Chap014

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  • Company: Virgin Airlines
  • See Learning Goal 1: Describe a total product offer.
  • See Learning Goal 1: Describe a total product offer. Products Consumers Won’t Give Up This slide profiles some of the goods and services people do not eliminate during a recession. Ask students: Why are the items listed on the slide considered “untouchables”? To further the discussion, ask students: What items do you consider to be “untouchable” and why?
  • See Learning Goal 1: Describe a total product offer. “ Expendable” Spending Cuts This slide shows the flipside of the previous slide and lists items that people are most likely to eliminate. Ask students to get into groups and discuss: Why are these items “expendable,” but the items on the previous slide are “untouchable”?
  • See Learning Goal 1: Describe a total product offer.
  • See Learning Goal 1: Describe a total product offer. The total product offering includes tangible as well as intangible benefits.
  • See Learning Goal 1: Describe a total product offer. Product Innovation During the Great Depression The late twenties and thirties are associated with the Great Depression, but the period was also one of great product innovation. The items on the slide were invented during the Great Depression. Have students look at the items and ask: Why do you think these items were developed during a time when most Americans had very little discretionary income? Have students work with a partner or small group to come up with specific reasons they think these products developed.
  • See Learning Goal 1: Describe a total product offer. Anything You Can Do… This slides shows that companies that innovated and create new products don’t always remain the market leaders. Point out that while Apple didn’t introduce cell phones, video recorders or game players, it has become the market leader by listening to consumers and improving these products to meet consumers’ wants and needs.
  • See Learning Goal 1: Describe a total product offer. A product can be divided into the physical and the total product. Marketing managers must take the physical and add value to create the total product offer.
  • See Learning Goal 4: Contrast brand, a brand name, and trademark and show the value of brand equity.
  • See Learning Goal 1: Describe a total product offer.
  • See Learning Goal 1: Describe a total product offer. To give students a visual of the products offered by Proctor and Gamble, use their website at www.pg.com and click on the products tab.
  • See Learning Goal 2: Identify the various kinds of consumer and industrial goods.
  • See Learning Goal 2: Identify the various kinds of consumer and industrial goods. Location, brand awareness, and image are important in marketing these goods and services.
  • See Learning Goal 2: Identify the various kinds of consumer and industrial goods. Brand name, price, and quality differences are important in marketing these goods and services.
  • See Learning Goal 2: Identify the various kinds of consumer and industrial goods. Purchasers of the items listed on this slide are brand insistent and refuse to accept substitutes.
  • See Learning Goal 2: Identify the various kinds of consumer and industrial goods. Specialty Goods Aren ’t Just for Humans : People are doting on their pets more than ever. These links show just a few things you could buy for your best friend. Ask students: Would you ever purchase any of these for your pet? Do you have a pet product idea?
  • See Learning Goal 2: Identify the various kinds of consumer and industrial goods. Unsought goods and services often rely on personal selling or specialty advertising - like the yellow pages.
  • See Learning Goal 2: Identify the various kinds of consumer and industrial goods. Identifying Consumer Goods Classifications: Beautyrest mattress - shopping good Honda Accord - shopping good McDonald ’s Big Mac - convenience good Rolls Royce automobiles - specialty good Oreo Cookies - convenience good Harvard University degree - specialty good
  • See Learning Goal 2: Identify the various kinds of consumer and industrial goods. Odd Product Ideas Not all successful products necessarily make sense. Take for example the products mentioned on this slide. To start a discussion on odd product offerings, ask students: What are some other examples of odd products that were successful or unsuccessful? For more examples of odd products that were not successful go to http://www.businessadministration.org/blog/15-ridiculous-products-that-actually-sell
  • See Learning Goal 2: Identify the various kinds of consumer and industrial goods.
  • Some value enhancers that may be included in the total product offering include: brand name, warranty, service, store surroundings, and speed of delivery. Product line refers to the group of products that are physically similar or intended for a similar market. These products may face similar competition. For example, you can purchase a Diet Coke, Diet Coke with Splenda etc. The product mix is the total of the product lines offered by a particular company. The text uses the example of Procter & Gamble. The four classes of consumer goods and services include: Convenience goods and services - candy, gum and milk Shopping goods and services - clothes, shoes and appliances Specialty goods and services - fur coats, imported chocolates and business consultants Unsought goods and services - burial service, insurance and emergency drain cleaning Capital items are expensive products that last a long time. Accessory equipment consists of capital items that are not quite as long-lasting or expensive as installations and include computers, copy machines, and various tools.
