Business Dynamics - Chapter 14
Generic goods
Nonbranded products that sell at a discount compared to national or private-label brands
Key functions of packaging
Attract buyer's attention, protect goods, easy to open, describe contents, explain benefits, provide warranty information and warnings, indicate price, value, and uses
Manufacturers' brands
Brand names of manufacturers that distribute products nationally
Trademark
Brand with exclusive legal protection for name and design
Product mix
Combination of product lines offered by a manufacturer
Variable costs
Costs that change according to production level
Product differentiation
Creation of real or perceived product differences
Total product offer
Everything consumers evaluate when deciding to buy something
Total fixed costs
Expenses that remain the same regardless of production or sales
Introduction stage
First stage of product life cycle
Decline stage
Fourth stage of product life cycle
Product line
Group of physically similar or market-intended products
Product life cycle
Model of sales and profits for a product class over time
Brands
Name, symbol, or design that identifies goods or services
Knockoff brands
Illegal copies of national brand-name goods
Cost-based pricing
Pricing based on cost of producing a product
Demand-based pricing
Pricing based on satisfying customers and desired profit margins
Psychological pricing
Pricing goods and services to appear less expensive than they are
Skimming price strategy
Pricing new product high for optimum profit with little competition
Penetration strategy
Pricing product low to attract customers and discourage competition
Competition-based pricing
Pricing strategy based on competitors' pricing
Break-even analysis
Process to determine profitability at various sales levels
Dealer (private-label) brands
Products that carry distributor's or retailer's name instead of manufacturer's
Break-even point
Sales level where revenues equal costs
Growth stage
Second stage of product life cycle
High-low pricing strategy
Setting higher prices than EDLP stores but having special sales
Everyday low pricing (EDLP)
Setting prices lower than competitors without special sales
Pricing objectives
Target return on investment or profit, building traffic, achieving market share, creating an image, furthering social objectives
Maturity stage
Third stage of product life cycle
Packaging
Use of packaging to change and improve a basic product