unit 4 marketing test: product and price

How is markup measured?

As a percentage of selling price or a percentage of cost

Examples of trade name and brand name

Ford motor company is an example of a trade name and Escape is a brand name owned by that company

How can a company use tangible cues to promote the service and help customers better understand it's service?

Prudential Insurance uses "the rock" symbol to communicate stability and security to customers.

What's price competition?

Something that allows a marketer to set prices based on demand for the product or in response to changes in the firm's finances, competitors can do this as well.

why are line extensions more common than new products?

They are less expensive and lower-risk.

what's an example of accessory equipment needed for business?

a distributor of plumbing supplies purchases a desktop computer to aid in inventory control.

what offers innovative benefits to customers?

a genuinely new product, like the iPhone once was

what warrants premium pricing?

a product that has more features than those of it's competition, or that is perceived to be higher quality

example of component part

a set of Bowers & Wilkins car speakers sold to Volvo for use in the production of a XC90 SUV

what's a goal during the growth stage of the product life cycle

achieving greater penetration of the market

Pricing Decisions

based on determining whether the demand for a product is price elastic or price inelastic

private distributor brands

owned by retailers or wholesalers and do not identify the manufacturer of the product ( like Costco's Kirkland )

screening stage in developing new products

process of choosing the most promising ideas for further review, these ideas are analyzed to determine if they match the organization's mission, objective, and resources

in product modification, what three conditions must be met to improve a firm's product mix:

products must be modifiable, customers must be able to perceive that a modification has been made, and a modification should change customers' desires to provided greater satisfaction

Process materials

products used directly in production of the final product but that are not easily identifiable

2 difficulties that often arise during the introduction stage

sellers may lack the resources to launch the new product successfully snd the initial product price may have to be high to recoup costs.

line extensions

so called new products that are launched each year

concept testing

stage of new-product development process where customers are first exposed to the new product idea

brand insistence

the degree of brand loyalty in which a customer strongly prefers a specific brand and will accept no substitute

test marketing

the limited introduction of a product in areas chosen to represent the intended market

Breakeven point

the money a company brings in from selling products equals the amount spent producing the products

what does the use of market share as a pricing objective not oversimplify?

the value of price in contributing to profits

why would a co-branded product from Sony and Heinz fail?

their products are not complementary

when do companies emphasize the product support service that they offer?

to differentiate their products especially when consumers perceive all products in a market to have especially the same quality, design, and features

what was the goal when Old Spice came out with the "Smell like a Man" advertising campaign?

to reposition the brand from one that appealed to older men to a new, younger target market.

In a target market what's the importance of price dependent on?

type of product

what are the profits like during the introduction stage of a successful product?

usually negative and increasing

example of marketers using co-branding

when a product tries to capitalize on the brand equity of two separate brands.

when is a marketer in a better position to establish prices?

when it knows the prices changed for competing brands

when does competition-based pricing become more important?

when products in an industry are relatively homogeneous and price is a key purchase consideration