  • See Learning Goal 3: Summarize the functions of packaging.
  • See Learning Goal 3: Summarize the functions of packaging.
  • See Learning Goal 3: Summarize the functions of packaging.
  • See Learning Goal 4: Contrast brand, a brand name, and trademark and show the value of brand equity. Recognized trademarks include the Nike Swoosh, the Pillsbury Doughboy, and Apple ’s Apple.
  • See Learning Goal 7: Identify various pricing objectives and strategies.
  • See Learning Goal 7: Identify various pricing objectives and strategies. What ’s in a Name? Product names are not decided on lightly. Many companies seek professional advice regarding corporate identity.
  • See Learning Goal 4: Contrast brand, a brand name, and trademark and show the value of brand equity. Manufacturers ’ brand examples - Ford, Microsoft, Xerox Dealer brand example - Kenmore from Sears
  • See Learning Goal 4: Contrast brand, a brand name, and trademark and show the value of brand equity.
  • See Learning Goal 4: Contrast brand, a brand name, and trademark and show the value of brand equity. Brand equity is t he combination of factors (awareness, loyalty, perceived quality, images, and emotions) that people associate with a brand name. Examples: Coca-Cola and Ziploc have strong brand equity.
  • See Learning Goal 4: Contrast brand, a brand name, and trademark and show the value of brand equity. Most Valuable Brands This slide lists the 10 most valuable brands according to Forbes. As you can see, six of the most valuable brands are tech companies.
  • See Learning Goal 4: Contrast brand, a brand name, and trademark and show the value of brand equity. Origins of Automobile Symbols This slide presents the origins of car symbols. Ask the students: How important is the name and symbol of a product? What aspects should be considered in the naming process? ( Most students should suggest that the name of your product is very important, because it represents your company, tells the customers what the product is, and it should mean something.) Given that there are so many models of cars in so many different countries, naming cars becomes a very complex process. Should only one name be used in all countries or different names for the same model in different countries?
  • See Learning Goal 4: Contrast brand, a brand name, and trademark and show the value of brand equity.
  • See Learning Goal 4: Contrast brand, a brand name, and trademark and show the value of brand equity.
  • The functions packaging performs include: (1) attract the buyer ’s attention, (2) protect the goods inside, (3) be easy to open, (4) describe and give information, (5) explain the benefits of the good inside, (6) provide information on warranties, warnings and other consumer matters, and (7) give some indication of price, value, and uses. Brand names consist of a word, letter or group of words or letters that set it apart from other goods and services. A trademark is a brand that has exclusive legal protection for both its brand name and design. A manufacturers ’ brand represents manufacturers that distribute their products nationally such as Xerox or Dell. A dealer brand is often referred to as a private label and will not carry the manufacturers name, but rather carries the name of the distributor instead. For example, Kenmore is a dealer brand sold via Sears. A generic brand is the name of an entire product category. Brand equity is the value of the brand name and associated symbols. The elements of brand equity include: brand loyalty, brand awareness, and brand association.
  • See Learning Goal 5: Explain the steps in the new product development cycle. Green Ketchup and New Coke are two of the many thousands of products that failed. New product failure is common due to the fact that companies fail to properly manage the new product development process.
  • See Learning Goal 5: Explain the role of brand managers and the steps of the new-product development process.
  • See Learning Goal 5: Explain the role of brand managers and the steps of the new-product development process.
  • See Learning Goal 1: Describe a total product offer.
  • See Learning Goal 6: Describe the product life cycle.
  • See Learning Goal 6: Describe the product life cycle.
  • See Learning Goal 6: Describe the product life cycle. Profits Beyond the Grave This slide explores the top earnings of deceased celebrities. Ask students: Albert Einstein is associated with all things “brainy.” His earnings weren’t generated by sales of any products he invented, so how did his estate bring in $10 million in 2010? (Einstein’s name appears on such things as Baby Einstein products, Chrysler’s Ram brand truck ads, and a collection of A.J. Morgan “geek chic glasses. A new brain videogame for Nintendo DS retails for about $50. Go to http://www.forbes.com/2010/10/22/top-earning-dead-celebrities-business-entertainment-dead-celebs-10_land.html to read more about each of the deceased celebrities on the slide.) Ask students: What do you think the future earnings of Michael Jackson will be?
