Module 4: Chapters 9, 10, & 14 - marketing

Product Management

The systematic and usually team-based approach to coordinating all aspects of a product’s strategy development and execution

Product objectives

The direction and focus that marketers establish for their products, which ultimately support the broader marketing objectives of the business unit and are consistent with the firm’s overall mission.

Product line

A firm’s total product offering designed to satisfy a single need ot desire of target customers.

Product line length

Determined by the number of separate items within the same category.

Stock-keeping unit (SKU)

A unique identifier for each distinct product

Full-line product strategy

A product line strategy that targets many customer segments to boost sales potential

Limited-line product strategy

A product line strategy that has fewer product variations in order to send a signal of exclusivity or specialization to the market

Product line extension

A strategy to expand an existing product line by adding more brands or models

Upward product line stretch

A product line extension strategy that adds new items toward the higher-priced end of the market

Manufacturer’s suggested retail price (MSRP)

The price that a product’s manufacturer recommends it be sold for at the point of sale. Any retail product can have an MSRP, but the term is frequently used with automobiles. An MSRP is sometimes informally known as the “sticker price.”

Downward product line stretch

A product line extension strategy that adds new items toward the lower-priced end of the market.

Two-way product line stretch

A product line extension strategy that simultaneously expands new items toward both the higher and lower ends of the market.

Filling-out product strategy

A strategy to add sizes or styles not previously available in a product category.

Cannibalization

The loss of sales of an existing brand when a new item in a product line or product family is introduced.

Product mix

The total set of all products a firm offers for sale

Product mix width

The number of different product lines the firm produces

Product quality

The overall ability of the product to satisfy customer expectations

Internal customers

Coworkers who interact and harbor the attitude and belief that all activities ultimately impact external customers.

Internal customer mindset

An organizational culture in which all organization members treat each other as valued customers

ISO 9000

The most famous of the family of standards overseen by the International Organization of Standardization. ISO 9000 provides guidelines for organizations to improve the quality of their products and services and consistently meet customer expectations.

Six Sigma

A process whereby firms work to limit product defects to 3.4 per million or fewer

Product life cycle (PLC)

A concept that explains how products go through four distinct stages from birth to death: introduction, growth, maturity, and decline

Introduction stage

The first stage of the product life cycle, in which slow growth follows the introduction of the new product in the marketplace

Product relaunch

Using principles of segmentation, target marketing, and positioning to reposition an existing product for reintroduction into the product life cycle

Growth stage

The second stage is the product life cycle, during which consumers accept the product and sales rapidly increase

Maturity stage

The third and longest stage in the product life cycle, during which sales peak and profit margins narrow

Decline stage

The final stage in the product life cycle, during which sales decrease as customer needs change

Brand

A name, term, symbol, or any other unique element of a product that identifies one firm’s products and sets it apart from the competiton.

Trademark

The legal term for a brand name, brand mark, or trade character; trademarks legally registered by a government obtain protection for exclusive use in that country.

Brand equity

The value of a brand to an organization.

Brand meaning

The beliefs and associations that a consumer has about the brand.

Brand personality

A distinctive image that captures the character and benefits of a good or service.

Brand anthropomorphism

The assignment of human characteristics and qualities to a brand

Brand storytelling

Compelling stories told by marketers about brands to engage consumers.

Brand extensions

A new product sold with the same brand name as a strong existing brand.

Brand dilution

A reduction in the value of a brand is typically driven by the introduction of a brand extension that possesses attributes that adversely contrast with the current attributes consumers associate with the brand.

Sub-branding

Creating a secondary brand within a main brand that can help differentiate a product line to a desired target group

Family brand

A brand that a group of individual products or individual brands share

National or Manufacturer brands

Brands that the product manufacturer owns

Private-label brands

Brands that a certain retailer or distributor owns and sells

Generic branding

A strategy in which products are not branded and are sold at the lowest price possible

Licensing

An agreement in which one firms sells another firm the right to use a brand name for a specific purpose and for a specific period of time

Cobranding

An agreement between two brands to work together to market a product

Lifestyle brands

Brands that seek to inspire, guide, and motivate people to contribute to the consumer’s way of life.

Ingredient branding

A type of branding in which branded materials become “component parts” of other branded products

Rebranding

Taking an established brand and intentionally and strategically creating a new name, concept, symbol, design, imagery, and messaging to develop a new, differentiated identity in the minds of consumers and other stakeholders.

Package

The covering or container for a product that provides product protection, facilitates product use and storage, and supplies important marketing communication

Universal Product Code (UPC)

A set of black bars or lines printed on the side or bottom of most items sold in grocery stores and other mass-merchandising outlets that correspond to a unique 10-digit number

Sustainable Packaging

Packaging that involves one or more of the following: elements that can be produced from previously used materials, elements that use materials in their development that can be repurposed after use, materials that require fewer resources to cultivate, and materials and processes that are generally less harmful to the environment.

Brand manager

An individual who is responsible for developing and implementing the marketing plan for a single brand

Product category manager

An individual who is responsible for developing and implementing the marketing plan for all the brands and products within a product category.

