Business in Action Ch 14 BUSN100 Product and Pricing Strategies

45 terms by draggam01

Create a new folder

Advertisement Upgrade to remove ads

After studying this chapter, you will be able to 1. Identify the main types of consumer and organizational products and describe the four stages in the life cycle of a product 2. Describe six stages in the product development process 3. Define brand and explain the concepts of brand equity and brand loyalty 4. Identify four ways of expanding a product line and discuss two risks that product-line extensions pose 5. List the factors that influence pricing decisions and explain break- even analysis…

Products contain both tangible and intangible components; predomi-nantly tangible products are categorized as goods, whereas predominantly intangible products are categorized as services.

The Product Continuum

Product decisions also involve how much or how little to augment the core product with additional goods and services.

Augmenting the Basic Product

Everyday goods and services that people buy frequently, usually without much conscious planning

Convenience Products

Fairly important goods and services that people buy less frequently with more planning and comparison

Shopping Products

Particular brands that the buyer especially wants and will seek out, regardless of location or price

Specialty Products

Inexpensive products that organizations generally use within a year of purchase

Expense Items

More expensive organizational products with a longer useful life, ranging from office and plant equipment to entire factories

Capital Items

Four stages through which a product progresses: introduction, growth, maturity, and decline

Product Life Cycle

Most products and product cate-gories move through a life cycle similar to the one represented by the curve in this diagram. However, the duration of each stage varies widely from product to product. Automobiles have been in the maturity stage for decades, but faxing services barely made it into the introduction stage before being knocked out of the market by low-cost fax machines that every busi-ness and home office could afford.

Product Life Cycle

A formal process of generating, selecting, developing, and commercializing product ideas

Product Development Process

The product development process is designed to identify the product ideas most likely to succeed in the marketplace.

The Product Development Process

Preproduction samples of products used for testing and evaluation

Prototypes

Product development stage in which a product is sold on a limited basis to gauge its market appeal

Test Marketing

Large- scale production and distribution of a product

Commercialization

A name, term, sign, symbol, design, or combination of those used to identify the products of a firm and to differentiate them from competing products

Brand

The value that a company has built up in a brand

Brand Equity

The degree to which customers continue to purchase a specific brand

Brand Loyalty

Portion of a brand that can be expressed orally, including letters, words, or numbers

Brand Names

Portion of a brand that cannot be expressed verbally

Brand Mark

A concise graphical and/ or textual representation of a brand name

Logo

Brands that have been given legal protection so that their owners have exclusive rights to their use

Trademarks

Brands owned by the manufacturers and distributed nationally

National Brands

Brands that carry the label of a retailer or a wholesaler rather than a manufacturer

Private Brands

Products characterized by a plain label, with no advertising and no brand name

Generic Products

Partnership between two or more companies to closely link their brand names together for a single product

Co-Branding

Agreement to produce and market another company's product in exchange for a royalty or fee

License

Managers who develop and implement the marketing strategies and programs for a specific product or brand

Brand Managers

A series of related products offered by a firm

Product Line

Complete list of all products that a company offers for sale

Product Mix

Using a brand name on a variety of related products

Family Branding

Applying a successful brand name to a new product category

Brand Extension

A measure of the sensitivity of demand to changes in price

Price Elasticity

Business costs that remain constant regardless of the number of units produced

Fixed Costs

Business costs that increase with the number of units produced

Variable Costs

Method of calculating the minimum volume of sales needed at a given price to cover all costs

Break-Even Analysis

Sales volume at a given price that will cover all of a company's costs

Break-Even Pint

Method of setting prices based on production and marketing costs, rather than conditions in the marketplace

Cost-Based Pricing

Method of setting prices based on customer perceptions of value

Value-Based Prcing

Computer- based pricing method that creates a demand curve for every product to help managers select a price that meets specific marketing objectives

Optimal Pricing

Charging a high price for a new product during the introductory stage and lowering the price later

Skim Pricing

Selling one product at a loss as a way to entice customers to consider other products

Loss-leader Pricing

Allowing customers to pay the amount they think a product is worth

Participative Pricing

Temporary price reductions to stimulate sales or lower prices to encourage certain behaviors such as paying with cash

Discounts

Offering several products for a single price that is presumably lower than the total of the products' individual prices

Bundling

Continually adjusting prices to reflect changes in supply and demand

Dynamic Pricing

Please allow access to your computer’s microphone to use Voice Recording.

Having trouble? Click here for help.

We can’t access your microphone!

Click the icon above to update your browser permissions above and try again

Example:

Reload the page to try again!

Reload

Press Cmd-0 to reset your zoom

Press Ctrl-0 to reset your zoom

It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

Please upgrade Flash or install Chrome
to use Voice Recording.

For more help, see our troubleshooting page.

Your microphone is muted

For help fixing this issue, see this FAQ.

Star this term

You can study starred terms together

NEW! Voice Recording

Create Set