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1)
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Identify the four stages of the product life cycle and give a product example of each cycle?
(5pts)
Dea's answers
The first stage of the product life cycle is market introduction. This stage involves promotion to introduce the product to customers and create a want or desire for the product. Typically, sales start out low but that is not always the case. Apple knows how to create “buzz” and a desire for their products before they ever hit the market. It is estimated that 1.5 million iPhone 4’s were sold the very first day. The next stage is market growth, in which sales and profits grow at a fast pace. It is at this stage that companies have to be diligent in watching the competition. This is especially evident with fashion such as Uggs. Once consumers saw their favorite starts sporting the shoes, they had to have them and sales grew quickly. The third stage is market maturity, where sales begin to level off and competition becomes a big issue. It is at this stage that product loyalty really helps a company. The mp3 market is a good example of this stage. The first to come out was the iPod. Everyone had to have one. Then, it seemed to happen overnight, the market was flooded with mp3 players from a lot of famous electronics manufacturers. They all tried to play on the weaknesses of the iPod, which were battery life and proprietary software, or iTunes. However, Apple stayed in the game by revamping their original product several times so they always had something “new” to offer consumers. There are still die-hard Apple fans that stand by their iPod and Apple definitely knows how to stay competitive. The last stage is sales decline. It is at this point that new products come out and price becomes the competitive edge. Products, such as Tide laundry detergent, never go away. They have a loyal customer base and sales level off but stay consistent. However, things like fashion or electronics become outdated or obsolete. Electronics manufacturers know they have to have new products in development before their “latest and greatest” even hits the market.
Word count: 338 words
2)
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What is the Federal Trade Commissions' definition of  a " New" product?
(5pts)
Dea's answers
The FTC’s policy is that a “new product” must be entirely new or changed in a “functionally significant or substantial respect”. Also, a product is only “new” for six months.
Word count: 30 words
3)
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Identify the five steps of the "New product development process". Which is the most important?
(5pts)
Dea's answers
The first step in the new product development process is idea generation. Current customers are always a good place to start when generating ideas for new products. It may appear that this step is sort of hit and miss but companies develop formal procedures for idea generation. They study consumers, talk to distributors, analyze competitors, and try to anticipate future trends. These ideas are then moved to the next step where they are screened or evaluated. Companies use a type of S.W.O.T. analysis to narrow down which ideas will move to the next step of the process. Criteria include ability to produce the product and get it to market, product safety and possible liability issues, product cost and ROI, or return on investment, and how the product fits into the company’s objectives. Screening is probably the most important step because the third step, idea evaluation, can be very expensive and time consuming. If the idea is screened thoroughly, then the company can be sure they are not wasting resources and time on an idea that is not feasible. For example, if Cosmopolitan had thoroughly screened the idea of bringing their own brand of yogurt to market, they may have realized that sometimes it is wise to stick with what the firm does best. The yogurt was pulled from shelves within 18 months of being marketed. The third step, idea evaluation, involves concept testing, estimating costs, projecting revenue, and looking for any indication that it may not work. At this stage, there is no actual product but the information gathered is crucial to deciding whether or not to go forward. Once an idea has made it through screening and evaluation, it moves to step four, product development. This step involves research and development, product and market testing, and usually results in necessary changes or improvements. Because this stage is costly, it is essential that ideas are screened and evaluated thoroughly before moving them to this state. The final step is commercialization, or getting it to the market. This is where the rubber meets the road. The marketing strategy is set in motion and the company can begin to compare actual costs and revenues against the estimates and projections. Depending on the product, the company may introduce the product in limited areas or markets before rolling it out on a large scale. The goal is to ensure that the strategy is working and that the product is successful.
Word count: 403 words
4)
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Define benchmarking and give an example
(5pts)
Dea's answers
Benchmarking is a way to gauge success. It involves comparing the company’s processes to some sort of best practices or goals determined by management. Some industries have formal business strategies that they measure themselves by such as Sigma Six. Sigma Six is a process that measures quality of products produced with a production goal of 99.99966% defect free products. Benchmarking can be used in many different ways to measure success. Sales can be measured against sales goals, product costs can be measure against estimated costs, and how the company compares to competitors.
Word count: 92 words
5)
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Discuss the social value of new-product development activities that seem to encourage people to discard products that are nto all worn out. Is this an econmic waste?  How worn out is worn out?
