Value package-a product is marketed as a bundle of value-adding attributes, including a reasonable cost, features, and benefits

Product features-tangible and intangible qualities that a company builds into its products

Product Benefits-these include what products can do emotionally or physically for consumers

Industrial buyer-a company or other organization that buys products for use in producing other products (goods or services)

Convenience goods-inexpensive physical goods that are consumed rapidly and regularly

Convenience services-inexpensive services that are consumed rapidly and regularly

Shopping goods-moderately expensive, infrequently purchased physical goods(appliances & mobile phones)

Shopping services-moderately expensive, infrequently purchased services (hotels & airfare)

Specialty goods-expensive, rarely purchased physical goods Ex: Wedding Gowns and Tuxedoes

Specialty services-expensive, rarely purchased services Ex: Catering for Wedding Receptions and Health Care Insurance

Production items-goods or services that are used in the conversion (production) process to make other products Ex: Rubber and Leather to make cars

Expense items-industrial products purchased and consumed within a year by firms producing other products Ex: Rent, Utilities, Wages, Salaries

Capital items-expensive, long-lasting, infrequently purchased industrial products, such as a building, or industrial services, such as a long-term agreement for data warehousing services Ex: Tools, Machinery, Buildings, Vehicles

Product Mix-the group of products that a firm makes available for sale

Product line-group of products that are closely related because they function similarly or are sold to the same customer group who will use them in similar ways

New Product development process-Long, complex process that usually involves risky commitments of time and resources

Product mortality rates-It takes roughly 50 new product ideas to generate one product that reaches the marketplace

Speed to market-strategy of introducing new products to respond quickly to customer or market changes

Product ideas-typically come from consumers, the sales force, R&D departments, suppliers, or engineering personnel

Screening-eliminate ideas that do not mesh with the firm’s abilities or objectives Representatives from marketing, engineering, operations, and finance typically participate

Concept testing-companies use market research to get consumers’ input about benefits and prices

Business analysis-After gathering consumer opinions, marketers compare production costs and benefits to see whether the product meets minimum profitability goals

Prototype development-engineering, R&D, or design groups produce a prototype Expenses will increase at this stage of new development

Product testing and test marketing-test the product to see if it meets performance requirements, If the testing works the company goes into limited production, Most time-consuming step

Commercialization-If the test marketing works and proves positive, the company begins full-scale production and marketing. Timing is extremely important into the commercialization stage to make it the most successful possible situation for the company

Stages in the product life cycle-Introduction, Growth, Maturity, Decline

Introduction(PLC)-This begins when the product enters the marketplace during the commercialization step. Marketers focus on making potential customers aware of the product and its benefits. Companies advertise heavily

Growth(PLC)-Sales and profits begin to climb in this phase, Companies are still advertising heavily in this phase of the product life cycle. Discounts and pricing tactics are used in this phase to get more people buying the product

Maturity(PLC)-This is the longest stage of the product life cycle; this is the highest profit level for a company. Sales growth begins to slow but profit remains high, towards the end of this stage sales begin to fall. Companies will advertise less during this phase with little price reductions

Decline(PLC)-Sales and profits will continue to fall during this stage. Advertising is nonexistent in this phase, but price reductions and discounts are used heavily to sell left over product. This stage gives the opportunity for companies to reinvigorate the product and move it back to the introduction phase with new features to the product

Product extension-marketing an existing product globally instead of just domestically

Product adaption-modifying an existing product for greater appeal in different countries

Product reintroduction-reviving obsolete or older products for new markets

Branding-process of using symbols, names, logos, and colors to communicate the qualities and features of a product made by a particular producer

Branding awareness-The extent to which a brand name comes to mind when a consumer considers a particular product category

Product placement-promotional tactic for brand exposure in which characters in television, film, music, magazines, or video games use a real product with its brand visible to viewers

National brands-brand name product produced by, widely distributed by, and carrying the name of a manufacturer

Licensed brands-brand name product for whose name the seller has purchased the right from an organization or individual

Private brand(or private label)-brand name product that a wholesaler or retailer has commissioned from a manufacturer

Packaging-physical container in which a product is sold, advertised, or protected

Pricing-process of determining what a company will receive in exchange for its products

Pricing Objectives-the goals that sellers hope to achieve in pricing products for sale

Profit Maximizing objectives-the seller’s pricing decision is critical for determining the firm’s revenue, which is the result of the selling price times the number of units sold

Market share-company’s percentage of the total industry sales for a specific product type

Cost oriented pricing-pricing that considers the firm’s desire to make a profit and its need to cover production costs

Markup-amount added to an item’s purchase cost to sell it at a profit

Variable cost-cost that changes with the quantity of a product produced and sold

fixed cost-cost that is incurred regardless of the quantity of a product produced and sold

beka even point-sales volume at which the seller’s total revenue from sales equals total costs (variable and fixed) with neither profit nor loss

Price skimming-setting an initially high price to cover new product costs and generate a profit

Penetration pricing-setting an initially low price to establish a new product in the market

dynamic pricing-These prices change based on information from consumers and could change based on product availability

fixed pricing-Prices will remain constant throughout retailers and don’t change based on location, availability, etc.

Bundling strategy-grouping several products together to be sold as a single unit at a reduced price, rather than individually

Price lining-setting a limited number of prices for certain categories of products (A store predetermines three or four price points at which a particular product can be sold)

Psychological pricing-pricing tactic that takes advantage of the fact that consumers do not always respond rationally to stated prices

Odd-even pricing-psychological pricing tactic based on the premise that customers prefer prices not stated in even dollar amounts

Dumping-Selling a product below cost/below the price of the home country in a foreign market to increase market share (This is illegal in the United States)