DECA Set 7 - Pricing Factors, Product Development, Customer Experience, Product Mix & Services

Name factors that affect pricing decisions.

Cost of production, demand, competition, perceived value, economic conditions, legal restrictions, and company objectives.

State the law of demand.

As price rises, quantity demanded falls, and as price falls, quantity demanded rises.

Define price elasticity of demand.

A measure of how sensitive quantity demanded is to a change in price. Demand is elastic when a small price change causes a large change in quantity demanded.

Define feasibility study.

A preliminary assessment of whether a product or business idea is practical and likely to succeed.

Name aspects of feasibility examined.

Market, technical, financial, legal, and operational feasibility.

What screening questions help determine feasibility?

Is there demand? Can it be produced at a profit? Are the necessary resources and skills available? Is it legal?

What is a prototype?

A preliminary model of a product used to test its design and function.

Why test and revise a product idea before full production?

To gather feedback, find flaws, and refine features and costs.

What is a minimum viable product (MVP)?

The simplest version of a product with enough features to be usable and to gather customer feedback.

Define opportunity recognition.

Identifying a gap, need, or trend that can be turned into a business or product opportunity.

Name processes that support ongoing opportunity recognition.

Scanning the environment, collecting customer feedback, monitoring trends, networking, brainstorming, and reviewing competitors.

Why should opportunity recognition be an ongoing process?

Markets and customer needs change continually, so ongoing effort helps a business stay ahead.

Define customer experience.

A customer's overall perception of all interactions with a business.

Name methods for evaluating customer experience.

Surveys, reviews, Net Promoter Score, complaint analysis, mystery shoppers, and social media monitoring.

What does Net Promoter Score measure?

Customer loyalty, based on how likely customers are to recommend the business on a 0 to 10 scale.

Define product mix.

All of the products a business sells, also called the product assortment.

How does a product line differ from a product item?

A product line is a group of closely related products. A product item is a specific version or model within a line.

What are the width and depth of a product mix?

Width is the number of product lines. Depth is the number of variations (items) within each line.

What factors influence product mix decisions?

Customer demand, profitability, competition, brand image, available resources, and seasonality.

How does a product line extension differ from expanding the product mix?

A line extension adds items to an existing line. Expanding the mix adds entirely new product lines.

How does the product life cycle affect product mix planning?

The stages (introduction, growth, maturity, decline) guide decisions to add, modify, or drop products.

Define service.

An intangible activity or benefit offered to customers.

Give examples of customer services.

Delivery, installation, repair, credit, warranties, gift wrapping, and returns.

What factors determine which services a business should offer?

Customer needs, competition, cost, company image, and type of product.

Define service standard.

A measurable guideline describing the level of service quality customers should receive.

How do internal service standards differ from external service standards?

Internal standards are set by the company (response time, policies). External standards come from customers, the industry, regulators, or competitors.

Give an example of a measurable service standard.

Respond to customer emails within 24 hours.

What is a corporate brand?

The identity of a company as a whole, as opposed to the identity of an individual product.

Name common brand elements.

Name, logo, slogan, colors, brand voice, and packaging.

Define brand equity.

The value a brand adds beyond a product's functional benefits, based on consumers' perceptions of the brand.