Ch. 14 Developing and Pricing goods and services

Created by BWginger14 

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28 terms · Vocab!!!!

Value

Good quality at a fair price

Total Product Offer

Everything that consumers evaluate when deciding whether to buy something. (aka Value Package)

Product Line

A group of products that are physically similar or are intended for a similar market.

Product Mix

Combo. of product lines offered by a manufacturer.

Product Differentiation

Creation of real or perceived product differences

convenience goods and services

Products that the consumer wants to purchase frequently and with minimum effort.
Examples: Candy, gum, milk, snacks, gas, etc.

Shopping goods and services

Products that the consumer buys only after comparing value, quality, price and style from a variety of sellers.
Examples: clothes, appliances, electronics, auto repair, etc.

Specialty goods and services

consumer products with unique characteristics and brand identity. Products are perceived to have no other substitute and consumer will put forth effort to get these products.
Examples: Fine watches, Wines, Imported chocolates, services, etc.

Unsought goods and services

products that consumers are unaware of, haven't necessarily thought of buying, or find they need to solve an unexpected problem.
Examples: Car towing, funeral services, insurance, etc.

Industrial Goods

Products used in the production of other products. (aka B2B products).

Bundling

grouping two or more products together and pricing them as a unit.

Trademark

brand that has exclusive legal protection for both it's brand name and it's design.

Brand Equity

The value of the brand name and associated symbols

Brand Loyalty

The degree to which customers are satisfied and are further committed to future purchases of that brand.

Brand Awareness

How quickly a given brand name comes to mind when a product is mentioned.

Brand Association

Linking of a brand to other favorable images

Brand Manager

Manger who has direct responsibility for one brand or one product line. (aka product manager)

Product Screening

Process designed to reduce the number of new product ideas being worked on at any one time.

Product analysis

making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas.

Concept testing

taking a product idea to consumers to test their reactions.

commercialization

promoting a product to distributors and retailers to get wide distribution and developing strong ads and sales campaigns to generate and maintain interest in the product among distributors and consumers.

Product life cycle

A theoretical model of what happens to sales and profits for a product class over time.
Four stages:
1. Introduction
2. Growth
3. Maturity
4. Decline

Target Costing

designing a product so that it satisfies customers and meets profit margins desired by the firm.

competition based pricing

A pricing strategy based on what all the other competitors are doing.

Price Leadership

Strategy by which one or more dominant firms set pricing practices all competitors in an industry follow.

Break Even Analysis

Process used to determine profitability at various levels of sales.

BEP= Total Fixed Costs/ Price of one unit - Variable costs of one unit.

Total Fixed Costs

All expenses that remain the same no matter how many products are made or sold.

Variable costs

Costs that change according to the level of production.

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