CH 9-10 Flashcards
(24 cards)
an idea for a possible product that the company can see itself offering to the market
product idea
a detailed version of the idea stated in meaningful consumer terms
product concept
the way consumers perceive an actual or potential product
product image
testing new product concepts with groups of target consumers.
Concept testing
review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company’s objectives.
Business analysis
introducing the new product into the market
commercialization
finding new ways to solve customer problems and create more customer-satisfying experiences
Customer-centered new product development
the course that a product’s sales and profits take over its lifetime
product life cycle (PLC)
PLC STANDS FOR
product life cycle (PLC)
5 PLC STAGES
- Product development 2. Introduction 3. Growth 4. Maturity 5. Decline
The company finds and develops a new product idea. During product development, sales are zero, and the company’s investment costs mount
Product development:
A period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction.
Introduction:
A period of rapid market acceptance and increasing profits.
Growth:
A period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.
Maturity:
The period when sales fall off and profits drop.
Decline:
COST BASED PRICING CHART
VALUE BASED PRICING CHART
involves charging higher prices
on an everyday basis but running frequent
promotions to lower prices temporarily on
selected items
High-low pricing
attaches
features and services to differentiate the
companies offers and thus their higher prices
Value-added pricing
is
setting prices
based on
competitors’
strategies,
costs, prices,
and market
offerings
Competition based
pricing
drop in the average cost with accumulated production experience
experience curve / learning curve
Adding a standard markup to the cost of the product.
cost-plus pricing (or markup pricing)
Setting price to break even on the costs of making and marketing a product, or setting price to make a target return.
break-even pricing (or a variation called target return pricing).
break-even volume FORMULA