Market Manager

An individual who is responsible for developing and implementing the marketing plans for products sold to a particular customer group

Venture teams

Groups of people within an organization who work together to focus exclusively on the development of a new product.

Elevator pitch

A statement that details your value proposition in about 30 seconds, the average time it takes for an elevator ride.

Market Share

The percentage of a market (defined in terms of either sales units or revenue) accounted for by a specific firm, product lines, or brands.

Competitive-effect pricing or market-based pricing

Pricing a product based on (above, below, or the same as) the competition’s pricing.

Prestige products

Products that have a high price and that appeal to status-conscious consumers.

Price elasticity of demand

The percentage change in unit sales that results from a percentage change in price

Percentage change in quantity demanded / percentage change in price

Elastic demand

Demand in which changes in price have large effects on the amount demanded

Inelastic demand

Demand in which changes in price have little or no effect on the amount demanded

Cross-elasticity of demand

When changes in the process of one product affect the demand for another item

Variable costs

The costs of production (raw and processed materials, parts, and labor) that are tied to and vary by the number of units produced

Fixed costs

Costs of production that do not change with the number of units produced

Average fixed cost

The fixed cost per unit produced

Total costs

The total of the fixed costs and the variable costs for a set number of units produced

Break-even analysis

A method for determining the number of units that a firm must produce and sell at a given price to cover all its costs.

Break-even point

The point at which the total revenue and total costs are equal, and above which the company makes a profit; below that point, the firm will suffer a loss.

Contribution per unit

The difference between the price the firm charges for a product and the variable costs.

Tax Cuts and Jobs Act of 2017

A major overhaul of personal and corporate taxes enacted by Congress in 2017

Markup

An amount added to the cost of a product to create the price at which a channel member will sell the product

Gross margin

The markup amount added to the cost of a product to cover the fixed costs of the retailer or wholesaler and leave an amount for a profit

Retailer margin

The margin added to the cost of a product by a retailer

Wholesaler margin

The amount added to the cost of a product by a wholesaler

List, price, or manufacturer’s suggested retail price (MSRP)

The price that the manufacturer sets as the appropriate price for the end consumer to pay

Credit Card Responsibility and Disclosure Act

Limits credit card rates and other fees

Affordable Care Act

Provides access to health care for all Americans

Cost-plus pricing

A method of setting prices in which the seller totals all the costs for the product and then adds an amount to arrive at the selling price

Keystoning

A retail pricing strategy in which the retailer doubles the cost of the item (100 percent markup) to determine the price.

Demand-based pricing

A price-setting method based on estimates of demand at different prices.

Congestion pricing

Pricing strategy of charging a high fee for operating cars during peak traffic times to reduce congestion

Target costing

A process in which firms identify the quality and functionality needed to satisfy customers and what price they are willing to pay before the product is designed; the product is manufactured only if the firm can control costs to meet the required price.

Yield management pricing

A practice of charging different prices to different customers to manage capacity while maximizing revenues.

Price leadership

A pricing strategy in which one firm first sets its price, and other firms in the industry follow with the same or similar prices.

Value, pricing, or everyday low pricing (EDLP)

A prixing strategy in which a firm sets prices that provide ultimate value to customers

High/low pricing, or promo pricing

A retail pricing strategy in which the retailer prices merchandise at list price but runs frequent, often weekly, promotions that heavily discount some products

Skimming Price

A very high, premium price that a firm charges for its new, highly desirable product

Penetration pricing

A pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase it.

Trial pricing

Pricing a new product low for a limited period of time to lower the risk for a customer

Price segmentation

The practice of charging different prices to different market segments for the same product.

Peak load pricing

A pricing plan that sets prices higher during periods with higher demand

Surge pricing

A pricing plan that rises prices of a product as demand goes up and lowers it as demand slides.

Bottom-of-the-pyramid pricing

Innovative pricing strategy in which brands that wish to get a foothold in bottom-of-the-pyramid countries appeal to consumers with the lowest incomes.

Two-part pricing

Pricing that requires two separate types of payments to purchase the product.

Payment pricing

A pricing tactic that breaks up the total price into smaller amounts payable over time.

Subscription pricing

Pricing tactic where customers pay on a periodic basis, normally monthly or yearly, for access to a product.

Decoy pricing

A pricing strategy where a seller offers at least three similar products; two have comparable but more expensive prices, and one of these two is less attractive to buyers, thus causing more buyers to buy the higher-priced, more attractive item

Price bundling

Selling two or more goods or services as a single package for one price.

Captive pricing

A pricing tactic for two items that must be used together; one item is priced very low, and the firm makes its profit on another, high-margin item essential to the operation of the first item.

F.O.B. factory, pricing, or F.O.B. origin pricing

A pricing tactic in which the cost of transporting the product from the factory to the customer’s location is the responsibility of the customer

F.O.B. delivered pricing

A pricing tactic in which the cost of loading and transporting the product to the customer is included in the selling price and is paid by the manufacturer