Chapter 14
Industrial goods
(B2B goods): products used in production of other products
Variable Costs
A cost that changes in proportion to a change in a company's production activity or business
Product mix
Combination of all product lines offered by manufacturer
Bundling
Combine g/s for a single price
Total fixed costs
Cost of production tha does not change with quantity produced
Product differentiation
Creation of real of percieved product differences
Skimming price strategy
Marketer initially sets high price for a product and then lowers the price over time
Target costing
Product costing method in which final product cost is determined after market analysis
Convenience goods and services
Products and consumer wants to purchase frequently and with minimum effort
Value
Want-satisfying ability
Competition based pricing strategy
Benchmark of another product is used to set the price of a product rather than considering the costs of the seller's own production
Dealer (private label) brands
Brand name placed on products that a large manufacturer has created for a retailer
Brand Equity
Commercial value derived from name recognition a brand earns over time
Shopping goods and services
Consumer goods that require some evaluation and are compared for featrues, quality and price before purchase
Brand Loyalty
Degree to which customers are satisfied, like the brand, and are committed to further purchases
Brand Association
Degree to which the consumer is able to connect to a product category or brand
Brand Manager
Direct responsibility for one brand or product line, and managers all the elements of marketing mix: product, price, place promotion
Total product offer
Everything consumers evaluate when deciding whether to buy something
Brand Awareness
Extent to which a brand is recognized and recalled by customers
Product line
Group of products physically similar or intended for similar market
Knock off brands
Illegal copies of national brand-name goods
Penetration pricing strategy
Low prices attract more buyers and discourage other companies from making sets because profits are slim
Product analysis
Make cost estimates and sales forecasts to get feel for profitability of new product ideas
Break even analysis
Mathematical relationship between costs and sales revenue
Product life cycle
Model depicts what happens to sales and profits for a product or product category over time
Brand
Name, symbol or design that identifies the g/s of one seller or group of sellers and distinguishes them from the g/s of competitors
Generic goods
Nonbrand products that usually sell at sizable discount compared to national or private label brands
Psychological pricing
Price g/s at price points that make product appear less expensive than it is
Concept testing
Process in which a new product is analyzed using computers or full-sized models
Unsought goods and services
Products consumers unaware of, haven't thought of buying, or suddenly find they need to solve an unexpected problem
Specialty goods and services
Products for which customers have strong preference and put forth extra effort and search extensively to purchase
Commercialization
Promote product to distributors and retailers to get wide distribution, develop strong advertising and sales campaigns to generate and maintain interest in product among distributors and consumers
Product screening
Reduce number of new product ideas a firm is working on so it can focus on most promising
High-low pricing strategy
Regular prices higher than stores using EDLP but lower with special sales
Everyday low price (EDLP)
Set prices lower than competitors and don't have special sales
Price leadership
Strategy where firms set pricing practices all competitors in an industry follow
Trademark
Symbol or words legally established to identify and distinguish a company or product