The marketing mix-product and price Flashcards
Definitions
Product
Goods or services that are the end result of the production process and are sold on the market to satisfy customer needs.
Marketing mix
The four key decisions on product, price, promotion and place that must be taken to enable the effective marketing of a product.
Goods
Products which have a physical existence, such as washing machines and chocolate bars.
Services
Products which have no physical existence, but satisfy consumer needs in other ways, such as hairdressing, car repairs, childminding and banking.
Brand
An identifying symbol, name, image or trademark that distinguishes a product from its competitors.
Intangible attributes
The subjective opinions of customers about a product, which cannot be measured or compared easily.
Tangible attributes
The measurable features of a product, which can be easily compared with other products.
Unique selling point (USP)
The special feature of a product that makes it different from competitors’ products.
Product differentiation
The unique qualities of a product that lead to a difference between the product and competitors’ products.
Product positioning
Consumers’ view of a product or service as compared to its competitors.
Product portfolio analysis
Analysing the range of existing products of a business to help allocate resources effectively between them.
Product life cycle
The pattern of sales for a product from launch to withdrawal from the market.
Consumer durable
A manufactured product that can be re-used and is expected to have a reasonably long life, such as a car or washing machine.
Extension strategy
A marketing plan to extend the maturity stage of the product before a completely new one is launched.
Boston Matrix
A method of analysing the product portfolio of a business in terms of market share and market growth.
Mark-up pricing
Adding a fixed mark-up profit to the unit cost of buying in a product.
Cost-plus pricing
Setting a price by calculating a total unit cost for the product and then adding a fixed profit mark-up.
Contribution-cost pricing
Setting prices based on the variable costs of making a product, in order to make a contribution towards fixed costs and profit.
Competitive pricing
Making pricing decisions based on the price set by competitors.
Price discrimination
Changing different groups of consumers different prices for the same good or service.
Dynamic pricing
Offering products at a price that changes according to the level of demand and the customer’s ability to pay.
Penetration pricing
Setting a relatively low price to achieve a high volume of sales.
Market skimming
Setting a high price for a new product when a fir has a unique or highly differentiated product with low price elasticity of demand
Psychological pricing
Setting a price at a level which meets consumers’ views about a product’s perceived value.
