Goods and Pricing Chapter 14 PDF

Preview

Summary

Overview of Goods and Pricing...

Description

Chapter 14 Developing and Pricing Goods and Services I.

Product Development

Value Definition: Good quality at a fair price value =benefits− cost

Distributed Product Development Definition: used to describe handing off various parts of your innovation process often to companies overseas. Total Product Offer Definition: consists of everything consumers evaluate when deciding whether to buy something

Product Line Definition: group of products that are physically similar or intended for a similar market Product Mix Definition: combination of all product lines offered by a manufacturer

II.

Product Differentiation

Product Differentiation Definition: creation of real or perceived product differences. Convenience Goods and Services Definition: products that consumer wants to purchase frequently and with a minimum of effort, like candy, gum, milk, snacks, gas and banking services. Shopping Goods and Services Definition: products the consumer buys only after comparing value, quality, price, and style from a variety of sellers. Specialty Goods and Services Definition: consumer products with unique characteristics and brand identity. Unsought Goods and Services Definition: products consumers are unaware of, have not necessarily thought of buying, or suddenly find they need to solve an unexpected problem. Industrial Goods Definition: products used in the production of other products. Sold in the buissness to buisness market.

III.

Packaging Changes the Product

Packages Must 1. Attract the buyers attention 2. Protect the goods inside, stand up under handling and storage, be tamper proof and deter theft 3. Be easy and open to use 4. Describe and give information about the contents 5. Explain the benefits of the good inside Bundling Definition: combines goods and services for a single price

IV.

Branding and Brand Equality

Brand Definition: name, symbol, or design that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors. Reaching Beyond Our Borders Definition: box discusses product names in more depth Trademark Definition: brand that has exclusive legal protection for both its brand name and its design Manufactures Brands Definition: represent manufacturers that distribute products nationally Generic Goods Definition: non branded products that usually sell at a sizable discount compared to national or private label brands. Knockoff Brands Definition: illegal copies of national brand-name goods. Brand Equity Definition: value of the brand name and associated symbols Brand Loyalty Definition: the degree to which customers are satisfied, like the brand, and are committed to further purchases Brand Insistence Definition:when a customer insists on one specific brand, making the product a specialty good.

Brand Awareness Definition: refers to how quickly or easily a given brand name comes to mind when someone mentions a product category Brand Association Definition: the linking of brand to other favorable images Brand Manager Definition: manager has direct responsibility for one brand or product line

V.

New Product Development Process

Product Screening Definition: 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 Analysis Definition: making cost estimates and sales forecast to get a feeling for the profitability of a new-product ideas. Concept Testing Definition: takes a product idea to consumers to test the reaction

Commericization Definition: promoting a product 1. Promoting the product to distributors and retailers to get wide distribution 2. Developing strong advertising and sales campaign to generate and maintain interest in the product among distributors and consumers.

VI.

The Product Life Cycle

Product Life Cycle Definition: four stages of life 1. Introduction 2. Growth 3. Maturity 4. Decline

VII. 1. 2. 3. 4. 5.

Competitive Pricing Achieving a target return on investment or profit Building Traffic Achieving Greater Market Share Creating an Image Furthering Social Objectives

Target Costing Definition: demand based. Design a product so it not only satisfies customers but also meets the profit margins set. Competition-Based Pricing Definition: strategy based on what all the other competitors are doing Price Leadership Definition: is the strategy by which one or more dominant firms set pricing practices all competitors in an industry follow

Break-Even Analysis Definition: process used to determine profitability at various levels of sales. Break-even point is the point where revenues from sales equal all cost Total Fixed Cost Definition: all the expenses that remain the same no matter how many products are made or sold. Variable Cost Definition: change according to the level of production Skimming Price Strategy Definition: prices a new product high to recover research and development cost and make as much profit as possible while there is little competition. Penetration Strategy Definition: enables the firm to penetrate or capture a large share of the market quickly Everyday Low Pricing Definition: set prices lower than competitors and don't usually have special sales. High-low pricing strategy Definition: regular prices are higher than at stores using EDLP but during special sales they are lower Psychological Pricing Definition: pricing goods and services at price points that make the product appear less expensive than it is Variable Price Definition: change according to level of production

VIII.

Non Price Competition...