(5pts)
Dea's answers
Cell phones are an obvious example of new products that encourage consumers to discard items that are not worn out. Most consumers are looking for the next great phone before they have even learned how to use all the features on their current phone. This constant demand is good for the economy because it guarantees jobs and encourages companies to invest in new product ideas. However, it is environmentally irresponsible because there is no good solution for dealing with all the electronics consumers “throw away”. It is a dilemma companies face all the time. How do you balance consumer wants with social responsibility.
Word count: 103 words
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What is the difference between " selling direct' and direct marketing?
(5pts)
Dea's answers
While direct marketing can involve selling directly, it is defined as marketing or advertising directly to the end user, or consumer. Whereas, selling directly involves actual sales transactions with the end user. Store brands might represent direct selling because the store is selling their brand directly to consumers. That same store might sell other brands whose manufacturers market directly to the consumer but sell through a third party.
Word count: 68 words
7)
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Define discrepancy of assortment and give an example.
(5pts)
Dea's answers
Discrepancy of assortment is the difference between the product lines a company makes and the assortment the consumer wants. For example, it would be very inconvenient to the consumer if Home Depot offered the lumber to build something but did not offer the nails to put it together. Therefore, Home Depot offers everything a consumer needs to complete the project, which effectively deals with discrepancy of assortment.
Word count: 67 words
8)
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List the the three types of marketing exposure?

(5pts)
Dea's answers
The three types of marketing exposure are intensive distribution, selective distribution, and exclusive distribution. Intensive distribution is selling through all responsible and suitable wholesalers or retailers who will sell the product. This type of market exposure is well suited toward convenience goods and business supplies. In other words, all the things consumers use frequently because they are looking more at the convenience of location and include impulse items. Selective distribution is suited to categories of products and entails a broad are of market exposure that falls between intensive and exclusive distribution. Dell is a good example of selective distribution. They offer direct sales through their website to consumers that want to “build their own” computer but also offer prebuilt laptops and computers through some retailers. Exclusive distribution is the extreme of selective distribution. When the iPhone was introduced to the market, it was exclusively offered by AT&T. Apple is beginning to move from exclusive to selective distribution by adding Verizon as a partner.
Word count: 161 words
9)
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List and explain the four types of regrouping activities that middlemen use to create a value for their service?
(5pts)
Dea's answers
Regrouping activities attempt to solve discrepancies of quantity and assortment. Accumulating involves purchasing from many small producers and is especially important in less-developed countries and professional services offerings. It lowers cost of transporting goods and is more convenient when the products are a considerable distance away. Professional service organizations use the concept to offer consumers convenience. For example, insurance agencies offer auto, homeowners, and life insurance. Bulk-breaking divides larger quantities into smaller quantities the closer the product gets to the final consumer. Costco and Wal-Mart may offer the same brand but Costco sells it in bulk and Wal-Mart sells the same product in individual packages. Sorting is the process of separating products into grades and qualities that are desired by different markets. Lowe’s may purchase tile from a supplier that also sells to commercial tile companies. However, they probably offer a very different grade of tile to the commercials companies than they do to Lowe’s whose customers may not need or want commercial grade tile products. Assorting involves putting a variety of products together that will satisfy a target market. Again, we go back to Home Depot, they offer the home improvement enthusiast everything they need to complete that home improvement project.
Word count: 200 words
10)
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Give three advantages of a manufacturer using a dual distribution system

(5pts)
Dea's answers
Dual distribution can provide lower cost access to new markets, lower cost promotion by sharing the cost with channel partners, and lower costs associated with storing inventory.
Word count: 27 words
11)
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Define the total cost approach when evaulating Physical Distribution Systems. Give examples of how comflicts might occur  between different departments in an organization.
(5pts)
Dea's answers
The total cost approach involves evaluating each possible physical distribution system and identifying all of the costs of each alternative, including inventory carrying costs and lost sales due to lower customer service levels. Conflicts can occur when sales over promises and operations under produces. For instance, a sales person promises a customer that they will have 100 blue widgets on Monday but production is busy producing red widgets, so there are not blue widgets available. Even if the blue widgets are available, there may be problems with the shipping department because they are unable to ship them that fast. Physical Distribution systems have to be a coordinated effort with everyone in the company agreeing on the specifics.
Word count: 117 words
12)
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List the 5 transport modes, and compare their cost and delivery speed to each other.