  • The six steps in the new-product development process include: Idea generation, development, product screenings, testing, product analysis, and commercialization. During the product screening process the number of new-product ideas a firm is working on is reduced, so that it may focus on the most promising ideas. Product analysis occurs after screening and involves making cost estimates and sales forecasts to get a feeling for the profitability of new-product ideas. The two steps in commercialization involve promoting the product to distributors and retailers, and the development of strong advertising and sales campaigns. The product life cycle is a theoretical model which explains what happens to sales and profit for a product over a particular period of time. This model has four stages: introduction, growth, maturity, and decline.
  • See Learning Goal 7: Identify various pricing objectives and strategies. One strategy many students have experienced but might not fully understand is the loss leader strategy. This strategy is often used around the Thanksgiving holiday when grocery stores offer to sell customers turkeys for much less than their actual cost in an effort to attract consumers into the store. This leads to more traffic and sales of more products.
  • See Learning Goal 7: Identify various pricing objectives and strategies.
  • See Learning Goal 7: Identify various pricing objectives and strategies.
  • See Learning Goal 7: Identify various pricing objectives and strategies. When Apple introduced the iPhone, they used a skimming price strategy. Walmart has effectively used everyday low pricing or EDLP to dominate the retail sector.
  • See Learning Goal 7: Identify various pricing objectives and strategies.
  • Short-term pricing objectives include loss leaders and is designed to build traffic as well as achieving greater market share. Long-term pricing objectives include achieving a target return on investment and creating a certain image. It is important that marketing managers set pricing objectives in context of other marketing decisions, since the pricing objectives may differ greatly. The limit of a cost-based pricing system is that in the long run it is not the producer that establishes price but rather the market place. To effectively establish price, the producer must take into account competitor prices, marketing objectives, actual cost, and the expected cost of product updates. Psychological pricing involves setting the price of goods or services at price points that make the product appear less expensive. For example, a TV may be priced at $999, since it sounds less expensive than $1,000.
  • Chap014

    1. 1. Chapter 14 Developing and Pricing Goods and ServicesMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
    2. 2. ChapterFourteen LEARNING GOALS 1. Describe a total product offer. 2. Identify the various kinds of consumer and industrial goods. 3. Summarize the functions of packaging. 4. Contrast brand, brand name, and trademark, and show the value of brand equity. 14-2
    3. 3. ChapterFourteen LEARNING GOALS 5. Explain the steps in the new-product development process. 6. Describe the product life cycle. 7. Identify various pricing objectives and strategies. 14-3
    4. 4. Profile MARY BARRA General Motors • Senior vice president of global product development, Barra is GM’s highest-ranking woman. • With a team of over 36,000 members, she manages global strategic product alliances. • GM is working to gain market share in highly competitive segments like small fuel efficient cars. 14-4
    5. 5. ChapterFourteen NAME that COMPANY It’s no secret that the airline industry is extremely competitive and many airlines have cut basic services like free baggage and food. In order to set itself apart from its competitors, this company takes a different path by offering door-to-door limousine service and in-flight massages. Name that company! 14-5
    6. 6. ProductDevelopment andthe Total ProductOffer DEVELOPING VALUE LG1 • According to the American Marketing Association, value is a foundation of marketing. • Value -- Good quality at a fair price. • Adapting products to new markets is an ongoing challenge. • Product development is a key activity in any modern business. 14-6
    7. 7. ProductDevelopment andthe Total Product PRODUCTS CONSUMERSOffer LG1 WON’T GIVE UP • Internet service • Cell phone service • Cable television • Discount apparel • Haircuts and coloring • Fast-food Source: www.bigresearch.com. 14-7
