Chapter 14 Flashcards
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 in other countries
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
The creation of real or perceived product differences
Product Differentiation
Products that the consumer wants to purchase frequently and with a minimum of effort
Convenience goods and services
Those products that the consumer buys only after comparing value, quality, price, and style from a variety of sellers
Shopping goods and services
Consumer products with unique characteristics and brand identity. Because these products are perceived as having no reasonable substitute, the consumer puts forth a special effort to purchase them
Specialty goods and services
Products that consumers are unaware of, haven’t necessarily thought of buying, or find that they need to solve an unexpected problem
Unsought goods and services
Products used in the production f 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’ Brands
Products that don’t carry the manufacturer’s name but carry a distributor or retailers name instead
Dealer (Private Label) Brands
Nonbranded products that usually sell at a sizable discount compared to national or private-label brands
Generic Goods
Illegal copies of national brand-name goods
Knockoff Brands
The value of the brand name and associated symbol
Brand Equity
The degree to which customers are satisfied, like the brand, and are committed to further purchases
Brand Loyalty
How quickly or easily a given brand name comes to mind when a product category is mentioned
Brand Awareness
The linking of a brand to other favorable images
Brand Association
A manager who has direct responsibility for one brand or one product line, called a product manager in some firms
Brand Manager
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 sale 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
Designing a product so that it satisfies customers and meets the profit margins desired by the firm
Target Costing
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 strategy by which one or more dominant firms set the pricing practices that all competitors in an industry follow
Price Leadership
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 Costs
Costs that change according to the level of production
Variable Costs
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
Setting prices lower than competitors and then not having any special sales
Everyday Low Pricing (EDLP)
Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors
High-Low Pricing Strategy
Pricing goods and services at price points that make the product appear less expensive than it is
Psychological Pricing
