BUS 121 - Chapter 13

Product Life Cycle

Four stages through which a product progresses: introduction, growth, maturity, and decline

Product Development Process

A formal process of generating, selecting, developing, and commerixializing product ideas

Prototypes

Preproduction samples of products used for testing and evaluation

Test Marketing

The stage of product development in which a product is sold on a limited basis to gauge its market appeal

Commercialization

Large-scale production and distribution of a product

Convenience Products

Everyday goods and services that people buy frequently, usually without much conscious planning

Shopping Products

Fairly important goods and services that people buy less frequently with more planning and comparison

Specialty Products

Particular brands that the buyer especially wants and will seek out, regardless of the location of a firm, and to differentiate them from competing products

Brand

A name, term, sign, symbol, design, or combination of those used to identify the products of a firm and to differentiate them from competing products

Brand Equity

The value that a company has built up in a brand

Brand Loyalty

The degree to which customers continue to purchse a specific brand

Brand Names

The portion of brands htat can be expressed orally, including letters, word, or numbers

Brand Marks

The portion of brands that cannot be expressed verbally

Logo

A graphical and/or textual representation of a brand

Trademarks

Brands that have been given legal protection so that their owners have exclusive rights to their use

National Brands

Brands owned by manufacturers and distributed nationally

Private Brands

Brands that carry the label of a retailer or a wholesaler rather than a manufactuer

Co-branding

A partnership between two or more companies to closely link their brand names together for a single product

Brand Licensing

An agreement in which one company pays to use another company’s brand on its products

Brand Managers

Managers who develop and implement the marketing strategies and programs for specific products or brands

Product Line

A series of related products offered by a firm

Product Mix

The compete portfolio of products that a company offers for sale

Family Branding

Using a brand name on a variety of related products

Brand Extension

Applying a succesful brand name to a new product category

Expense Items

Inexpensive goods generally used within a year of purchase

Capital Items

More expensive organizational products with a longer useful life, ranging from office and plant equipment to entire factories

Price Elasticity

A measure of the sensitivity of demand to changes in price

Fixed Costs

Business costs that remain constant regardless of the number of units produced

Variable Costs

Business costs that increase with the number of units produced

Break-even Analysis

A method of calculating the minimum volume of sales needed at a given price to cover all costs

Break-even Point

Sales volume at a given price that will cover all of a company’s cost

• Fixed costs/(selling price - variable costs per unit)

Cost-based Pricing

A method of setting prices based on production and marketing costs, rather than conditions in the marketplace

Value-based Pricing

A method of setting prices based on customer perceptions of value

Competition-based Pricing

A method of setting prices based on what suppliers of similar products are charging

Algorithimic Pricing

A variety of computational methods are used to set price, either in more nuanced ways than simple cost- or competition-based pricing or in dynamic ways that respond in real time to fluctuations in demand and other market conditions

Skim Pricing

Charging a high price for a new product during the introductory stage and lowering the price later

Penetration Pricing

Introducing a new product at a low price in hopes of building sales volume quickly

Loss-leader Pricing

Selling one product at a loss as a way toe entice customers to consider other products

Freemium Pricing

A hybrid pricing strategy (free + premium) of offering some products for free while charging for others, or offering a product for free to some customers while charging others for it

Subscription Pricing

A pricing model in which customers are charged a recurring fee for the right to continuing using a product

Discounts

Temporary price reductions to stimulate sales or lower prices to encourage certain behaviors, such as paying with cash

Bundling

Offering serval products for a single price that is presumably lower than the total of the products’ individual prices

Virtual Reality (VR)

Computer-generated simulations that create the senstion of being in a real environment

Augmented Reality (AR)

Systems that superimpose visual or textual information on live images of real scenes

Metaverse

Technology that extends the idea of VR to an immersive, shared, and persistent virtual universe that could end up functioning as a virtual economy