MGT111 Ch 14

Key Functions of Packaging

1. To attract buyers' attention 2. Protect the goods inside and be tamperproof 3. Be easy to open 4. Describe and give information about the product 5. Explain the product's benefits 6. Provide warranty information and warnings 7. Give an indication of price, value, and uses

Pricing Objectives

1.Achieving a target return on investment or profit 2.Building traffic 3.Achieving greater market share 4.Creating an image 5.Furthering social objectives, both short-run and long-run

Trademark

A brand that has exclusive legal protection for both its brand name and its design

product line

A group of products that are physically similar or intended for a similar market.

Competition-based pricing

A pricing strategy based on what all the other competitors are doing.

Product screening

A process designed to reduce the number of new-product ideas being worked on at any one time.

Total fixed costs

All the expenses that remain the same no matter how many products are made or sold.

Specialty goods and services

Consumer products with unique characteristics and brand identity.

Variable costs

Costs that change according to the level of production.

Demand-Based Pricing (target costing)

Designing a product so that it satisfies customers and meets the profit margins desired by the firm.

total product offer

Everything that consumers evaluate when deciding whether to buy something

Brand awareness

How quickly or easily a given brand name comes to mind when a product category is mentioned.

Knockoff brands

Illegal copies of national brand-name goods

Product analysis

Making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas.

Generic goods

Nonbranded products that usually sell at a sizable discount compared to national or private-label brands

Psychological pricing

Pricing goods and services at price points that make the product appear less expensive than it is

Competition on Attributes Other than Price

Product images, Comfort, Style, Convenience, Durability, Accompanying services

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

Dealer (private-label) brands

Products that don't carry the manufacturer's name but carry a distributor's or retailer's name instead.

Industrial goods

Products used in the production of other products; sometimes called B2B goods

High-low pricing strategy

Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors.

Manufacturers' brands

The brand names of manufacturers that distribute products nationally

Product Mix

The combination of product lines offered by a manufacturer

Brand association

The linking a brand to other favorable images

Break-even analysis

The process used to determine profitability at various levels of sales.

Price leadership

The strategy by which one or more dominant firms set the pricing practices that all competitors in an industry follow

Brand equity

The value of the brand name and associated symbols.

Shopping goods and services

Those products that the consumer buys only after comparing value, quality, price, and style from a variety of sellers.

brand manager

a manager who has direct responsibility for one brand or one product line

brand

a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products

When consumers reach ______ ______, they will not accept substitute brands

brand insistence

Consumers reach a point of _____ ______when they prefer one brand over another.

brand preference

Bundling

grouping two or more products together and pricing them as a unit

Distributed Product Development

handing off various parts of your innovation process- often to companies in other countries

Cost-Based Pricing

measures cost of producing a product including materials, labor, and overhead.

Crowdsourcing

platforms allow the public to give their opinions of potential products.

break-even point

revenues equals cost.

Everyday low pricing (EDLP)

setting prices lower than competitors and then not having any special sales

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

Concept testing

takes a product idea to consumers to test reactions

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

Commercialization

Promoting a product to distributors and retailers to get wide distribution, and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and consumers.

Brand loyalty

The degree to which customers are satisfied, like the brand, and are committed to further purchases.