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Business > Chapter 13: Creating and Pricing Products that Satisfy Customers > Flashcards

Chapter 13: Creating and Pricing Products that Satisfy Customers Flashcards

1
Q

Ch 13

breakeven equity

A

the number of units that must be sold for the total revenue from all units sold to equal the total costs of all units sold

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1
Q

Ch 13

decline

A

stage of the product life-cycle where sales volume decreases sharply

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1
Q

Ch 13

brand recongnition

A

level of brand loyalty at which customers are aware that the brand exists and will purchase it if their preferred brands are unavailable or if they are unfamiliar with available brands

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1
Q

Ch 13

concept testing phase and position

A

third phase of new-product development in which a product idea is presented to a small sample of potential buyers through a written or oral description to determine their attitudes and initial buying intentions regarding the product

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1
Q

Ch 13

brand equity

A

marketing and financial value associated with a brand’s strength in a market

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1
Q

Ch 13

price differentiation

A

a type of demand-based pricing used if a firm wants to use more than one price in the marketing of a specific product by isolating market segments based on different strengths of demand

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1
Q

Ch 13

commercialization phase and position

A

seventh and final phase of new-product development where plans for full-scale manufacturing and marketing must be refined and completed, and budgets for the project must be prepared for the products eventual introduction

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1
Q

Ch 13

price lining

A

the strategy of selling goods only at certain predetermined prices that reflect definite price differences; type of product-line pricing

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1
Q

Ch 13

periodic discounting

A

temporary reduction of prices on a patterned or systematic basis; type of differential pricing

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1
Q

Ch 13

imitations

A

products designed to be similar to -and to compete with- existing products of other firms

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1
Q

Ch 13

cost-based pricing

A

simplest method of pricing in which the cost to produce one unit is added to an amount in order to cover all other costs and profit to determine its selling price

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1
Q

Ch 13

random discounting

A

temporary reduction of prices on an unsystematic basis; type of differential pricing

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1
Q

Ch 13

component part

A

an item that becomes part of a physical product and is either a finished item ready for assembly or a product that needs little processing before assembly

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1
Q

Ch 13

functional modifications

A

changes that affect a product’s versatility, effectiveness, convenience, or safety; usually require redesign on the product

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1
Q

Ch 13

maturity stage

A

stage of the product life-cycle where sales are still increasing in the beginning but the rate of increase has slowed; eventually the sales curve peaks and begins to decline

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1
Q

Ch 13

trademark

A

a brand name or brand mark that is registered with the U.S. Patent and Trademark Office and this is legally protected from use by anyone except its owner

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1
Q

Ch 13

product mix width

A

the number of product lines it contains

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1
Q

Ch 13

packaging

A

all the activities involved in developing and providing a container with graphics for a product

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1
Q

Ch 13

comparison discounting

A

setting a price at a specific level and comparing it with a higher price; type of promotional pricing

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1
Q

Ch 13

bundle pricing

A

packaging together two or more complementary products and selling them for a single price

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1
Q

Ch 13

multiple-unit pricing

A

the strategy of setting a single price for two or more units

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1
Q

Ch 13

process material

A

a material that is used directly in the production of another product but is not readily identifiable in the finished product

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2
Q

Ch 13

pricing strategy

A

a course of action designed to achieve pricing objectives

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3
Q

Ch 13

specialty product

A

an item that possesses one or more unique characteristics for which a significant group of buying consumers is willing to expend considerable purchasing effort

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4
Q

Ch 13

allowance

A

a reduction in price to achieve a desired goal

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6
Q

Ch 13

growth stage

A

stage of the product life-cycle where sales increase rapidly as the product becomes well-known

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7
Q

Ch 13

test marketing phase and position

A

sixth phase of new-product development where there is limited introduction of a product in several towns or cities in order to determine buyers’ probable reactions

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7
Q

Ch 13

store (or private) brand

A

a brand that is owned by an individual wholesaler or retailer

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7
Q

Ch 13

express warranty

A

a written explanation of the producer’s responsibilities in the event that a product is found to be defective or otherwise unsatisfactory

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7
Q

Ch 13

raw material

A

a basic material that actually becomes part of a physical product; usually comes from mines, forests, oceans, or recycled solid wastes

