Exam 14: Developing and Pricing Goods and Services

New-product commercialization includes promoting the product to distributors and retailers as well as developing strong advertising and sales campaigns.

One way firms can gain a competitive advantage without relying on low prices is by developing close, friendly relationships with their customers.

Mini-Case Gourmet Pets is an innovative competitor in the billion-dollar pet food industry. In fact, two of its products, Kitty Sirloin and McDog T-bone, each claim over a 30% share in their market segments. The company has done detailed research and discovered that, for a growing number of pet owners, the family pet serves as a baby substitute. These owners tend to pamper their pets, and are very discriminating in what they purchase. With this in mind, the company has put a great deal of effort into developing a new dog food: Prime Cuts. The new product is packaged in a resealable, microwaveable container and can be purchased in a variety of flavors (including Western BBQ, Teriyaki, Australian Outback, and Hickory Smoked). Gourmet Pets promotes the product as far superior to "average" dog foods, even though the quality of meat and nutrient content of the food are virtually identical to many other brands. The company faces no competition in this market segment so it plans to charge a high price for the product. -The company currently markets McDog T-bone, Lapdog Lunchtreats, Rover's Potroast, and Puppy Porterhouse in the dog food market. Prime Cuts will be an addition to the company's ___________ in the dog food market.

Donavan spent the day talking with a packaging company in Guam, a lighting specialist in Japan, a touchpad expert in the U.S., a prototype design firm in Malaysia, as well as a shipping firm in China. Each of these firms provided expertise in the development of his company's latest product, a back-lighted eReader. The strategy that Donavan's firm used to develop its latest product is:

After several years as a brand manager for an established product, Pete has taken a job with a microbrewery. He is responsible for managing the marketing mix for a new product introduction. In his new job, Pete will find that while the products may be at different stages of the product life cycle, the marketing strategies will be essentially the same.

SneezeNoMore markets a group of similar products for people suffering from the common cold. The products in this line are sold under the brand name SneezeNoMore. The products differ mainly in the strength of the dosage and in whether they also contain additional medications to help the consumer sleep. As an employee of SneezeNoMore, Jill is responsible for the marketing mix for the company's products. She is also involved in any major decisions concerning the development of new products that will be included in this product line. Jill serves as a(n):

As the Internet has grown in popularity, it is likely that more firms will adopt a high-low pricing strategy.

The strategy of charging prices based on consumer demand rather than cost or a predetermined profit margin represents:

Competition-based pricing is a strategy based on what all the other competitors are doing.

Brand association is the linking of a brand to other favorable images such as a celebrity or geographic location.

A street vendor selling Rolex watches at ridiculously low prices approached Ted. Ted, however, was suspicious that the watches were illegal ________ brands.

Knockoff brands are ________ copies of national brand-name goods.

When a brand becomes commonplace and identified with a category of goods rather than the unique product of a specific manufacturer, the brand may become a:

The uniqueness of convenience goods and services stimulates consumers to make an extra effort to purchase them.

Whole grain breads, bagels, bread sticks, sandwiches, soup, and pastries are products that would be included in the product mix of El Trovodor's Bread Company.

The four stages in the product life cycle are introduction, market, exchange, and disposal.

Small firms often rely on nonprice competition when competing against larger firms.

Brand managers have direct responsibility for all the elements of the marketing mix for a particular brand or product line.

Endorsements by sports or movie celebrities can help create a favorable brand association.

The target costing strategy establishes a selling price that consumers are willing to pay for a product, and then subtracts a desired profit margin to determine a target cost of production.