Chapter 14: Developing and Pricing Goods and Services

Marketing is a set of processes for creating, communicating, and delivering __________ to customers

value

When consumers calculate the value of a product, they …..

look at the benefits and subtract them from the price

_____________________ is the term used to describe handing off various parts of your innovation process (often to companies overseas)

Distributed product development

A _________________ consists of everything consumers evaluate when deciding whether to buy something.

total product offer or value package

A product line is a group of products that are ……………

physically similar or intended for a similar market.

A product mix is the combination of …….

product lines offered by a manufacturer

Product differentiation is the creation of ………

real or perceived product differences

_______________________ are products the consumer wants to purchase frequently and with a minimum of effort

Convenience goods and services

_________________ are products the consumer buys only after comparing value, quality, price, and style from a variety of sellers.

Shopping goods and services

_____________________ are consumer products with unique characteristics and brand identity, and have no reasonable substitute

Specialty goods and services

_____________________ are products consumers are unaware of, haven’t necessarily thought of buying, or suddenly find they need to solve an unexpected problem.

Unsought goods and services

Whether a good or service falls into a particular class depends on

the individual consumer

____________ are products used in the production of other products

Industrial goods

Industrial goods are sold in which market?

The business to business market

___________ consist of major capital equipment such as new factories and heavy machinery.

Installations

_______________ are expensive products that last a long time.

Capital items

____________________ consists of capital items that are not quite as long-lasting or expensive as installations

Accessory equipment

All of these describe what?

1. Attract the buyer’s attention.

2. Protect the goods inside, stand up under handling and storage, be tamperproof, and deter theft.

3. Be easy to open and use.

4. Describe and give information about the contents.

5. Explain the benefits of the item(s) inside.

6. Provide information on warranties, warnings, and other consumer matters.

7. Give some indication of price, value, and uses.

what packages must be able to do

Packages must be able to attract…..

the buyer’s attention

Packages must be able to ……….

protect the goods inside

Packages must be easy to…….

open and use

Packages should describe……

and inform about the contents

Packages should explain the products ……

benefits

Packaging may make use of a strategy called ______________, which combines goods and/or services for a single price.

bundling

____________ is a name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors.

Brand

_________________ is a brand that has exclusive legal protection for both its brand name and its design

Trademark

_________________ represent manufacturers that distribute products nationally—Intel, Coca-Cola, and Nestlé, for example.

Manufacturers’ (national) brands

__________________________ are products that don’t carry the manufacturer’s name but carry a distributor’s or retailer’s name instead.

Dealer (private-label) brands

A ___________ is the name for a whole product category

generic name

___________ are nonbranded products that usually sell at a sizable discount compared to national or private-label brands.

Generic goods

______________ are illegal copies of national brand-name goods.

Knockoff brands

_______________ is the value of the brand name and associated symbols

Brand equity

______________ is the degree to which customers are satisfied, like the brand, and are committed to further purchases.

Brand Loyalty

___________________ refers to how quickly or easily a given brand name comes to mind when someone mentions a product category.

Brand awareness

_____________ is the linking of a brand to other favorable images, like famous product users, a popular celebrity, or a particular geographic area.

Brand association

The person responsible for building brands is known as a ………

brand manager or product manager

Brand managers have direct responsibility for …..

a brand/product line

manage the marketing mix (all 4 P’s)

The first step in the New-Product Development process is to …..

generate an idea based on customers wants/needs

The second step in the New-Product Development process is to …..

Screen the product

The third step in the New-Product Development process is to …..

Analyze the product

The fourth step in the New-Product Development process is to …..

develop the product

The fifth step in the New-Product Development process is to …..

test the product

The sixth (and final) step in the New-Product Development process is to …..

commercialize the product

It now takes about ___________ to generate one commercial product.

seven ideas

Most ideas for new industrial products come from …..

employee suggestions

____________________ reduces the number of new-product ideas a firm is working on at any one time so it can focus on the most promising

Product screening

___________ applies criteria to determine whether the product fits well with present products, has good profit potential, and is marketable

Screening

After product screening comes ______________

product analysis

Product analysis involves making …………

cost estimates and sales forecasts

Product analysis is used to get a feeling for the …..

profitability of new product ideas

If a product passes the screening and analysis phases, the firm begins ….

the development phase

___________________ takes a product idea to consumers to test their reactions.

Concept testing

_____________________ includes promoting a product to distributors and retailers to get wide distribution and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and consumers.

Commercialization

Once a product has been developed and tested, it goes to market where it must pass the ……

product life cycle

Name the 4 stages of the product life cycle:

introduction, growth, maturity, and decline

profit levels start to fall _____________ sales reach their peak

(a) before (b) when (c) after

before

______________ is one of the most difficult of the four Ps for a manager to control because it’s a critical ingredient in consumer evaluations of the product

Price

In the long run, _____________ determines what the price will be

the market

___________________ involves designing a product so that it satisfies customers and meets the profit margins desired by the firm.

Target costing

________________ is a strategy based on what all the other competitors are doing.

Competition-based pricing

_____________________ is the strategy by which one or more dominant firms set pricing practices all competitors in an industry follow.

Price leadership

_______________________ is the process used to determine profitability at various levels of sales.

Break-even analysis

The break-even point is the point where………….

revenues from sales equal all costs

_____________ are all the expenses that remain the same no matter how many products are made or sold

Total fixed costs

_______________ are costs that change according to the level of production

Variable costs

A ________________________ prices a new product high to recover research and development costs and make as much profit as possible while there’s little competition.

skimming price strategy

__________________ is a pricing strategy in which a product is priced low to attract many customers and discourage competition.

Penetration strategy

_______________ is a pricing strategy where company’s set prices that are higher than EDLP stores, but have many special sales where the prices are lower than competitors’.

High-low pricing strategy

____________________ means pricing goods and services at price points that make the product appear less expensive than it is.

Psychological pricing

__________________ seeks to maximize profit by changing the price based on demand.

Dynamic pricing

Many small organizations promote _______________ that accompany basic products rather than price in order to compete with bigger firms.

the services

Selling only one product is 

(a) unusual (b) not surprising (c) normal

unusual

Companies usually offer a product line instead of just one product to:

• appeal to similar consumer markets

• meet the competition

• tailor their offerings more closely to consumer wants

Distributed product development is the term used to describe handing off various parts of the ______________ process—often to companies overseas.

innovation

McDonald's Golden Arches, Nike's Swoosh, and the Pillsbury Dough Boy all help to distinguish these companies from their competitors. As such, they are examples of ______.

a brand

A major reason why many new products fail is that they ______.

are too similar to competitors

The introduction stage of the product life cycle is marked by ______.

• low sales

• few competitors

Justifying a new product's fit, profit potential, and marketability is known as ______

product screening