| A | B |
|---|
| Product | good, service, or idea that is marketed to fill consumers’ needs and wants |
| Product Differentiation | creation of a product feature or product image that differs enough from existing products to attract customers |
| Product Features | tangible and intangible qualities that a company builds into its products, Features should have benefits to the consumer |
| Product Life Cycle (PLC) | introduction, growth, maturity, decline |
| Pricing | process of determining what a company will receive in exchange for its products |
| Pricing Objectives | the goals that sellers hope to achieve in pricing products for sale |
| Examples of Pricing Objectives | Profit maximizing, Market penetration/market share |
| Price Skimming | setting an initially high price to cover new product costs and generate a profit |
| Penetration Pricing | setting an initially low price to establish a new product in the market |
| Psychological Pricing | pricing tactic that takes advantage of the fact that consumers do not always respond rationally to stated prices |
| Price Lining | setting a limited number of prices for certain categories of products |
| Odd-Even Pricing | psychological pricing tactic based on the premise that customers prefer prices not stated in even dollar amounts |
| Cost-Oriented Pricing | pricing that considers the firm’s desire to make a profit and its need to cover production costs |
| Markup | amount added to an item’s purchase cost to sell it at a profit |
| Breakeven Analysis | for a particular selling price, assessment of the seller’s costs versus revenues at various sales volumes |
| Fixed Cost | cost that is incurred regardless of the quantity of a product produced and sold |
| Variable Cost | cost that changes with the quantity of a product produced and sold |
| Breakeven Point | sales volume at which the seller’s total revenue from sales equals total costs (variable and fixed) with neither profit nor loss |
| Illusion of choice | Consumers love the middle choice! |
| Discount | price reduction offered as an incentive to purchase |