    8. 8. ProductDevelopment andthe Total Product PRODUCTS “EXPENDABLE”Offer LG1 by SPENDING CUTS • Luxury handbags • Satellite radio • Specialty apparel • High-end cosmetics • Facials Source: www.bigresearch.com. 14-8
    9. 9. DistributedProductDevelopment DISTRIBUTED PRODUCT LG1 DEVELOPMENT • Distributed Product Development -- The handing off of various parts of your innovation process - often overseas. • The increase in outsourcing has resulted in using multiple organizations separated by cultural, geographic and legal boundaries. 14-9
    10. 10. Developing aTotal ProductOffer DEVELOPING a LG1 TOTAL PRODUCT • Total Product Offer -- Everything consumers evaluate when deciding whether to buy something. • Products are evaluated on many different dimensions, both tangible and intangible. • Marketers must think like and talk to consumers to find out what’s important. 14-10
    11. 11. Developing aTotal ProductOffer PRODUCT INNOVATION DURING LG1 the GREAT DEPRESSION Source: BusinessWeek Small Biz. 14-11
    12. 12. Developing aTotal ProductOffer ANYTHING YOU CAN DO… LG1 Products Replacing Products Source: Newsweek, February 21, 2011. 14-12
    13. 13. Developing aTotal ProductOffer POTENTIAL COMPONENTS LG1 of a TOTAL PRODUCT OFFER 14-13
    14. 14. QUALITY and SUSTAINABILITY (Thinking Green)• Trident Seafoods assures fish sustainability by staying well within catch limits.• One part of its sustainability practices is to use all of the fish. That results in fish oil and byproducts used in fertilizer and fishmeal. Photo Courtesy of: Lisa Brunette 14-14
    15. 15. Product Lines& Product Mix UNDERSTANDING LG1 PRODUCT LINES • Product Line -- A group of products that are physically similar or intended for a similar market. • Product lines often include competing brands like: - Coca-Cola - Diet Coke - Coke Zero - Cherry Coke Photo Courtesy of: Coca-Cola Art Gallery 14-15
    16. 16. Product Lines& Product Mix The PRODUCT MIX LG1 • Product Mix -- The combination of all product lines offered by a manufacturer or service provider. • Product mixes like Procter & Gamble’s can be extensive: - Toothpaste - Cosmetics - Diapers - Batteries - Bar soap 14-16
    17. 17. ProductDifferentiation DIFFERENTIATING PRODUCTS LG2 • Product Differentiation -- The creation of real or perceived product differences. • Marketers use a mix of pricing, advertising and packaging to create different images. Examples include: - Bottled water - Aspirin - Fast-food - Laundry detergent - Shampoo 14-17
    18. 18. Marketing DifferentClasses ofConsumer Goodsand Services CLASSIFYING CONSUMER LG2 GOODS and SERVICES • Convenience Goods and Services -- Products consumers purchase frequently with minimal effort. These include: - Candy and snacks - Gas - Milk and eggs 14-18
    19. 19. Marketing DifferentClasses ofConsumer Goodsand Services CLASSIFYING SHOPPING LG2 GOODS and SERVICES • Shopping Goods and Services -- Products consumers buy only after comparing value, quality, price, and styles. These include: - Clothes and shoes - Appliances and furniture - Childcare - Home remodeling 14-19
    20. 20. Marketing DifferentClasses ofConsumer Goodsand Services CLASSIFYING SPECIALTY LG2 GOODS and SERVICES • Specialty Goods and Services -- Products with unique characteristics and brand identity. These include: - Tiffany jewelry - Rolex watches - Lamborghini automobiles - Ritz Carlton Hotels 14-20
    21. 21. Marketing DifferentClasses ofConsumer Goodsand Services SPECIALTY GOODS AREN’T LG2 JUST for HUMANS • Would you buy these for your dog? - Wine with custom labels featuring Fido - Doggy day camp and in-home pet care - A bound journal of your pets exploits - Luxury shampoos and hair-care products - A sound system to eliminate pet-unfriendly frequencies - A “dog beer” at the Pawbar Source: Entrepreneur, June 2010. 14-21
    22. 22. Marketing DifferentClasses ofConsumer Goodsand Services CLASSIFYING UNSOUGHT LG2 GOODS and SERVICES • Unsought Goods and Services -- Products consumers aren’t aware of or haven’t thought of buying until they need them. These include: - Car-towing services - Funeral services - Renter’s insurance Photo Courtesy of: Paul Chenoweth 14-22
    23. 23. Marketing DifferentClasses ofConsumer Goodsand Services IDENTIFYING CONSUMER LG2 GOODS CLASSIFICATIONS • How would you classify these consumer products? - Beautyrest mattress - Honda Accord - McDonald’s Big Mac - Rolls Royce automobiles - Oreo Cookies - Harvard University degree 14-23
