Chapter 5,7,9 Flashcards
What is a feasibility study?
Knowing if the business is viable, practical and possible.
What questions do the marketing and production teams need to ask?
Marketing: Can we sell it?
Production and design: Can we produce it?
What is the difference between an invention and an innovation?
Inventions: New devices, methods, or processes developed from study and experimentation Ex: Fridge, microwave, telephone
Innovations: Products that use new technology, items, or processes to change the methods used to produce products, or to change the ways used to distribute them
Ex: They offered taxis by innovating it and creating Uber. They made the process of taxis to make it better
Example: Fridge, microwave, telephone.
What are the stages of product development?
(Find a product to go through all stages)
Idea generation, idea screening, concept development, market strategy, feasibility study, product design, test marketing, market entry.
What is a cost-benefit analysis?
to assess the advantages and disadvantages for a marketing decision, project. (If the product is even worth it for the cost )
How to calculate the break-even point of a product
Break-Even point (sales dollars) = Fixed Costs ÷ Contribution Margin
What you need to know when calculating the break-even price
The number of units that a business must sell at a given price to cover its costs
What is needed to calculate BEP?
Needed → variable costs, fixed costs, and gross profit
How do you calculate the break-even point in sales dollars?
Break-Even point (sales dollars) = Fixed Costs ÷ Contribution Margin
What are variable costs?
Most often directly dependent on the quantity of goods sold or services rendered
What are fixed costs?
Fixed costs are constant, independent of sales or other variables. Examples include Rent, Salaries, and Insurance.
What is double ticketing?
Double ticketing: placing 2 prices on the same product and charging the higher price
What is price fixing?
Businesses are not allowed to decide as a group what to charge for a specific product