(5pts)
Dea's answers
Air Transport, Very High Cost, Very Fast Speed Truck Transport, High Cost, Fast Speed Rail Transport, Medium Cost, Average Speed Pipeline Transport, Low Cost, Slow Speed Water Transport, Very Low Cost, Very Slow Speed It is pretty clear that the faster the delivery speed, the higher the cost. However, the product being shipped narrows the choices. To save money, a company couldn’t realistically ship perishable goods by water transportation and definitely couldn’t use a pipeline. Typically, air transportation is used for high value, low weight goods, railroad transportation is suited to large, heavy, and /or bulky products, pipelines are used for moving oil and gas, and ships are used for heavy freight and are very important for international shipping. At least 75 percent of U.S. consumer goods travel at least part of the way by truck. This mode offers the most flexibility and reliability for smaller quantities that are shipped over shorter distances.
Word count: 148 words
13)
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Identify the 6 actual expenses incurred for total inventory cost.
(5pts)
Dea's answers
Total inventory costs include interest expense and opportunity cost of money tied up in stored inventory, cost of the storage facilities, cost of workers to handle the inventory, damage to goods while being stored, cost of insurance to protect against risks like fire, and cost of products becoming obsolete while being stored.
Word count: 52 words
14)
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Clearly differentiate between a warehouse and  a distribution center. Explain how a specific product would be handled differently by each.
(5pts)
Dea's answers
Warehouses are used as protective buildings for storing goods by manufacturers, wholesalers, and retailers. A distribution center iis used to speed the flow of goods and avoid unnecessary storing costs. At Christmas, toy makers are working overtime to produce enough for demand. The manufacturer might rent a warehouse to store the finished goods until they are ready to be shipped to retailers. Some of those same toys may end up in Amazon.com’s distribution center where they are used to immediately fill orders for customers.
Word count: 84 words
15)
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If a retailer operates only from a website and ships orders by UPS, is it freed from the logistics issues that face traditional retailers? Expalin your thinking.
(5pts)
Dea's answers
Retailers using this business model do avoid some of the logistic issues but not all. They can avoid shipping costs by passing them on to the customer. They avoid costs associated with maintaining a retail store. They also avoid a lot of the handling expenses because they don’t need sales associates and fewer stock personnel. However, they still have to deal with getting inventory, storing it and balancing quantities with customer demand.
Word count: 72 words
16)
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What is an agent middleman's marketing mix?
(5pts)
Dea's answers
Their marketing mix would include promotion of the products they offer, place or where the products will be sold, and the price they assign to the product. They could choose which products to offer but not which were produced.
Word count: 39 words
17)
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Discuss a few changes in the marketing enviromnent that you think help to exlain why telephone, mail-order, and Interner retailing have been growing so rapidly
(5pts)
Dea's answers
People are busier than ever and convenience is a commodity. This may explain why telephone, mail-order, and internet sales are growing. Most households now have personal computers and smart phones making it easier to shop for many different products from many different retailers. Even retailers with actual retail outlets are offering convenience and saving consumers money. Wal-Mart offers special discounts at its website and will then ship the item to the local store at no extra cost. The consumer doesn’t have to drive to the store only to find out the product isn’t available. They can order online, get notification that it has arrived at the store, and go pick it up. No wasted trips or frustration over not being able to find what they are looking for. It is also good for the retailer because they don’t have to store inventory that may not turn over quickly but are still able to satisfy their customers.
Word count: 156 words
18)
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How do you think a retailer of Whirlpool washing machines would react if Whirlpool set up a website and sold direct to consumers, and shipped direct from its distribution center? Explain your thinking.
(5pts)
Dea's answers
The retailer would be concerned about sales decline and may reconsider offering Whirlpool products. If the products were offered for the same price, consumers would probably still shop at the retailer because when making large purchases they would want to see what they were getting. However, it doesn’t seem like a workable plan due to shipping costs. The consumer would not want to pay the cost of shipping a washing machine. Also, consumers seem to be leery of making large purchases online due to the possible hassle of returning the product if there is a defect.
Word count: 96 words
19)
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What is the difference between  an Agent Middleman and a Manufacturingt Agent?

(5pts)
Dea's answers
Manufacturing Agents are a type of Agent Middleman. There are three types, Manufacturing Agent, Selling Agent, and Purchasing Agent. Agent Middlemen do not own the products they sell. Manufacturing Agents typically sell similar products from several noncompeting producers.
Word count: 38 words
20)
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Idfentify three reasons why a company has to have some type of reverse channel policy.
(5pts)
Dea's answers
• To allow customers to return defective products. • To allow customers to return products bought in error. • To allow customers to return products that was shipped in error.
Word count: 28 words

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