CLEP Principles of Marketing Study Notes

Services tasks performed by one individual or firm

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Services - tasks performed by one individual or firm for another. Services can be broken down into consumer services and industrial services depending on who the customer is. Examples are financial, legal, and janitorial services. Product line -includes a group of closely related product items that are considered a unit because of marketing, technical, or end- use considerations. The specific product items in a product line usually reflect the desires of different target markets or the different needs of consumers . Product mix - consists of all the products that an organization makes available to customers. A new product - can either be an innovative product that has never been sold by any organization, or it can be a product that a given firm has not marketed previously. A new product can either be genuinely new, or it can simply be a product that a certain company has never offered before; for example, IBM making cars. 5 steps to the New-Product Development Process to include: 1. Idea Generation - where organizations seek product ideas that will help them achieve their objectives. Can involve market research, brainstorming , and many other internal and external sources for new product ideas. 2. Product Screening where ideas for new products go through an initial evaluation and are subjected to consumer scrutiny. Made up of Product Screening and Concept Testing. Product Screening involves weeding out the ideas which do not meet the company's standards . Concept Testing takes the remaining ideas and subjects them to the scrutiny of potential customers. The screening stage is where most new product ideas are eliminated--it usually involves just going through a checklist and checking the company's overall ability to produce and market the product. 3. Business Analysis - product idea is evaluated to determine its potential contribution to the firm's sales, costs, and profits. More in-depth, and looks into the products commercial feasibility--how strong are the competitors, what kind of demand and profit potential is there, etc. 4. Product Development - where ideas are first produced in tangible form. Idea or concept is converted into a prototype , or working model. It is near the end of this stage that marketers begin to make decisions regarding branding, packaging, pricing, and promotion for use in the next stage--the test marketing phase. 5. Test Marketing and Commercialization – (test marketing) where the company makes a limited introduction of a product in geographic areas chosen to represent the intended market. It tests actual customer reaction to the product, as well as allows the firm to experiment with variations in advertising, price, and packaging. (commercialization) - where plans for full-scale manufacturing and marketing are settled and implemented. Occurs if the Test Marketing stage had the desired results. This stage corresponds to the Introductory stage of the Product Life Cycle for the product. Sample launching
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