BUS 100 - Chapter 14

value

good quality at a fair price

total product offer

everything consumers evaluate when deciding whether to buy something

distributed product development

using different locations, often overseas, to handle various parts of the product innovation process

product line

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

product mix

the combination of product lines offered by a manufacturer

product differentiation

creating real or perceived differences between products

convenience goods and services

products consumers buy frequently with minimal effort

shopping goods and services

products consumers compare based on value, quality, price, and style before purchasing

specialty goods and services

products with unique characteristics or brand identity that require special purchasing effort

unsought goods and services

products consumers are unaware of, haven't considered buying, or only need to solve an unexpected problem

industrial/B2B Goods

products used in producing other products or supporting business operations

industrial/B2B goods

products used in producing other products or supporting business operations

packaging

use of packaging to protect, improve, present, and provide information about a product

functions of packaging

attract attention, protect goods, make products easy to use, provide information, explain benefits, provide warnings/warranty information, and communicate price/value/uses

bundling

grouping two or more products together and pricing them as one unit

brand

a name, symbol, or design that identifies a seller's products and distinguishes them from competitors

trademark

a brand with exclusive legal protection for its name and design

manufacturer’s/national brand

a manufacturer's brand distributed nationally

dealer / private-label brand

a product carrying the retailer's or distributor's name instead of the manufacturer's name

generic goods

nonbranded products usually sold at a lower price than national or private-label brands

knockoff brand

an illegal copy of a national brand-name product

brand equity

The value of a brand name and its associated symbols

brand loyalty

the degree to which customers are satisfied with, like, and remain committed to a brand

brand awareness

how quickly or easily a brand comes to mind when its product category is mentioned

brand association

linking a brand with other favorable images or ideas

brand manager

a manager directly responsible for one brand or product line

new-product development process

idea generation → product screening → product analysis → development → testing → commercialization

idea generation

creating new product ideas based on consumer wants and needs

product screening

reducing the number of new-product ideas being considered

product analysis

estimating costs and sales to determine the potential profitability of new-product ideas

product development

creating the product, including building prototypes

concept testing

taking a product idea to consumers to test their reactions

commercialization

bringing a product to market and promoting it to distributors, retailers, and consumers

product life cycle

a model showing how sales and profits for a product class change over time

four stages of the product life cycle

introduction → Growth → Maturity → Decline

introduction stage

the product is first brought to the market

growth stage

sales increase rapidly as more consumers adopt the product

maturity stage

sales growth slows as the product becomes established

decline stage

sales and profits decrease as demand falls

pricing objectives

achieve profit /ROI, build traffic, increase marketshare, create an image, or achieve social objectives

cost-based pricing

setting prices based on the cost of producing a product

demand-based pricing

setting prices based on customer demand and desired profit

target costing

designing a product to satisfy customers while meeting the firm's desired profit margin

competition-based pricing

setting prices based on what competitors are charging

price leadership

one or more dominant firms set pricing practices that competitors follow

break-even analysis

determining profitability at different levels of sales

break-even point

the point where total revenue equals total costs

fixed costs

costs that remain the same regardless of how many products are produced or sold

variable costs

costs that change according to the level of production

skimming price strategy

setting a high initial price to maximize profit when competition is limited

penetration pricing strategy

setting a low price to attract many customers and discourage competition

everyday low pricing (EDLP)

setting consistently low prices without frequent special sales

high-low pricing

setting higher regular prices but frequently offering special sales at lower prices

psychological pricing

setting prices that make products appear less expensive than they actually are

dynamic pricing

changing prices based on demand to maximize profit

nonprice competition

competing using factors other than price, such as image, comfort, style, convenience, durability, and services