Product and price Flashcards
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
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
What is product in terms of the 4Ps?
Refers to the set of decisions around creating value for the customer
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
What are types of convenience products?
Necessities, toiletries, etc.
What are types of shopping products?
Clothing, cars, etc.
What are types of specialty products?
Luxurious goods
What are types of unsought products?
Warranties, guarantees, medicine, coffins, etc.
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
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
What is quality?
The characteristics of a product or service that impact its ability to satisfy customer needs
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
What is packaging?
The container/wrapper for a product including the way a product/service is presented
What does packaging do?
- attract buyers/close a sale
- communicate positioning
- facilitate product delivery
- engage customers
What is brand equity?
The effect that knowing a brand name has on customer response to a product or its marketing
What are the additional Ps for services?
Process
People
Physical evidence
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
What is a brand?
The brand is the company itself. An entity with which we form a relationship with the company.
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
What is the width?
Refers to the number of a company’s. product lines
What is the length?
The number of items in the line
What is the depth?
The number of versions available of each item
What is product line filling?
New products/variations that customers expect to see
What is a product line stretching?
Introducing a product which customers were not expecting to see
What is product line consistency?
How the product lines relate to each other
Where do the major consumer brand perception dimensions come from?
This is what brand equity is.
Differentiation, relevance, esteem and personality
What is differentitation?
Does the brand stand out?
What is the relevance?
How easily does the brand come to the mind?
What is esteem?
Is the brand a high status brand?
What is the personality?
Is the brand warm or competent?
What is the product life-cycle?
Development, introduction, growth, maturity, decline
What are the stages in product development?
Product innovation, planning, sanity checks, testing, launch
What is step 1.1 Idea generation?
Systematic search for new product ideas:
Internal sources:
R & D
External sources:
Acquisitions
Customers
What is step 1.2 Idea screening?
Should be free to come up with crazy suggestions and screening is where they are ruled out
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
What is the minimum viable product?
A prototype which is fully function without any of the bells and whistles with it
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
What are the 5 steps of consumer-centered design?
- Affordances - what you can do with the product
- Signifiers - how you know what the product affords
- Mapping - how you actions lead to the desired outcomes
- Feedback - how you know the product is working
- Conceptual models - the metaphors that help you to understanding how the product works
What is the step 1.4 Market planning?
Craft your marketing plan:
Situation analysis
Strategy development
Implementation tactics
Financial projections
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
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
What is step 1.8 New product launch?
Introduction of the product
What is step 2 New product introduction?
Consider:
- When to launch new product?
- Where to launch?
- Who to target?
What is step 3 Growth?
Characterized by the product achieving mainstream demand
Necessary but not sufficient
What is step 4 Maturity?
Characterized by settling into a stable level of market share
What is step 5 Decline?
Reduced demand or a shrinking target market
What is life after decline?
It may be time to:
- reinvent the brand
- pivot to a new market
How do you calculate total costs?
Variable costs + fixed costs
How do you calculate unit costs?
Variable cost + fixed cost/unit sales
How do you calculate contribution margin?
Price - variable cost/price
What is cost-based pricing?
Setting prices based on total cost of producing the product, plus a markup
What is the percentage of cost method?
Price = unit cost x (1 + % markup)
Price = unit cost/1-% target return
