Chapter 13 - Developing and Pricing Products Flashcards
(12 cards)
Consumer Product Classifications
-Convenience Product
-Shopping Product
-Specialty Product
-Unsought Product
Business Product Classifications
-Raw Materials
-Component Part
-Major Equipment
-Accessory Equipment
-Supply
-Business Service
Benefits of Innovation
-Improving function or quality
-Lowering cost of production
-Offering customers new experiences
Phases of Product Development
- Idea Generation
- Product Analysis
- Product Development & Training
- Commercialization
Product Life Cycle
- Introduction Stage
- Growth Stage
- Maturity Stage
- Decline Stage
Product Line
A group of similar products that are related to each other in the way they work with their target.
Benefits:
-Clarity
-Management
-Simplify Decisions
Primary Functions of Packaging
- Protect Product
- Attract Buyer Attention
- Provide Product Information
- Improve Design or Function
- Better Serve Customer Needs
Factors Affecting Product Prices
-Economic Conditions
-The Industry
-Stage of PLC
Three Key Considerations for Determining Price
- Your Cost
- Maximum price customers are willing to pay
- What competitors charge
Break-Even Point
- Total revenue = Total cost
[Fixed Costs / Unit Contribution] OR [(Selling Price per Unit - Cost of
Production / Unit Contribution) ]
-Fixed Cost
-Variable Cost
-Total cost
-Contribution Margin
Five Common Pricing Objectives
- Building Loyal User Base
- Increase Market Share
- Communicate Brand Value
- Maintain Status Quo
- Survival or Liquidation
Four Categories of Pricing Strategies
- New-Product Pricing
- Psychological Pricing
- Product-Line Pricing
- Promotional Pricing
