bsuines baka ch 5

brand insistence

degree of brand loyalty in which a customer strongly prefers a specific brand and will accept no substitute, willing to spend a great deal of effort and time for the brand.

pricing decisions

can be based on determining whether the demand for a product is price elastic or price inelastic.

elastic

price goes up, demand goes down

inelastic

people but no matter price, includes necessities such as gas, utilties, and electricity.

when is a marketer in a better position to establish prices?

when it knows the prices charged for competing brands

line extensions

used to expand a product line, involves new products that are variations of existing things (different flavors or sizes) or creating similar products that are related to the original product line in some way.

screening stage

process of choosing the most promising ideas for further review, ideas are analyzed to determine if they match with the organization’s mission, objectives, and resources.

when does competition based pricing become important?

when products in an industry are relatively homogenous and price is a key purchase consideration.

product differentiation

emphasizing the product services that are offered, true when consumers perceive all products in a market to have the same quality, design, and features.

accessory equipment/business products example

a distributor of plumbing supplies purchases a computer to aid in inventory, it is for the business to make money/to help it run.

conditions for product modification

product must be modifiable, customers should be able to tell a change, and modification should change customer desires to provide satisfaction.

example of a component part

set of Bowers & Wilkins car speakers sold to Volvo for use in the production of a XC90 SUV

why are line extensions more common than new products?

less expensive and lower risk

markup

percentage of selling price or percentage of cost

test marketing

limited introduction of the product in areas chosen to represent the intended market

concept testing

stage of new product development process where customers are exposed to the new product idea

a good product

offers innovative benefits

private distributor brands & examples

owned by retailers or wholesalers and do not identify the manufacturer of the product (target vitamins)

process materials

products used directly in the production of a final product but that are not easily identifiable

two difficulties in the introduction stage

sellers lack resources to launch product or initial product price may have to be high to recoup costs

business goal during the growth stage of the product life cycle

achieving greater penetration of the market

profits in the introduction stage of successful products

negative and increasing

co branding

capitalizing on the brand equity of two separate brands

price competition

allows a marketer to set prices based on demand of product or in response to changes in firms finances, however it can be applied by competitors. if a company’s price is beat or matched it is called a price war

breakeven point

money a company makes selling = the amount spent producing