Chapter 14 - Pricing goods & services Flashcards
Distributed product development
Handing off various parts of your innovation process
Value
Good quality at a fair price
Total product offer
Everything that consumers evaluate when deciding whether to buy something; value package
Product line
Group of products that are physically similar or are intended for a similar market
Product mix
The combination of product lines offered by a manufacturer
Product differentiation
Creation of real or perceived product differences
Convenience goods and services
Products that consumer wants to purchase frequently and with a minimum of effort
Shopping goods and services
Products bought only after comparing value, quality, price, and style from a variety of sellers
Specialty goods and services
Products with unique characteristics and brand identity (special effort to purchase them)
Unsought goods and services
Products that consumers are unaware of, didn’t really think of buying, or need to buy to solve an unexpected problem
Industrial goods
Products used in the production of other products
Bundling
Grouping two or more products together and pricing them as a unit
Brand
A name, symbol, or design that identifies a good or service 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 design
Manufacturers brands
Brand names of Manufacturers that distributes products nationally
Dealer (private label) brands
Products that don’t carry the manufacturer’s name but carry a distributor or retailers name instead
Generic good
Nonbranded products that sell at a discount
Knock off brands
Illegal copies of national brand-name goods
Brand equity
The value of the brand-name and associated symbols
Brand loyalty
Degree to which customers are satisfied, like the brand, and are committed to further purchases
Brand awareness
How quickly or easily a brand name comes to mind when a product category is mentioned
Brand association
The linking of a brand to other favorable images
Brand manager
Has direct responsibility for one brand or one product line
Product screening
A process designed to reduce the number of new- product ideas being worked on at any one time
Product analysis
Making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas
Concept testing
Taking a product idea to consumers to test their reaction
Commercialization
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
Product life cycle
Model of what happens to sales and profits for a product class over time– introduction, growth, maturity, decline
Target costing
Designing a product so that it satisfies customers and meets the product margins desired by the firm
Competition-based pricing
Pricing strategy based on what all the other competitors are doing
Price leadership
Strategy by which one or more dominate firms set the pricing practices that 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
Costs that change according to the level of production
Skimming price strategy
Strategy in which a new product is priced high to make optimum profit while there’s little competition
Penetration strategy
Strategy on which a product is priced low to attract many customer and discourage competition
Everyday low pricing (EDLP)
Setting prices lower the. Competitors and the. Not having any special sales
High-low pricing strategy
Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than the competitors’
Psychological pricing
Pricing goods and services at price points that make the product appear less expensive than it is
