Understanding Business: Chapter 14

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

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