The Marketing Mix- Product and Price Key Terms

Product

goods or services that are the end result of the production process and are sold on the market to satisfy customer needs

Marketing mix

the four key decisions on product, price, promotion and place that must be taken to enable the effective marketing of a product

Goods

products which have a physical existence, such as washing machines and chocolate bars

Services

products which have no physical existence, but satisfy consumer needs in other ways, such as hairdressing, car repairs, childminding and banking

Brand

an identifying symbol, name, image or trademark that distinguishes a product from its competitors

Intangible attributes

the subjective opinions of customers about a product, which cannot be measured or compared easily

Tangible attributes

the measurable features of a product, which can be easily compared with other products

New product development (NPD)

the design, creation and marketing of new goods and services

Unique selling point (USP)

the special feature of a product that makes it different from competitors' products

Product differentiation

the unique qualities of a product that lead to a difference between the product and competitors' products

Product positioning

consumers' view of a product or service as compared to its competitors

Product portfolio analysis

analysing the range of existing products of a business to help allocate resources effectively between them

Product life cycle

the pattern of sales for a product from launch to withdrawal from the market

Consumer durable

a manufactured product that can be re-used and is expected to have a reasonably long life, such as a car or washing machine

Extension strategy

a marketing plan to extend the maturity stage of the product before a completely new one is launched

Boston Matrix

a method of analysing the product portfolio of a business in terms of market share and market growth

Mark-up pricing

adding a fixed mark-up for profit to the unit cost of buying in a product

Cost-plus pricing

setting a price by calculating a total unit cost for the product and then adding a fixed profit mark-up

Contribution-cost pricing

setting prices based on the variable costs of making a product, in order to make a contribution towards fixed costs and profit

Competitive pricing

making pricing decisions based on the price set by competitors

Price discrimination

charging different groups of consumers different prices for the same good or service

Dynamic pricing

offering products at a price that changes according to the level of demand and the customer's ability to pay

Penetration pricing

setting a relatively low price to achieve a high volume of sales

Market skimming

setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand

Psychological pricing

setting a price at a level which matches consumers' views about a product's perceived value