Developing and Pricing Products Leonardo Matarrese
Upcoming SlideShare
Loading in...5

Like this? Share it with your network


Developing and Pricing Products Leonardo Matarrese

Uploaded on

Developing and Pricing Products - Leonardo Matarrese

Developing and Pricing Products - Leonardo Matarrese

More in: Business , Design
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads


Total Views
On Slideshare
From Embeds
Number of Embeds



Embeds 3 3

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

    No notes for slide


  • 1. CHAPTER 12 Developing and Pricing Products Leonardo Matarrese @MyPlick
  • 2. Outline
    • What Is a Product?
    • Developing New Products
    • Identifying Products
    • Determining Prices
    • Pricing Strategies and Tactics
    Leonardo Matarrese @MyPlick
  • 3. What Is a Product?
    • Ideas, Goods, or Services
    • Customers buy products because they like what the products can do for them, either physically or emotionally--Utility
    • A product must include the right features and offer the right benefits to succeed
    • Feature 
      • Tangible quality that a company builds into a product
    What are some feature the company’s build in? Leonardo Matarrese @MyPlick
  • 4. Classifying Goods & Services
    • Convenience Good/Service  
      • Inexpensive product purchased and consumed rapidly and regularly
    • Shopping Good/Service 
      • Moderately expensive, infrequently purchased product
    • Specialty Good/Service 
      • Expensive, rarely purchased product
    CONSUMER PRODUCTS Leonardo Matarrese @MyPlick
  • 5. Classifying Goods & Services
    • Expense Item 
      • Industrial product purchased and consumed rapidly and regularly for daily operations
    • Capital Item 
      • Expensive, long-lasting, infrequently purchased industrial product such as a building
    INDUSTRIAL PRODUCTS Leonardo Matarrese @MyPlick
  • 6. The Product Mix
    • Product Mix 
      • Group of products that a firm makes available for sale
    • Product Line 
      • Group of similar products intended for a similar group of buyers who will use them in similar ways
    Leonardo Matarrese @MyPlick
  • 7. Developing New Products
    • The New Product Development Process
    • Product Mortality Rates
      • Strategy of introducing new products to respond quickly to customer or market changes
    Leonardo Matarrese @MyPlick Speed to Market
  • 8. The Seven-Step Development Process Product Ideas Screening Concept Testing Business Analysis Prototype Development Testing & Test Marketing       Commercialization  Leonardo Matarrese @MyPlick
  • 9.
    • Variations for Services
    • Service Ideas
      • Defining the Service Package — identification of the tangible and intangible features that characterize the service
    • Service Process Design
      • Services require a three-part service process design instead of prototype development
    The Seven-Step Development Process Leonardo Matarrese @MyPlick
  • 10. The Product Life Cycle (PLC)
    • Series of stages in a product’s profit-producing life
    Introduction Growth Maturity Decline Leonardo Matarrese @MyPlick
  • 11. Life Cycle Stages # - Leonardo Matarrese @MyPlick
  • 12. Life Cycle Stages # - Leonardo Matarrese @MyPlick
  • 13. Adjusting Marketing Strategy During the Life Cycle
    • Extending Product Life: An Alternative to New Products
    • Foreign Markets Offer Three Approaches to Longer Life Cycles
    • Product Extension
      • Existing product is marketed globally, instead of just domestically
    • Product Adaptation  
      • Product modified to have greater appeal in foreign markets
    • Reintroduction 
      • Process of reviving for new markets products that are obsolete in older ones
    Leonardo Matarrese @MyPlick
  • 14. Identifying Products
    • Branding: process of using symbols to communicate the qualities of a product made by a particular producer
    • Types of Brand Names
    • National Brand: brand-name product produced by, widely distributed by, and carrying the name of a manufacturer
    • Licensed Brand: brand-name product for whose name the seller has purchased the right from an organization or individual
    • Private Brand (or Private Label ): brand-name product that a wholesaler or retailer has commissioned from a manufacturer
    Leonardo Matarrese @MyPlick
  • 15. Packaging Products
    • Packaging 
      • Physical container in which a product is sold, advertised, or protected
    Leonardo Matarrese @MyPlick
  • 16. Packaging Products
    • Labeling
      • Can help market the product
    • Nonaerosol
    • Bio-Degradable
    • Recyclable
    • Ozone Friendly
    • Fat Free
    • Salt Free
    • Sugar Free
    • 30% More Free!
    Contents Under Pressure Do Not Puncture
      • Address issues of consumer safety
    Flammable Do Not Use Near Open Flame Child Proof Cap Leonardo Matarrese @MyPlick
  • 17. Labeling Laws
    • Food, Drug and Cosmetic Act of 1938
      • Empowers the Food and Drug Administration to check the accuracy of product ingredients as reported on labels
    • Fair Packaging and Labeling Act of 1966
      • Requires labels to include the product name, the name and address of the manufacturer or distributor, and the net quantity of product contained in the package
    • Child Safety Protection Act 1995
      • Requires labels to identify toys that are choking hazards
    Not For Children Under Three Years Old Leonardo Matarrese @MyPlick
  • 18. Determining Prices
    • Pricing 
      • Process of determining what a company will receive in exchange for its products
    • Pricing Objectives 
      • Goals that producers hope to attain in pricing products for sale
    • Market Share 
      • As a percentage, total of market sales for a specific company or product
    Leonardo Matarrese @MyPlick
  • 19. Price-Setting Tools
    • Cost-Oriented Pricing
      • Markup: Amount added to an item’s cost to sell it at a profit
    • Breakeven Analysis: Cost-Volume-Profit Relationships
      • Variable Cost: Cost that changes with the quantity of a product produced or sold
      • Fixed Cost: Cost unaffected by the quantity of a product produced
      • Breakeven Analysis: Assessment of the quantity of a product that must be sold before the seller makes a profit
    Leonardo Matarrese @MyPlick
  • 20. Markup
    • Markup is usually stated as a percentage of selling price.
    # - Leonardo Matarrese @MyPlick
  • 21. Breakeven Point
    • Quantity of a product that must be sold before the seller covers variable and fixed costs and makes a profit
    # - Leonardo Matarrese @MyPlick
  • 22. Breakeven Analysis # - Leonardo Matarrese @MyPlick
  • 23. Pricing Strategies & Tactics
    • Pricing above prevailing market prices for similar products
    • Pricing below market prices
    • Pricing at or near market prices (market pricing)
    Existing Products
    • Price Leader
      • Dominant firm that establishes product prices that other companies follow
    • Price Fixing
      • Occurs when producers illegally agree on prices among themselves
    Leonardo Matarrese @MyPlick
  • 24. Pricing Strategies & Tactics
    • Price Skimming 
      • Setting an initial high price to cover new product costs and generate a profit
    • Dynamic Pricing for E-business
      • Sellers can alter prices privately, on a one‑to‑one, customer-to customer basis
    • Penetration Pricing 
      • Setting an initial low price to establish a new product in the market
    • Price Lining
      • Offering all items in certain categories at a limited number of prices
    New Products Leonardo Matarrese @MyPlick
  • 25. Pricing Strategies & Tactics
    • Psychological Pricing 
      • Pricing tactic that takes advantage of the fact that consumers do not always respond rationally to stated prices
    • Odd-even Pricing 
      • Psychological pricing tactic based on the premise that customers prefer prices not stated in even dollar amounts
    • Discount 
      • Price reduction offered as an incentive to purchase
    New Products Leonardo Matarrese @MyPlick
  • 26. International Pricing
    • Why is pricing products for sale in other countries so complicated?
    Leonardo Matarrese @MyPlick