Product and price Flashcards
1
Q
What is a product?
A
Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
2
Q
What is a service?
A
An activity, benefit or experience offered for sale; it is intangible and only exists as an interaction between a company and a customer
3
Q
What is product in terms of the 4Ps?
A
Refers to the set of decisions around creating value for the customer
4
Q
What are the different types of B2C products?
A
Convenience - routine purchases
Shopping - comparison-based purchases
Specialty - effortful/unique purchases
Unsought - unlikely/risky/undesirable purchases - avoid negative outcomes
5
Q
What are types of convenience products?
A
Necessities, toiletries, etc.
6
Q
What are types of shopping products?
A
Clothing, cars, etc.
7
Q
What are types of specialty products?
A
Luxurious goods
8
Q
What are types of unsought products?
A
Warranties, guarantees, medicine, coffins, etc.
9
Q
What are different types of B2B products?
A
Industrial products - bought by individuals and organizations for further processing or for use in conducting a business
- materials, capital items, supplies
Industrial services - bought by individuals and organizations to solve a problem that is outside their core competencies
- consulting, repairs, contract work
10
Q
What is the difference between core and whole products?
A
Core product is what we call a ‘product’ so far
Whole product refers to the entire experience that a customer is seeking from their purchase
Customers care about the ‘quality’, packaging and brand
11
Q
What is quality?
A
The characteristics of a product or service that impact its ability to satisfy customer needs
12
Q
Features vs. design
A
Features:
- refer to what the product does to meet needs
- they are how you know the product category
Design:
- refer to how the product meets those needs
- what allows for 1 product with different benefits
13
Q
What is packaging?
A
The container/wrapper for a product including the way a product/service is presented
14
Q
What does packaging do?
A
- attract buyers/close a sale
- communicate positioning
- facilitate product delivery
- engage customers
15
Q
What is brand equity?
A
The effect that knowing a brand name has on customer response to a product or its marketing
16
Q
What are the additional Ps for services?
A
Process
People
Physical evidence
17
Q
What is servicescapes?
A
The environment in which the service is delivered and where the firm and customer interact
It impacts:
- purchase decisions
- post-purchase evaluations
- customer satisfaction
18
Q
What is a brand?
A
The brand is the company itself. An entity with which we form a relationship with the company.
19
Q
What is brand architecture?
A
A product line consists of closely related products that:
- have similar functions and customer groups
- are sold through similar outlets/fall within price ranges
- carry the same brand name
20
Q
What is the width?
A
Refers to the number of a company’s. product lines
21
Q
What is the length?
A
The number of items in the line
22
Q
What is the depth?
A
The number of versions available of each item
23
Q
What is product line filling?
A
New products/variations that customers expect to see
24
Q
What is a product line stretching?
A
Introducing a product which customers were not expecting to see
25
What is product line consistency?
How the product lines relate to each other
26
Where do the major consumer brand perception dimensions come from?
This is what brand equity is.
Differentiation, relevance, esteem and personality
27
What is differentitation?
Does the brand stand out?
28
What is the relevance?
How easily does the brand come to the mind?
29
What is esteem?
Is the brand a high status brand?
30
What is the personality?
Is the brand warm or competent?
31
What is the product life-cycle?
Development, introduction, growth, maturity, decline
32
What are the stages in product development?
Product innovation, planning, sanity checks, testing, launch
33
What is step 1.1 Idea generation?
Systematic search for new product ideas:
Internal sources:
R & D
External sources:
Acquisitions
Customers
34
What is step 1.2 Idea screening?
Should be free to come up with crazy suggestions and screening is where they are ruled out
35
What is step 1.3 Concept development?
A product concept is a detailed version of the new product idea stated in meaningful consumer terms
There is a prototype
35
What is the minimum viable product?
A prototype which is fully function without any of the bells and whistles with it
35
What is consumer-centric design?
It is the responsibility of the designer to make the designs and it is not their fault if the consumer does uses the product wrong
"Norman Doors" - 'push' doors instead of pull
36
What are the 5 steps of consumer-centered design?
1. Affordances - what you can do with the product
2. Signifiers - how you know what the product affords
3. Mapping - how you actions lead to the desired outcomes
4. Feedback - how you know the product is working
5. Conceptual models - the metaphors that help you to understanding how the product works
37
What is the step 1.4 Market planning?
Craft your marketing plan:
Situation analysis
Strategy development
Implementation tactics
Financial projections
38
What are steps 1.5/1.6 Sanity checks?
Formally evaluate the value proposition and target market and your ability to create and capture value
39
What is step 1.7 Test marketing?
