brand dilution: brand extension negatively impacts consumer perceptions about the  brand Don't forget about the age old question of What are the five ways to identify witches?

Brand licensing: contractual agreement between firms that where one firm allows the  other to use its brand name, logo, symbols, or characters for a negotiable fee (Common  for toys, video games, apparel, etc.)

Co-branding: marketing of two or more brands together on the same package,  promotion, or store (Taco Bell and Pizza Hut and KFC)

Repositioning: changing a brand’s focus to target new markets or realign the brand’s  core emphasis with changing market preferences  

Packaging and labeling: primary package: the one a consumer uses (toothpaste tube) secondary package: wrapper or exterior carton and provides UPC. Product labeling  provides consumer with necessary information for purchase decision and product use.  Packaging displays brand name/logo  

Chapter 12

Benefits of new products: changing customer needs, market saturation so need new  products, reducing risk with diversity (offering many products), fashion cycles (short lived trends), improving business relationships If you want to learn more check out Why have there been no great women artists?

Pioneers: new products, breakthroughs, establish a completely new market or radically  changes rules of competition and consumer preference (apple iPod). Have the advantage of being first movers and can get an early market share lead

5 types of new products:

Pioneers: (see above) (Kleenex, BandAid)

New category entry: new for a company, not new to world (Puffs tissue) Additions to Product Lines: line extensions (Coke comes out with new flavor,  Tide comes out with Tide pods) We also discuss several other topics like What is amphetamine?

Product Improvements

Repositionings  

Diffusion of innovation  

Innovators: want to be the first to buy, enjoy taking risk, knowledgeable Early Adopters: don’t like to take as much risk as innovators, wait and purchase  product after careful review, decide if it’s worth the cost

Early Majority: can’t be profitable until the largest group buys, don’t take much  risk, wait until bugs have been sorted out, costs could be lower, many price/quality  choices

Late Majority: about same size as early majority, market has reached full potential at this point, sales may have leveled off or be declining

Laggards: like to avoid change and rely on old products

5 factors influencing the rate of adoption

Compatibility: how well it fits in with lifestyle

Observability: can you see if the product is working

Relative advantage: better than other products available

Complexity: is it difficult to use?

Trialability: can you try it before using it?

Sources for new product ideas

Internal R and D: high product development costs, source of technology  products/breakthrough products If you want to learn more check out What does third culture kid mean?

R and D consortia: lower cost/risk, firms join together

Licensing: firms purchase rights to technology/ideas from another firm Brainstorming: groups work together to generate ideas

Outsourcing

Competitor’s products: reverse engineer

Customer input

Concept testing: concept is presented to buyer to obtain reaction (brief description of  product), triggers marketing research

Product development – prototype, alpha and beta testing

Prototype: first physical form of product in tentative form; produced with a  different manufacturing process than the actual product but has the same properties Alpha testing: testing occurring in R and D department at the firm, first testing Beta testing: uses potential consumers who examine product in real-use setting  Market testing: test market with trial batch of products

Premarket tests: bring customers into lab type setting

Test marketing: introduces product to a limited area (mini product launch, selling in real time)

Product Life Cycle

Introduction: product is launched, experience losses, low sales, innovators are  primary consumers Don't forget about the age old question of What is a healthful body weight?

Growth: product gains acceptance, demand/sales increase, more competitors,  variated consumer preferences, segmented market, consumers are early adopters and  early majority

Maturity: sales reach peak, try to reposition products/add new features to get it  going again, intense competition, saturated market, declining profits, buyers are the late  majority

Decline: exit the market, laggards are the consumers

 Chapter 13 

Service-Product continuum

Service Dominant Doctor--Hotel--Dry Cleaners--Restaurant--Apparel store--Grocery store  Product Dominant

US dependence on service, economic importance of service (4 areas) Production is cheaper in other countries

High value placed on convenience and leisure

Household maintenance became more specialized

Developed economies are increasingly more service oriented

Differences between services and goods

Intangible: can’t physically touch/taste/see a service like you can a pure product Inseparable production and consumption: service production cannot be  separated from consumption; makes purchase risk higher, can’t test a service Heterogeneous: variability in quality (doctor’s visit, hair stylist)  If you want to learn more check out Why no apparent perception of a blind spot?

Perishable: services cannot be stored for future use

Chapter 14 

Price: captures value

5 C’s of pricing

Competition: monopoly (one firm, can set whatever price), oligopoly (few firms),  monopolistic competition (many firms with differentiated products), pure competition  (many firms selling same good)

Costs: prices cannot be based purely on costs b/c consumers don’t take costs of  production into consideration when purchasing  

Company Objectives: profit/sales/competitor/customer oriented

Customers: understand customer reactions to pricing

Channel Members: manufacturers, wholesalers, retailers have different  strategies  

Profit orientation: products needs to generate a certain profit margin (target profit,  maximizing profits, target return pricing)

Sales orientation: set prices low to generate sales, make more sales at expense of  profit

Competitor orientation: set prices so low to take sales away from competitors Competitive parity: set prices similar to competitors

Status quo: changes prices only to meet competitor prices  

Customer orientation: target a market segment of consumers who highly value a  product and set prices high (premium pricing)  

Demand curve: how many units or product/service consumers will demand at different  prices (downward sloping)

Price elasticity of demand – elastic and inelastic demand: how responsive  consumers are to changes in price (by how much will quantity demanded change with a  certain change in price?)

Elastic: consumers are very price sensitive, absolute value of slope >1 (perfectly  elastic: slope = 0)

Inelastic: consumers are price insensitive, absolute value of slope <1 Income effect: change in quantity demanded of a product due to a change in income Substitutes and complements: substitute another product when price of this product  increases (turn to a different brand) (the more substitutes available, the more elastic)  complements are products that go together (peanut butter and jelly, hot dogs and buns)  (demands for each product are positively related)

Fixed and variable costs: fixed costs: remain at same level regardless of production;  variable: costs like labor and material vary with production quantity Break-even point: profits = 0, total revenue = total costs

Gray market: employs irregular but not illegal methods; goes around authorized  channels of distribution to sell goods at prices lower than intended by manufacturer Value-based pricing strategy: set price based on value to consumer and not cost Improvement value method: pay for improvement of features

Cost Ownership method: pay more initially if product costs less to own Reference prices: comparison price used to evaluate products

Internal reference price: something you have a memory for

Last price paid

Expected price

Reservation price: how high you’re willing to go

Expectation of future prices

EDLP: everyday low pricing strategy: saves search cost of finding lowest prices High-low strategy: chase the lowest price, rely on promotion of sales Price skimming: high introductory price, appeals to consumers who want to pay the  premium, innovators

Market penetration: set initial price low to introduce product, build sales/market share  quickly

Advertising allowances: when manufacturer pays retailer to advertise the product  (get discount back)

Slotting allowance: fee charged by supermarkets to put manufacturer’s product on the shelf

Price bundling: seller bundles many goods together to sell at one price Cash discounts: motivate customer to pay the bill before the date it is owed by cutting  the amount

Bait and switch: illegal; advertise one price and show different/higher priced product in store and say original is out of stock

Predatory pricing: firm sets a very low price with the intent to drive a competitor out  of business, is illegal

Price discrimination: not always illegal, charge a different price to different buyers for  same product

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