Ch12 Flashcards
Value
Good quality at a fair price. When consumers calculate value of a product, they look at the benefits and then subtract the cost to see if the benefits exceed the cost
Total product offer
Consists of everything consumers evaluate when deciding whether to buy something
Product line
A group of items that are physically alike or intended for a similar market
Product mix
The combination of product lines offered by a manufacturer
Product differentiation
The creation of real or perceived product differences
Bundling
Combines goods and/or services for a single price
Brand
A name, symbol, or design (or combination of) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors
Trademark
A brand that has exclusive legal protection for both its brand name and its design
Brand equity
The value of the brand name and associated symbols
Brand loyalty
The degree of which customers are satisfied, like the brand, and are committed to further purchases
Brand awareness
How quickly or easily a given brand name comes to mind when someone mentions a product category
Brand manager
A manager directly responsible for one brand or one product line; called a product manager in some firms
Product life cycle
A theoretical model of what happens to sales and profits for a product class over time; the 4 stages of the cycle are introduction, growth, maturity, and decline
Target costing
Designing a product so that it satisfies customers and meets the profit margins desired by the firm
Competition based pricing
Strategy based on what all the other competitors are doing
Price leading
Strategy by which one or more dominant firms set pricing practices all competitors in an industry follow
Break even analysis
Process used to determine profitability at various levels of sales
Total fixed costs
All the expenses that remain the same no matter how many products are made or sold
Variable costs
Price changes according to the level of production
Skimming price strategy
Prices a new product high to recover research and development costs and make as much profit as possible while there is little competition
Penetration strategy
Strategy in which a product is priced low to attract many customers and discourage competition
Every day low pricing (EDLP)
Setting prices lower than competitors and then not having any special sales
High-low price strategy
Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors
Psychological pricing
Pricing goods and services at price points that make the product appear less expensive than it is