Put the product out to a small segment of the market to make sure customers are responding to the product the way you want them to
40
What is step 1.8 New product launch?
Introduction of the product
41
What is step 2 New product introduction?
Consider:
- When to launch new product?
- Where to launch?
- Who to target?
42
What is step 3 Growth?
Characterized by the product achieving mainstream demand
Necessary but not sufficient
43
What is step 4 Maturity?
Characterized by settling into a stable level of market share
44
What is step 5 Decline?
Reduced demand or a shrinking target market
45
What is life after decline?
It may be time to:
- reinvent the brand
- pivot to a new market
46
How do you calculate total costs?
Variable costs + fixed costs
47
How do you calculate unit costs?
Variable cost + fixed cost/unit sales
48
How do you calculate contribution margin?
Price - variable cost/price
49
What is cost-based pricing?
Setting prices based on total cost of producing the product, plus a markup
50
What is the percentage of cost method?
Price = unit cost x (1 + % markup)
Price = unit cost/1-% target return
51
How do you calculate target return pricing?
Price = unit cost + target profit/unit sales
Price = unit + %ROI x investment/unit sales
52
What is break-even pricing?
Price = unit cost
53
What is value-based pricing?
Setting prices based on target customers' perceptions of the product's value
54
What is the BEP?
Volume of sales needed to break-even at a given price and given costs
55
How do you calculate the BEP?
Unit sales = fixed cost/price - variable cost
56
What are the types of value-based pricing?
Good-value pricing - offer a price that target customers perceive as 'fair'
Value-added pricing - attaching additional features/services to a product
57
What is competition-based pricing?
Setting prices based on competitors' strategies, costs, prices and market offerings
58
What are the different types of competition-based pricing?
Penetration pricing - setting a low price to undercut competitors and attract a large market share
Market-skimming pricing - setting a high price to get large profits from buyers willing to pay it
Loss leader pricing - setting a price below cost to stimulate interest
59
What is price adjustments?
How you change prices in order to tweak your tactics to better capture value from target customers
60
What is promotional pricing?
Temporarily making a product more affordable in order to increase sales
61
What is segmented pricing?
Selling a product at two or more prices but the differences in prices are not based on difference in costs
ie. forms of the product, location, time, season
62
What is geographical pricing?
Prices are adjusted to accommodate for shipping costs
63
What is dynamic pricing?
Adjusting prices continually to meet the characteristics and needs of individual customers and situations
64
What is a product?
Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
65
What is a service?
An activity, benefit or experience offered for sale; it is intangible and only exists as an interaction between a company and a customer
66
What is product in terms of the 4Ps?
Refers to the set of decisions around creating value for the customer
67
What are the different types of B2C products?
Convenience - routine purchases
Shopping - comparison-based purchases
Specialty - effortful/unique purchases
Unsought - unlikely/risky/undesirable purchases - avoid negative outcomes
68
What are types of convenience products?
Necessities, toiletries, etc.
69
What are types of shopping products?
Clothing, cars, etc.
70
What are types of specialty products?
Luxurious goods
71
What are types of unsought products?
Warranties, guarantees, medicine, coffins, etc.
72
What are different types of B2B products?
Industrial products - bought by individuals and organizations for further processing or for use in conducting a business
- materials, capital items, supplies
Industrial services - bought by individuals and organizations to solve a problem that is outside their core competencies
- consulting, repairs, contract work
73
What is the difference between core and whole products?
Core product is what we call a 'product' so far
Whole product refers to the entire experience that a customer is seeking from their purchase
Customers care about the 'quality', packaging and brand
74
What is quality?
The characteristics of a product or service that impact its ability to satisfy customer needs
75
Features vs. design
Features:
- refer to what the product does to meet needs
- they are how you know the product category
Design:
- refer to how the product meets those needs
- what allows for 1 product with different benefits
76
What is packaging?
The container/wrapper for a product including the way a product/service is presented
77
What does packaging do?
- attract buyers/close a sale
- communicate positioning
- facilitate product delivery
- engage customers
78
What is brand equity?
The effect that knowing a brand name has on customer response to a product or its marketing
79
What are the additional Ps for services?
Process
People
Physical evidence
80
What is servicescapes?
The environment in which the service is delivered and where the firm and customer interact
It impacts:
- purchase decisions
- post-purchase evaluations
- customer satisfaction
81
What is a brand?
The brand is the company itself. An entity with which we form a relationship with the company.
82
What is brand architecture?
