Chapter 14 Flashcards
What is the best way to compete in global markets
design better products that customers perceive as the best value.
Good quality at a fair price. When consumers calculate the value of a product, they look at the benefits and then subtract the cost to see if the benefits exceed the costs.
Value
Handing off various parts of your innovation process—often to companies overseas.
Distributed Product Development
Everything that consumers evaluate when deciding whether to buy something; also called a value package.
Total product offer
A group of products that are physically similar or are intended for a similar market.
Product line
The combination of product lines offered by a manufacturer.
Product mix
Product differentiation
The creation of real or perceived product differences.
Four categories of popular consumer good clasifications
Convenience, shopping, specialty, unsought
What are convenience goods
products customers want to purchase frequently and with minimum effort. Gum, candy, gas, etc.
What are shopping G&S
Products people buy only after comparing value, price and style.
What are specialty G&S
G&S with unique characteristics. High end items, wines, chocolates, etc.
What are unsought G&S
G&S consumers don’t think of until they need it. Car towing, funeral, etc.
Products used in the production of other products. Sometimes called business goods or B2B goods
Industrial goods
Grouping two or more products together and pricing them as a unit.
Bundling
A name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors.
Brand
A brand that has exclusive legal protection for both its brand name and its design.
Trademark
the brand names of manufacturers that distribute products nationally
manufacturers’ (national) brands
Products that don’t carry the manufacturer’s name but carry a distributor or retailer’s name instead.
dealer (private-label) brands
The value of the brand name and associated symbols.
Brand Equity
The linking of a brand to other favorable images.
brand association
six stages of product development
product screening product analysis development testing commercialization
How many ideas for one commercial product
7
A process designed to reduce the number of new-product ideas being worked on at any one time.
Product screening
Making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas.
Product analysis
Taking a product idea to consumers to test their reactions.
Concept testing
Promoting a product to distributors and retailers to get wide distribution, and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and consumers.
Commercialization
A theoretical model of what happens to sales and profits for a product class over time; the four stages of the cycle are introduction, growth, maturity, and decline.
Product life cycle
three approaches to pricing
cost base
demand based
competition based
In the long run, the __________ determines what the price will be.
market
Designing a product so that it satisfies customers and meets the profit margins desired by the firm.
Target pricing
Price decides the design and development from the beginning
A pricing strategy based on what all the other competitors are doing. The price can be set at, above, or below competitors’ prices.
competition-based pricing
The process used to determine profitability at various levels of sales.
Break-even analysis
All the expenses that remain the same no matter how many products are made or sold.
Total Fixed Cost
Costs that change according to the level of production.
Variable Cost
Strategy in which a new product is priced high to make optimum profit while there’s little competition.
skimming price strategy
Strategy in which a product is priced low to attract many customers and discourage competition.
penetration strategy