    24. 24. Marketing DifferentClasses ofConsumer Goodsand Services ODD PRODUCT IDEAS LG2 that WERE SUCCESSFUL • Pet Rock - For $3.95 you could buy a gift-wrapped rock with eyes and a training manual. • Garbage Pail Kids - Perhaps the grossest trading cards ever produced. • Mood Rings - Wildly popular as the changing colors of the ring supposedly measured your mood. • Chia Pets - Animal shaped (even President shaped) clay figures that grew sprouts. 14-24
    25. 25. MarketingIndustrial Goodsand Services CLASSIFYING INDUSTRIAL LG2 GOODS and SERVICES • Industrial Goods -- Products used in the production of other products and sold in the B2B market. • Industrial goods include: - Installations - Capital items - Accessory equipment - Supplies - Service 14-25
    26. 26. ProgressAssessment PROGRESS ASSESSMENT • What value enhancers may be included in a total product offer? • What’s the difference between a product line and a product mix? • Name the four classes of consumer goods and services and give examples of each. • Describe three different types of industrial goods. 14-26
    27. 27. PackagingChanges theProduct USES of PACKAGING LG3 • Companies often use packaging to change and improve their basic product. Examples include: - Microwave popcorn - Tuna pouches - McDonald’s green packaging • Good packaging can also make a product more attractive to retailers. 14-27
    28. 28. PackagingChanges theProduct SOME KEY FUNCTIONS of LG3 PACKAGING 1) To attract buyers’ attention 2) Protect the goods inside and be tamperproof 3) Be easy to open 4) Describe and give information about the product 5) Explain the product’s benefits 6) Provide warranty information and warnings 7) Give an indication of price, value, and uses 14-28
    29. 29. The GrowingImportance ofPackaging BUNDLING LG3 • Bundling -- Grouping two or more products together and pricing them as a unit. • Virgin Airlines bundles door-to-door limo service and inflight massage with some tickets. • Financial institutions bundle advice with Photo Courtesy of: Joey Day purchases. 14-29
    30. 30. Branding andBrand Equity UNDERSTANDING BRANDING LG4 • Brand -- Name, symbol, or design that identifies the goods or services and distinguishes them from competitors’ offerings. • Trademark -- A brand that has exclusive legal protection for both its brand name and design. 14-30
    31. 31. The NAME GAME (Reaching Beyond Our Borders)• With a couple hundred countries on the cyber- platform, choosing the right name is a global issue.• Every once in a while, a successful name is created by accident. Google was supposed to be called Googol.• What would you rename Very Vegetarian if given the chance? Would you want to ask an expert? 14-31
    32. 32. WHAT’S in a NAME?Source: Bloomberg Businessweek, October 21, 2010. 14-32
    33. 33. Branding andBrand Equity KEY BRAND CATEGORIES LG4 • Manufacturers’ Brands – Brand names of manufacturers that distribute products nationally. • Dealer (Private- Label) Brands -- Products that carry a retailer’s or distributor’s brand name instead of a Photo Courtesy of: Joe Mudd manufacturer’s. 14-33
    34. 34. Branding andBrand Equity KEY BRAND CATEGORIES LG4 • Generic Goods -- Nonbranded products that sell at a discount compared to manufacturers’ or dealers’ brands. • Knockoff Brands -- Illegal copies of national brands. 14-34
    35. 35. GeneratingBrand Equityand Loyalty ESTABLISHING BRAND EQUITY LG4 and LOYALTY • Brand Equity – The value of the brand name and associated symbols. • Brand Loyalty -- The degree to which consumers are satisfied and are committed to further purchases. 14-35
    36. 36. GeneratingBrand Equityand Loyalty MOST VALUABLE BRANDS LG4 Source: Forbes, August 30, 2010. 14-36
    37. 37. GeneratingBrand Equityand Loyalty ORIGINS of LG4 AUTOMOBILE SYMBOLS • Volvo - Symbol for iron • Lamborghini - Company founder’s zodiac sign was Taurus • Volkswagen - Product of an office contest • Porsche - Coat of arms for city and state headquarters Source: World Features Syndicate. 14-37
    38. 38. GeneratingBrand Equityand Loyalty BUILDING BRAND AWARENESS LG4 • Brand Awareness -- How quickly or easily a given brand name comes to mind when someone mentions a product category. • Consumers reach a point of brand preference when they prefer one brand over another. • When consumers reach brand insistence, they will not accept substitute brands. 14-38
