business dynamics chp 15

Value

Good quality at a fair price

Distributed product development

Outsourcing parts of product innovation, often overseas

Total product offer

Everything a consumer weighs before buying: brand, convenience, package, price

Product line

Similar products aimed at a similar market

Product differentiation

Making your product seem different from competitors'

Convenience goods/services

Bought often, with little effort (ex: gum, gas, snacks)

Shopping goods/services

Compared on price/quality before buying (ex: clothes, appliances)

Specialty goods/services

Unique products with strong brand identity (ex: luxury watches)

Unsought goods/services

Products you don't plan to buy until you suddenly need them (ex: insurance, tow trucks)

RFID chips

Tracking tech better than bar codes — reads at a distance, multiple at once

Brand

Name/symbol/design that IDs a seller's goods

Brand Insistence

Only buying one specific brand

Dealer (private-label) brands

Store-brand products, not the manufacturer's name

Factors influencing quality

Price, appearance, reputation

New product development process

7 ideas → 1 product: idea → screening → analysis → development → testing → commercialization

Product screening

Narrowing down ideas to the most promising

Product analysis

Estimating costs & sales to predict profitability

Break-even analysis

Determining profitability at various levels of sales

Skimming price strategy

Start high price, lower later (little competition)

Penetration pricing

Start low price to grab market share fast

Commercialization

Rolling product out with distribution + advertising

Total product offer (LO 14-1)

Everything consumers weigh before buying: price, brand, satisfaction

Product line vs. product mix (LO 14-1)

Line = similar products; Mix = all of a company's lines together

Product differentiation (LO 14-1)

Using price, ads, packaging to seem unique

Consumer goods (LO 14-2)

Sold to individuals for personal use

4 types of consumer goods (LO 14-2)

Convenience, shopping, specialty, unsought

Industrial goods (LO 14-2)

Sold B2B, used to make other products; sold via sales reps not ads

7 functions of packaging (LO 14-3)

Attract attention, protect, be easy to use, describe contents, show benefits, give info, show price/value

Brand / brand name / trademark (LO 14-4)

Brand = ID marker; Brand name = the words; Trademark = legally protected brand

Brand equity & brand association (LO 14-4)

Equity = value of the brand name; Association = linking brand to positive images

Brand managers (LO 14-4)

Handle product, price, place, promotion for one product

6 steps of product development (LO 14-5)

Idea → screening → analysis → development → testing → commercialization

Product life cycle (LO 14-6)

Model of sales/profit over a product's life

4 life cycle stages (LO 14-6)

Introduction, growth, maturity, decline

Pricing objectives (LO 14-7)

Profit, traffic, market share, image, social goals

Pricing strategies (LO 14-7)

Skimming (high→low), penetration (low start), demand-based, competition-based, price leadership

Break-even point (LO 14-7)

Sales = costs; the point where you start profiting

Nonprice strategies (LO 14-7)

Used because price is easy for rivals to copy