4.5 - Product + Pricing

Brand

A name that is identifiable with a product of a particular business.

Brand awareness

The extent to which people recognize a particular brand.

Brand development

The ongoing and long-term marketing process of improving and enlarging the brand name in order to boost sales revenue and market share.

Brand loyalty

When customers buy the same brand of a product repeatedly over time.

Brand switching

When consumers turn to alternative brands mainly because the original brand has lost some of its former appeal.

Brand value

The premium that customers are willing to pay for a brand name over and above the value of the product itself.

Branding

The practice of using an exclusive name, symbol or design to identify a specific product or organization.

Consumer goods

Products bought for personal consumption, such as furniture, computers and fresh flowers.

Customer loyalty schemes

A form of sales promotion used to entice customers to stick to the brand by rewarding devoted customers.

 Extension strategies

Attempts by marketers to lengthen the life cycle of a particular product, typically used during the maturity or early decline stages of the product's life cycle.

Genericised brands

So popular that they become synonymous with the name of the product itself.

Global brands

Highly popular products sold with exactly the same (or very similar) marketing strategies in overseas markets, using the same brand name in different countries.

Innovators

Consumers who strive to be the first to own a certain product, usually due to prestige or loyalty to a particular brand or product.

Logos

A form of branding that uses a visual symbol to represent a business, its brands or its products.

Marketing myopia

A business becomes complacent about its product strategy, thereby failing to keep up with market changes.

Multi-brand strategy

A business developing two or more brands in the same product category.

Producer goods

Products purchased for commercial (business) use, rather than for private consumption.

Product

Any physical or non-physical item (good or service) that is purchased by commercial or private customers.

Product cannibalization

When brands from the same business directly compete with each other.

Product differentiation

Any strategy used to make a product appear to be distinct from others, such as quality, branding and packaging.

The product life cycle

The typical process that products go through from their initial design and launch to their eventual decline and withdrawal at varying speeds .

Product portfolio

The collection of products owned by an organization at any one point in time.

A prototype

A trial product, produced to assess the potential success of the product.

Intangible products

Non-physical services, such as haircuts bus rides and visits to the cinema.

Slogans

Catchphrases used to represent the essence of a business or its products in a memorable way.

Tangible products

Physical goods, such as cars, computers and smartphones.

Test marketing

The trialling a new product with a sample of customers, perhaps in a limited geographical area, to determine the reactions of customers and to gather valuable feedback before a full launch.

A trademark

Legal protection to the owner to have exclusive use of the brand name.

Competitive pricing

The practice of a business setting the price of its goods or services at the same or similar level to that of its competitors.

Contribution pricing

The practice of setting the selling price of a product higher than the direct costs of production per unit in order to ensure there is a positive contribution made towards payment of indirect costs.

Cost-plus pricing (or mark-up pricing)

Adding a percentage or specific amount of profit to the cost per unit of output in order to determine the selling price.

Dynamic pricing

The practice of varying the price of a good or service to reflect changing market demand, such as during different times of the day or year.

Predatory pricing

Temporarily setting prices so low that competitors, especially smaller businesses, cannot compete at a profitable level.

Premium pricing

The price of a good or service is set significantly higher than similar competing products, usually because the product is of higher quality or is sufficiently unique to justify the premium price.

Price

The value of a good or service. It is the amount paid by a customer to purchase the product.

PED

Also known as price elasticity of demand, it is the degree of responsiveness of demand for a product due to a change in the price of that product.

Price wars

Businesses competing by a series of continuous and/or intensive price cuts to threaten the competitiveness of rival firms in the market.

Pricing methods

The various methods of setting the amount that customers pay for certain goods and services.

Loss leader pricing

Setting the price of a good or service below its costs of production. The purpose is to entice customers to buy other products with high profit margins in addition to purchasing the loss leader product.

Mark-up refers

The extra amount charged by a business on top of its unit costs of production in order to earn a positive profit margin. The mark-up can be expressed as an absolute amount (e.g. $10 per unit) or as a percentage of the cost (e.g. 75% per unit).

Penetration pricing

Setting low prices in order to gain entry into a new market. Once the product or brand has established market share, prices can be raised.