A product line consists of closely related products that:
- have similar functions and customer groups
- are sold through similar outlets/fall within price ranges
- carry the same brand name
83
What is the width?
Refers to the number of a company's. product lines
84
What is the length?
The number of items in the line
85
What is the depth?
The number of versions available of each item
86
What is product line filling?
New products/variations that customers expect to see
87
What is a product line stretching?
Introducing a product which customers were not expecting to see
88
What is product line consistency?
How the product lines relate to each other
89
Where do the major consumer brand perception dimensions come from?
This is what brand equity is.
Differentiation, relevance, esteem and personality
90
What is differentitation?
Does the brand stand out?
91
What is the relevance?
How easily does the brand come to the mind?
92
What is esteem?
Is the brand a high status brand?
93
What is the personality?
Is the brand warm or competent?
94
What is the product life-cycle?
Development, introduction, growth, maturity, decline
95
What are the stages in product development?
Product innovation, planning, sanity checks, testing, launch
96
What is step 1.1 Idea generation?
Systematic search for new product ideas:
Internal sources:
R & D
External sources:
Acquisitions
Customers
97
What is step 1.2 Idea screening?
Should be free to come up with crazy suggestions and screening is where they are ruled out
98
What is step 1.3 Concept development?
A product concept is a detailed version of the new product idea stated in meaningful consumer terms
There is a prototype
99
What is the minimum viable product?
A prototype which is fully function without any of the bells and whistles with it
100
What is consumer-centric design?
It is the responsibility of the designer to make the designs and it is not their fault if the consumer does uses the product wrong
"Norman Doors" - 'push' doors instead of pull
101
What are the 5 steps of consumer-centered design?
1. Affordances - what you can do with the product
2. Signifiers - how you know what the product affords
3. Mapping - how you actions lead to the desired outcomes
4. Feedback - how you know the product is working
5. Conceptual models - the metaphors that help you to understanding how the product works
102
What is the step 1.4 Market planning?
Craft your marketing plan:
Situation analysis
Strategy development
Implementation tactics
Financial projections
103
What are steps 1.5/1.6 Sanity checks?
Formally evaluate the value proposition and target market and your ability to create and capture value
104
What is step 1.7 Test marketing?
Put the product out to a small segment of the market to make sure customers are responding to the product the way you want them to
105
What is step 1.8 New product launch?
Introduction of the product
106
What is step 2 New product introduction?
Consider:
- When to launch new product?
- Where to launch?
- Who to target?
107
What is step 3 Growth?
Characterized by the product achieving mainstream demand
Necessary but not sufficient
108
What is step 4 Maturity?
Characterized by settling into a stable level of market share
109
What is step 5 Decline?
Reduced demand or a shrinking target market
110
What is life after decline?
It may be time to:
- reinvent the brand
- pivot to a new market
111
How do you calculate total costs?
Variable costs + fixed costs
112
How do you calculate unit costs?
Variable cost + fixed cost/unit sales
113
How do you calculate contribution margin?
Price - variable cost/price
114
What is cost-based pricing?
Setting prices based on total cost of producing the product, plus a markup
115
What is the percentage of cost method?
Price = unit cost x (1 + % markup)
Price = unit cost/1-% target return
116
How do you calculate target return pricing?
Price = unit cost + target profit/unit sales
Price = unit + %ROI x investment/unit sales
117
What is break-even pricing?
Price = unit cost
118
What is value-based pricing?
Setting prices based on target customers' perceptions of the product's value
119
What is the BEP?
Volume of sales needed to break-even at a given price and given costs
120
How do you calculate the BEP?
Unit sales = fixed cost/price - variable cost
121
What are the types of value-based pricing?
Good-value pricing - offer a price that target customers perceive as 'fair'
Value-added pricing - attaching additional features/services to a product
122
What is competition-based pricing?
Setting prices based on competitors' strategies, costs, prices and market offerings
123
What are the different types of competition-based pricing?
Penetration pricing - setting a low price to undercut competitors and attract a large market share
Market-skimming pricing - setting a high price to get large profits from buyers willing to pay it
Loss leader pricing - setting a price below cost to stimulate interest
124
What is price adjustments?
How you change prices in order to tweak your tactics to better capture value from target customers
125
What is promotional pricing?
Temporarily making a product more affordable in order to increase sales
126
What is segmented pricing?
Selling a product at two or more prices but the differences in prices are not based on difference in costs
ie. forms of the product, location, time, season
127
What is geographical pricing?
Prices are adjusted to accommodate for shipping costs
128
What is dynamic pricing?
Adjusting prices continually to meet the characteristics and needs of individual customers and situations
