Chapter 14

Question 1

What is the best way to compete in global markets

Answer 1

design better products that customers perceive as the best value.

Question 2

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.

Answer 2

Value

Question 3

Handing off various parts of your innovation process—often to companies overseas.

Answer 3

Distributed Product Development

Question 4

Everything that consumers evaluate when deciding whether to buy something; also called a value package.

Answer 4

Total product offer

Question 5

A group of products that are physically similar or are intended for a similar market.

Answer 5

Product line

Question 6

The combination of product lines offered by a manufacturer.

Answer 6

Product mix

Question 7

Product differentiation

Answer 7

The creation of real or perceived product differences.

Question 8

Four categories of popular consumer good clasifications

Answer 8

Convenience, shopping, specialty, unsought

Question 9

What are convenience goods

Answer 9

products customers want to purchase frequently and with minimum effort. Gum, candy, gas, etc.

Question 10

What are shopping G&S

Answer 10

Products people buy only after comparing value, price and style.

Question 11

What are specialty G&S

Answer 11

G&S with unique characteristics. High end items, wines, chocolates, etc.

Question 12

What are unsought G&S

Answer 12

G&S consumers don’t think of until they need it. Car towing, funeral, etc.

Question 13

Products used in the production of other products. Sometimes called business goods or B2B goods

Answer 13

Industrial goods

Question 14

Grouping two or more products together and pricing them as a unit.

Answer 14

Bundling

Question 15

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.

Answer 15

Brand

Question 16

A brand that has exclusive legal protection for both its brand name and its design.

Answer 16

Trademark

Question 17

the brand names of manufacturers that distribute products nationally

Answer 17

manufacturers’ (national) brands

Question 18

Products that don’t carry the manufacturer’s name but carry a distributor or retailer’s name instead.

Answer 18

dealer (private-label) brands

Question 19

The value of the brand name and associated symbols.

Answer 19

Brand Equity

Question 20

The linking of a brand to other favorable images.

Answer 20

brand association

Question 21

six stages of product development

Answer 21

product screening
product analysis
development 
testing
commercialization

Question 22

How many ideas for one commercial product

Answer 22

7

Question 23

A process designed to reduce the number of new-product ideas being worked on at any one time.

Answer 23

Product screening

Question 24

Making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas.

Answer 24

Product analysis

Question 25

Taking a product idea to consumers to test their reactions.

Answer 25

Concept testing

Question 26

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.

Answer 26

Commercialization

Question 27

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.

Answer 27

Product life cycle

Question 28

three approaches to pricing

Answer 28

cost base
demand based
competition based

Question 29

In the long run, the __________ determines what the price will be.

Answer 29

market

Question 30

Designing a product so that it satisfies customers and meets the profit margins desired by the firm.

Answer 30

Target pricing

Price decides the design and development from the beginning

Question 31

A pricing strategy based on what all the other competitors are doing. The price can be set at, above, or below competitors’ prices.

Answer 31

competition-based pricing

Question 32

The process used to determine profitability at various levels of sales.

Answer 32

Break-even analysis

Question 33

All the expenses that remain the same no matter how many products are made or sold.

Answer 33

Total Fixed Cost

Question 34

Costs that change according to the level of production.

Answer 34

Variable Cost

Question 35

Strategy in which a new product is priced high to make optimum profit while there’s little competition.

Answer 35

skimming price strategy

Question 36

Strategy in which a product is priced low to attract many customers and discourage competition.

Answer 36

penetration strategy