Understanding Business: Chapter 14 – Flashcards
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value
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Good quality at a fair price. When customers calculate the value of a product, they look a the benefits and then subtract the cost to see if the benefits exceed the costs.
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total product offer
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everything that consumers evaluate when deciding whether to buy something; also called a value package.
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product line
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a group of products that are physically similar or are intended for a similar market
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product mix
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the combination of product lines offered by a manufacturer
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product differentiation
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the creation of real or perceived product differences
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convenience goods and services
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products that the consumer wants to purchase frequently and with a minimum of effort
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shopping goods and services
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those producs that the consumer bys only after comparing value, quality, price, and style from a variety of sellers
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specialty goods and services
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consumer products with unique characteristics and brand identity. Because these producs are perceived as having no reasonable substitute, the consumer puts forth a special effort to purchase them
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unsought goods and services
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products that consumers are unaware of, haven't necessarily thought of buying, or find that they need to solve an unexpected problem
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industrial goods
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products used in the production of other products. sometimes called business goods or B2B goods.
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bundling
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grouping two or more products together and pricing them as a unit
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brand
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a name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors
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trademark
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a brand that has exclusive legal protection for both its brand name and its design
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manufacturers' brand names
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the brand names of manufacturers that distribute products nationally.
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dealer (private label) brands
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products that don't carry the manufacturer's name but carry a distributor or retailer's name instead.
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generic goods
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nonbranded products that usually sell at a sizable discount compared to national or private-label brands
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knockoff brands
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illegal copies of national brand-name goods
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brand equity
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the value of the brand name and associated symbols
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brand loyalty
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the degree to which customers are satisfied, like the brand, and are committed to further purchases
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brand awareness
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how quickly or easily a given brand name comes to mind when a product category is mentioned
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brand association
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the linking of a brand to other favorable images
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brand manager
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a manager who has direct responsibility for one brand or one product line; called a product manager in some firms
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product screening
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a process designed to reduce the number of new-product ideas being worked on at any one time
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product analysis
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making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas
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concept testing
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taking a product idea to consumers to test their reactions
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commercialization
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promoting a product to distributors and retailers to get wide distribution, and developing strong advertising and sales campaigns to generate and maintain interest int eh product among distributors and consumers
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product life cycle
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a theoretical model of what happens to sales and profits for a product class over time; the four stages of the cycle are introduction, growth, maturity, and decline
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target costing
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designing a product so that it satisfies customers and meets the profit margins desired by the firm
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competition-based pricing
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a pricing strategy based on what all the other competitors are doing. the price can be set at, above, or below competitors' prices
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price leadership
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the strategy by which one or more dominant firms set the pricing practices that all competitors in an industry follow
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break-even analysis
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the process used to determine profitability at various levels of sales
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total fixed costs
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all the expenses that remain the same no matter how many products are made or sold
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variable costs
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costs that change according to the level of production
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skimming price strategy
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strategy in which a new product is priced high to make optimum profit while there's little competition
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penetration strategy
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strategy in which a product is priced low to attract many customers and discourage competition
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everyday low pricing (EDLP)
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setting prices lower than competitors and then not having any special sales
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high-low pricing strategy
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setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors'.
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psychological pricing
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pricing goods and services at price points that make hte product appear less expensive than it is.
