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66 terms

Chapter 12: Creating and Pricing Products that Satisfy Customers

BUS-102 Introduction to Business
STUDY
PLAY
accessory equipment
standardized equipment used in a firm's production or office activities
brand
a name, term, symbol, design, or any combination of these that identifies a seller's products as distinct from those of other sellers
brand equity
marketing and financial value associated with a brand's strength in a market
brand extension
using an existing brand to brand a new product in a different product category
brand loyalty
extent to which a customer is favorable toward buying a specific brand
brand mark
the part of a brand that is a symbol or distinctive design
brand name
the part of a brand that can be spoken
breakeven quantity
the number of units that must be sold for the total revenue (from all units sold) to equal the total cost (of all units sold)
bundle pricing
packaging together two or more complementary products and selling them for a single price
business product
a product bought for resale, for making other products, or for use in a firm's operations
business service
an intangible product that an organization uses in its operations
captive pricing
pricing the basic product in a product line low, but pricing related items at a higher level
comparison discounting
setting a price at a specific level and comparing it with a higher price
component part
an item that becomes part of a physical product and is either a finished item ready for assembly or a product that needs little processing before assembly
consumer product
a product purchased to satisfy personal and family needs
convenience product
a relatively inexpensive, frequently purchased item for which buyers want to exert only minimal effort
customary pricing
pricing on the basis of tradition
demand
the quantity of a product that buyers are willing to purchase at each of various prices
discount
a deduction from the price of an item
everyday low prices (EDLPs)
setting a low price for products on a consistent basis
express warranty
a written explanation of the producer's responsibilities in the event that a product is found to be defective or otherwise unsatisfactory
family branding
the strategy in which a firm uses the same brand for all or most of its products
fixed cost
a cost incurred no matter how many units of a product are produced or sold
generic product (or brand)
a product with no brand at all
individual branding
the strategy in which a firm uses a different brand for each of its products
labeling
the presentation of information on a product or its package
line extension
development of a new product that is closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs
major equipment
large tools and machines used for production purposes
manufacturer (or producer) brand
a brand that is owned by a manufacturer
markup
the amount a seller adds to the cost of a product to determine its basic selling price
multiple-unit pricing
the strategy of setting a single price for two or more units
negotiated pricing
establishing a final price through bargaining
non-price competition
competition based on factors other than price
odd-number pricing
the strategy of setting prices using odd numbers that are slightly below whole-dollar amounts
packaging
all the activities involved in developing and providing a container with graphics for a product
penetration pricing
the strategy of setting a low price for a new product
periodic discounting
temporary reduction of prices on a patterned or systematic basis
premium pricing
pricing the highest-quality or most-versatile products higher than other models in the product line
price
the amount of money a seller is willing to accept in exchange for a product at a given time and under given circumstances
price competition
an emphasis on setting a price equal to or lower than competitors' prices to gain sales or market share \
price leaders
products priced below the usual markup, near cost, or below cost
price lining
the strategy of selling goods only at certain predetermined prices that reflect definite price breaks
price skimming
the strategy of charging the highest possible price for a product during the introduction stage of its life-cycle
process material
a material that is used directly in the production of another product but is not readily identifiable in the finished product
product
everything one receives in an exchange, including all tangible and intangible attributes and expected benefits; it may be a good, a service, or an idea
product deletion
the elimination of one or more products from a product line
product differentiation
the process of developing and promoting differences between one's product and all similar products
product life-cycle
a series of stages in which a product's sales revenue and profit increase, reach a peak, and then decline
product line
a group of similar products that differ only in relatively minor characteristics
product mix
all the products a firm offers for sale
product modification
the process of changing one or more of a product's characteristics
random discounting
temporary reduction of prices on an unsystematic basis
raw material
a basic material that actually becomes part of a physical product; usually comes from mines, forests, oceans, or recycled solid wastes
reference pricing
pricing a product at a moderate level and positioning it next to a more expensive model or brand
secondary-market pricing
setting one price for the primary target market and a different price for another market
shopping product
an item for which buyers are willing to expend considerable effort on planning and making the purchase
special-event pricing
advertised sales or price cutting linked to a holiday, season, or event
specialty product
an item that possesses one or more unique characteristics for which a significant group of buyers is willing to expend considerable purchasing effort
store (or private) brand
a brand that is owned by an individual wholesaler or retailer
supply
the quantity of a product that producers are willing to sell at each of various prices
total cost
the sum of the fixed costs and the variable costs attributed to a product
total revenue
the total amount received from sales of a product
trade name
the complete and legal name of an organization
trademark
a brand name or brand mark that is registered with the U.S. Patent and Trademark Office and thus is legally protected from use by anyone except its owner
transfer pricing
prices charged in sales between an organization's units
variable cost
a cost that depends on the number of units produced