    39. 39. Creating BrandAssociations& Brand BUILDING BRANDManagement LG4 ASSOCIATIONS • Brand Association -- Linking a brand to other favorable images, like celebrities or a geographic area. • Brand Manager -- Person responsible for a particular brand and handles all the elements of the brand’s marketing mix. 14-39
    40. 40. ProgressAssessment PROGRESS ASSESSMENT • What functions does packaging now perform? • What’s the difference between a brand name and a trademark? • Explain the difference between a manufacturers’ brand, a dealer brand, and a generic brand. • What are the key elements of brand equity? 14-40
    41. 41. The NewProductDevelopment The NEW PRODUCTProcess LG5 DEVELOPMENT PROCESS 14-41
    42. 42. ProductScreening &Analysis BRINGING NEW PRODUCTS LG5 to the MARKET • Product Screening -- Reduces the number of new products a firm is working on to focus on the most promising. • Product Analysis -- Focuses on the cost estimates and sales forecasts to get an idea of potential profitability. 14-42
    43. 43. ProductDevelopmentand Testing BRINGING NEW PRODUCTS LG5 to the MARKET • Concept Testing -- Takes a product idea to consumers to test reactions. • Commercialization -- Promoting the product to distributors and retailers and developing the promotional campaign. 14-43
    44. 44. DON’T COME to ME, I’LL COME to YOU (Spotlight on Small Business)• The popularity of food trucks has risen, but it’s no longer just hot dogs and hamburgers: - Clover Food Truck in Boston/Cambridge offers a rotating menu of local organic foods. - Sugar Philly Truck in Philadelphia offers crè me brulee hot off the truck. - Dim and Den Sum in Cleveland has some of the best food truck art in America. - Koi Fusion PDX in Portland is one of the few mobile eateries in that town. 14-44
    45. 45. The ProductLife Cycle The FOUR STAGES of a LG6 PRODUCT LIFE CYCLE • Product Life Cycle -- A theoretical model of what happens to sales and profits for a product over time. • Product Life Cycle Stages: 1. Introduction 2. Growth 3. Maturity 4. Decline 14-45
    46. 46. The ProductLife Cycle SALES and PROFITS DURING LG6 the PRODUCT LIFE CYCLE 14-46
    47. 47. The ProductLife Cycle PROFITS BEYOND the GRAVE LG6 Top Earning Deceased Celebrities in 2010 Source: Forbes, www.forbes.com, accessed July 2011. 14-47
    48. 48. ProgressAssessment PROGRESS ASSESSMENT • What are the six steps in the new-product development process? • What’s the difference between product screening and product analysis? • What are the two steps in commercialization? • What’s the theory of the product life cycle? 14-48
    49. 49. CompetitivePricing PRICING OBJECTIVES LG7 1) Achieving a target return on investment or profit 2) Building traffic 3) Achieving greater market share 4) Creating an image 5) Furthering social objectives both short-run and long-run 14-49
    50. 50. CompetitivePricing PRICING STRATEGIES LG7 • Cost-based pricing measures cost of producing a product including materials, labor, and overhead. • Target Costing – Designing a product that satisfies customers and meets the firm’s targeted profit margins. • Competition-Based Pricing -- A strategy based on what the competition is charging for its products. 14-50
    51. 51. Break-EvenAnalysis USING BREAK-EVEN ANALYSIS LG7 • Break-Even Analysis -- The process used to determine profitability at various levels of sales. The break-even point is where revenues equals cost. • Total Fixed Costs -- All costs that remain the same no matter how much is produced or sold. • Variable Costs -- Costs that change according to the level of production. 14-51
    52. 52. Other PricingStrategies PRICING ALTERNATIVES LG7 • Skimming Price Strategy -- Pricing new products high to recover costs and make high profits while competition is limited. • Penetration Price Strategy -- Pricing products low with the hope of attracting more buyers and discouraging other companies from competing in the market. • Everyday Low Pricing (EDLP) -- Setting prices lower than competitors with no special sales. 14-52
    53. 53. Other PricingStrategies PRICING STRATEGIES LG7 of RETAILERS • High-Low Pricing -- Using regular prices that are higher than EDLP stores except during special sales when they are lower. • Psychological Pricing -- Pricing products at price points that make a product seem less expensive than it is. 14-53
    54. 54. ProgressAssessment PROGRESS ASSESSMENT • List two short-term and two long-term pricing objectives. Can the two be compatible? • What are the limitations of a cost-based pricing strategy? • What’s psychological pricing? 14-54

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