Business Copyright 2005 Prentice Hall Inc 1 Chapter
Business Copyright 2005 Prentice- Hall, Inc. 1
Chapter 11 Developing And Pricing Products 11 -2
Business Chapter Outline üWhat Is A Product? üDeveloping New Products üIdentifying Products üDetermining Prices üPricing Strategies & Tactics Copyright 2005 Prentice- Hall, Inc. 3
Business Product? • Value Package y t an rr a W • Features – Tangible – Intangible Copyright 2005 Prentice- Hall, Inc. 4
Business Goods/Services. Classification • Consumer • Industrial Copyright 2005 Prentice- Hall, Inc. 5
Business Consumer Products • Convenience- Rapidly Consumed • Shopping – Moderately Priced – Infrequent Purchase • Specialty – Expensive – Rarely Purchased Copyright 2005 Prentice- Hall, Inc. 6
Business Online Shopping Thanksgiving - Christmas In $ Billon Source: Veri. Sign “Veri. Sign Reports $8. 8 Billion in Onlines Purchases During the 2004 Holiday Shopping Season”, http: //www. verisign. com/verisigninc/news-and-events/news-archive/us-news-2004/index. html Copyright 2005 Prentice- Hall, Inc. 7
Business Average Online Transaction Size (Thanksgiving – Christmas) Source: Veri. Sign “Veri. Sign Reports $8. 8 Billion in Onlines Purchases During the 2004 Holiday Shopping Season”, http: //www. verisign. com/verisigninc/news-and-events/news-archive/us-news-2004/index. html Copyright 2005 Prentice- Hall, Inc. 8
Business Industrial Products • Expense Items – Regularly Purchased – Consumed Rapidly • Capital Items – Expensive – Long-lasting – Infrequently Purchased Copyright 2005 Prentice- Hall, Inc. 9
Business Product Mix • Product Line – Similar Products – Similar Buyers – Similar Use • Single • Multiple/Diversified Copyright 2005 Prentice- Hall, Inc. 10
Business Product Mix. Minute Maid Copyright 2005 Prentice- Hall, Inc. 11
Business New Product Development • Product Mortality- Failure Or Obsolescence • Speed To Market- Market Changes Copyright 2005 Prentice- Hall, Inc. 12
Business New Product Development Process Product Ideas Commercialization Testing & Marketing Screening Prototype Concept Testing Business Analysis Copyright 2005 Prentice- Hall, Inc. 13
Business Services Process Variations • Service Package- Tangible & Intangible Features • Service Process Design – Process Selection – Worker Requirements – Facility Requirements Copyright 2005 Prentice- Hall, Inc. 14
Business Product Life Cycle Copyright 2005 Prentice- Hall, Inc. 15
Business Stages Of Product Life Cycle • • Introduction- New Product Growth – Consumers Attracted – Sales Climb • Maturity- Sales Level-Off • Decline – Other Competing New Products Introduced – Sales & Profits Decline Copyright 2005 Prentice- Hall, Inc. 16
Business Alternatives To New Products • Extension • Adaptation • Reintroduction Copyright 2005 Prentice- Hall, Inc. 17
Business Identifying Products • Branding • Packaging • Labeling Copyright 2005 Prentice- Hall, Inc. 18
Business Product Branding • Adding Value – Brand Equity – Brand Awareness • • E-Business Types Of Brand Names – National – Licensed – Private Copyright 2005 Prentice- Hall, Inc. 19
Business World’s 10 Most Valuable Brands Copyright 2005 Prentice- Hall, Inc. 20
Business Pricing Objectives • Profit-Maximizing • E-Business • Market-Share Copyright 2005 Prentice- Hall, Inc. 21
Business Cost-Oriented Pricing • Components – Markup $ – Markup % – Sales Price Copyright 2005 Prentice- Hall, Inc. 22
Business Breakeven Analysis Components • Variable Cost • Fixed Cost • Breakeven Point Copyright 2005 Prentice- Hall, Inc. 23
Business Breakeven Analysis Copyright 2005 Prentice- Hall, Inc. 24
Business Pricing Existing Products • Relative To Current Market Prices For Similar Products • Current Market – Above – Below – At/Near Copyright 2005 Prentice- Hall, Inc. 25
Business New Product Pricing • Price Skimming • Market Penetration Copyright 2005 Prentice- Hall, Inc. 26
Business E-Business Pricing • Fixed- Most Common • Dynamic- Available Information Forces Constant Price Adjustment Copyright 2005 Prentice- Hall, Inc. 27
Business Pricing Tactics • Price Lining • Psychological. Odd/Even • Discounting Copyright 2005 Prentice- Hall, Inc. 28
Business International Pricing • Determine What Market Will Bear • Post-Purchase- Encourage Trade Up As Personal Economics Allow To • Dumping Copyright 2005 Prentice- Hall, Inc. 29
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