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8
Q

Ch 13

reference pricing

A

pricing a product at a moderate level and positioning it next to a more expensive model or brand

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9
Q

Ch 13

product line

A

a group of similar products that differ only in relatively minor characteristics

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12
Q

Ch 13

FOB destination pricing

A

price includes freight charges

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12
Q

Ch 13

geographic pricing strategies

A

business product pricing that deals with delivery costs

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13
Q

Ch 13

product

A

everything one receives in an exchange, including all tangible and intangible attributes and expected benefits; it may be a good, a service, or an idea

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14
Q

Ch 13

odd-number pricing

A

the strategy of setting prices using odd numbers that are slightly below whole-dollar amounts

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15
Q

Ch 13

business analysis phase and position

A

fourth phase of new-product development that considers how the new product would affect the firm’s sales, costs, and profits

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16
Q

Ch 13

special-event pricing

A

advertised sales or price cutting linked to a holiday, season, or event; type of promotional pricing

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17
Q

Ch 13

product life-cycle

A

a series of stages in which a product’s sales revenue and profit increase, reach a peak, and then decline

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19
Q

Ch 13

individual branding

A

the strategy in which a firm uses a different brand for each of its products

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20
Q

Ch 13

everyday low prices (EDLPs)

A

setting a low price for products on a consistent basis

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21
Q

Ch 13

total cost

A

the sum of the fixed costs and the variable costs attributed to a product

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22
Q

Ch 13

manufacturer (or producer) brand

A

a brand that is owned by a manufacturer

24
Q

Ch 13

variable cost

A

a cost that depends on the number of units produced

26
Q

Ch 13

psychological pricing (6 types)

A

strategies that encourage purchases based on emotional responses rather than on economically rational responses types- odd-number pricing, multiple-unit pricing, reference pricing, bundle pricing, everyday low prices (EDLPs), customary pricing

27
Q

Ch 13

price leaders

A

products priced below the usual markup, near cost, or below cost; type of promotional pricing

28
Q

Ch 13

aesthetic modifications

A

changes directed at the sensory appeal of a product by altering its taste, texture, sound, smell, or visual characteristics

30
Q

Ch 13

screening phase and position

A

second phase of new-product development where ideas that don’t match organization resources and objectives are rejected

30
Q

Ch 13

product mix depth

A

the average number of individual products within each line

32
Q

Ch 13

business service

A

an intangible product that an organization uses in its operations

34
Q

Ch 13

demand-based pricing

A

method of pricing where there is a high price when product demand is strong and low price when weak

35
Q

Ch 13

business product (aka business-to-business product or industrial product)

A

a product bought for resale, for making other products, or for use in a firm’s operations

35
Q

Ch 13

penetration pricing

A

the strategy of setting a low price for a new product

37
Q

Ch 13

brand extension

A

using an existing brand to brand a new product in a different product category

39
Q

Ch 13

shopping product

A

an item for which buying consumers are willing to expend considerable effort on planning and making the purchase

40
Q

Ch 13

trade name

A

the complete and legal name of the organization

41
Q

Ch 13

brand

A

a name, term, symbol, design, or any combination of these that identifies a seller’s products as distinct from those of other sellers

41
Q

Ch 13

brand mark

A

the part of a brand that is a symbol or distinctive design

42
Q

Ch 13

consumer product

A

a product purchased to satisfy personal and family needs

43
Q

Ch 13

quantity discounts

A

discounts given to customers who buy in large quantities

44
Q

Ch 13

quality modifications

A

changes that relate to a product’s dependability and durability and are usually achieved by alterations in the materials or production process

45
Q

Ch 13

brand preference

A

level of brand loyalty at which customers prefer one brand over competing brands, but will buy a competing brand if theirs is unavailable

46
Q

Ch 13

customary pricing

A

pricing on the basis of tradition

47
Q

Ch 13

discount

A

a deduction from the price of an item

48
Q

Ch 13

cash discounts

A

discounts offered for prompt payment

50
Q

Ch 13

fixed cost

A

a cost incurred no matter how many units of a product are sold or produced

50
Q

Ch 13

trade discounts

A

discounts from list prices that are offered to marketing intermediaries (middlemen)

53
Q

Ch 13

transfer pricing

A

prices charged in sales between an organization’s units

55
Q

Ch 13

FOB origin pricing

A

stands for “free on board at the point of origin”; price does not include freight charges

