Ninth Edition. Global Edition

Chapter 13

Produc and Pricing Strategies

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

13.1 Identify the main types of consume and organizational products and describe the four stages in the life cycle of a product.

13.2 Describe six stages in the product development process.

13.3 Define brand .and explain the concepts of brand equit and brand loyalty.

13.4 Identify four ways of expanding a product line and discuss two risks that product.line extensions pose.

13.5 List the factors that influence pricing decisions and explain break.even analysis.

13.6 Compare the three foundational pricing methods and list six situational pricing methods.

13.7 Describe how companies are using virtua and augmented reality to create new product and new customer experiences.

• Convenience products

  • Everyday good and services that people buy frequently. usually without much conscious planning

• Shopping products

  • Fairly important good and services that people buy less frequently with more plannin and comparison

• Specialty products

  • Particular brands that the buyer especially want and will seek out. regardless of location or price

• Expense items
  • Inexpensive goods generally used within a year of purchase
• Capital items
  • More expensive organizational products with a longer useful life. ranging from offic and plant equipment to entire factories

Raw materials

Components

Supplies

Installations

Equipment

Business services

• Product life cycle
  • Four stages through which a product progresses: introduction. growth. maturity and decline

Source: Adapted from Philip Kotle and Gary Armstrong. Principles of Marketing . 17th ed. .New York: Pearson. 2018.. 265.

• Product development process
  • A formal process of generating. selecting. developing and commercializing product ideas

• Prototypes

  • Pre.production samples of products used for testin and evaluation

• Test marketing

  • The stage of product development in which a product is sold on a limited basis to gauge its market appeal

• Commercialization

  • Large.scale productio and distribution of a product

• Brand

  • A name. term. sign. symbol. design. or combination of those used to identify the products of a fir and to differentiate them from competing products

• Brand equity

  • The value that a company has built up in a brand

• Brand loyalty

  • The degree to which customers continue to purchase a specific brand

• Brand names

  • The portion of brands that can be expressed orally. including letters. words. or numbers

• Brand marks

  • The portion of brands that cannot be expressed verbally

• Logo

  • A graphica and/or textual representation of a brand

• Trademarks

  • Brands that have been given legal protection so that their owners have exclusive rights to their use

• National brands

  • Brands owned by manufacturer and distributed nationally

• Private brands

  • Brands that carry the label of a retailer or a wholesaler rather than a manufacturer

• Co.branding

  • A partnership between two or more companies to closely link their brand names together for a single product

• Brand licensing

  • Agreement in which one company pays to use another company’s brand on its products.

• Brand managers

  • Managers who develo and implement the marketing strategie and programs for specific products or brands

• Product line

  • A series of related products offered by a firm

• Product mix

  • The complete portfolio of products that a company offers for sale

• Family branding

  • Using a brand name on a variety of related products

• Price elasticity
  • A measure of the sensitivity of demand to changes in price

• Fixed costs
  • Business costs that remain constant regardless of the number of units produced
• Variable costs
  • Business costs that increase with the number of units produced

• Break.even analysis

  • A method of calculating the minimum volume of sales needed at a given price to cover all costs

• Break.even point

  • Sales volume at a given price that will cover all of a company’s costs

• Cost.based pricing

  • A method of setting prices based on productio and marketing costs. rather than conditions in the marketplace

• Value.based pricing

  • A method of setting prices based on customer perceptions of value

• Competition.based pricing

  • A method of setting prices based on what suppliers of similar products are charging

• Algorithmic pricing

  • A variety of computational methods used to set price. either in more nuanced ways than simple cost. or competition.based pricing or in dynamic ways that respond in real time to fluctuations in deman and other market conditions

• Skim pricing

  • Charging a high price for a new product during the introductory stag and lowering the price later

• Penetration pricing

  • Introducing a new product at a low price in hopes of building sales volume quickly

• Loss.leader pricing

  • Selling one product at a loss as a way to entice customers to consider other products

• Freemium pricing

  • A hybrid pricing strategy .free.premium. of offering some products for free while charging for others. or offering a product for free to some customers while charging others for it

• Subscription pricing

  • A pricing model in which customers are charged a recurring fee for the right to continuing using a product

• Discounts
  • Temporary price reductions to stimulate sales or lower prices to encourage certain behaviors such as paying with cash
• Bundling
  • Offering several products for a single price that is presumably lower than the total of the products’individual prices

• Virtual reality .V R.
  • Computer.generated simulations that create the sensation of being in a real environment.
• Augmented reality .A R.
  • Systems that superimpose visual or textual information on live images of real scenes.

Identify the main types of consume and organizational products and describe the four stages in the life cycle of a product.

Describe six stages in the product development process.

Define brand and explain the concepts of brand equit and brand loyalty.

Identify four ways of expanding a product line and discuss two risks that product.line extensions pose.

List the factors that influence pricing decisions and explain break.even analysis.

Compare the three foundational pricing methods and list six situational pricing methods.

Describe how companies are using virtua and augmented reality to create new product and new customer experiences.