57
Q

Ch 13

price floor

A

the minimum price at which a firm can sell its products without incurring a loss

58
Q

Ch 13

product deletion

A

the elimination of one or more products from a product line

59
Q

Ch 13

generic product (or brand)

A

a product with no brand at all

60
Q

Ch 13

line extension

A

development of a new product that is closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs such as a new flavor or sizes

61
Q

Ch 13

differential pricing (four types)

A

charging different prices to different buyers for the same quality and quantity of product types- negotiated pricing, secondary-market pricing, periodic discounting, and random discounting

63
Q

Ch 13

idea generation phase and position

A

first phase of new-product development that involves looking for product ideas that will help a firm achieve its objectives

64
Q

Ch 13

brand name

A

the part of a brand that can be spoken

66
Q

Ch 13

family branding

A

the strategy in which a firm uses the same brand for all or most of its products

67
Q

Ch 13

price skimming

A

the strategy of charging the highest possible price for a product during the introduction stage of its life-cycle

68
Q

Ch 13

total revenue

A

the total amount received from sales of a product

69
Q

Ch 13

markup

A

the amount a seller adds to the cost of a product to determine its basic selling price

71
Q

Ch 13

brand loyalty

A

extent to which a customer is favorable toward buying a specific brand

74
Q

Ch 13

major equipment

A

large tools and machines used for production purposes

75
Q

Ch 13

supply

A

an item that facilitates production and operations but does not become part of a finished product

78
Q

Ch 13

price competition

A

an emphasis on setting a price equal to or lower than competitors’ prices to gain sales or market share

79
Q

Ch 13

discounts offered for prompt payment

A

cash discounts

82
Q

Ch 13

product mix

A

all the products a firm offers for sale

84
Q

Ch 13

price

A

the amount of money a seller is willing to accept in exchange for a product at a given time and under given circumstances

86
Q

Ch 13

competition-based pricing

A

a type of pricing where costs and revenue are secondary to competitors’ prices

87
Q

Ch 13

adaptations

A

variations of existing products that are intended for an establish market

88
Q

Ch 13

innovations

A

entirely new products that may give rise to a new industry or revolutionize an existing one

89
Q

Ch 13

labeling

A

the presentation of information on a product or its package

90
Q

Ch 13

product development phase and position

A

fifth phase of new-product development in which the company finds out if it is technically feasible to produce the product and then if the product can be made at costs low enough to justify a reasonable price; idea is transformed into a protype

91
Q

Ch 13

premium pricing

A

pricing the highest-quality or most-versatile products higher than other models in the product line; type of product-line pricing

92
Q

Ch 13

product differentiation

A

the process of developing and promoting differences between one’s product and all similar products

93
Q

Ch 13

seasonal discounts

A

price reduction to buyers who purchase out of season

94
Q

Ch 13

negotiated pricing

A

establishing a final price through bargaining; type of differential pricing

96
Q

Ch 13

product modification

A

the process of changing one or more of a product’s characteristics

97
Q

Ch 13

secondary-market pricing

A

setting one price for the primary target market and and a different price for another market; type of differential pricing

99
Q

Ch 13

brand insistence

A

strongest, but least common, level of brand loyalty in which customers strongly prefer one brand and will not not buy substitutes

100
Q

Ch 13

convenience product

A

a relatively inexpensive, frequently purchased item for which buyers want to exert only minimal effort

101
Q

Ch 13

captive pricing

A

pricing the basic product in a product line low, but pricing related items at a higher level; type of product-line pricing

102
Q

Ch 13

non-price competition

A

competition based on factors other than price

103
Q

Ch 13

product-line pricing (3 types)

A

establishing and adjusting the prices of multiple products within a product line; types are captive pricing, premium pricing, and price lining

104
Q

Ch 13

introduction stage

A

stage of the product life-cycle where customer awareness and acceptance of the product are low

105
Q

Ch 13

promotional pricing (3 types)

A

Pricing that is promotion orientated; types are price leaders, special-event pricing, and comparison discounting

106
Q

Ch 13

Top five pricing objectives

A

Survival, profit maximization, target return on investment, market-share goals, status-quo pricing

Business (4 decks)

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