Pricing for Convenience Goods

12585 Words Mar 30th, 2011 51 Pages
CH 12]

Business 101 — The Basics

12-1

Chapter 12

Product and Pricing Strategies
Learning Goals
1. Identify the components of the total product concept. 2. List the types of consumer goods, industrial goods, and services. 3. Explain the product mix and product lines. 4. List and describe the stages of the product life cycle. 5. Identify the stages in the new-product development process. 6. Describe how products are identified. 7. Outline the different types of pricing objectives. 8. Discuss how prices are set in the marketplace. 9. Explain how breakeven analysis can be used in pricing strategy. 10. Differentiate between skimming and penetration pricing strategies.

12-2

Product and Pricing Strategies
Chapter Overview
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A young couple intent on buying a new television may visit many stores, competing goods in competing examine perhaps dozens of TV sets, and spend days making the final decision. The stores. couple follows a regular routine from store to store in surveying competing offerings and ultimately selects the most appealing set. Specialty goods are particular products desired by a purchaser who is familiar specialty goods with the item sought and is willing to make a special effort to obtain it. A specialty good has no reasonable substitute in the Figure 12.1 The Total Product Concept mind of the buyer. The nearest BMW dealer may be 40 miles away, but a buyer might go there to obtain what they considers one of the world 's best-engineered cars. This classification of consumer goods may differ among buyers. A shopping good for one person may be a convenience good for another. Majority buying patterns determine the item 's product classification.

Marketing Strategy Implications. The consumer goods classification is a useful tool in marketing strategy. For example, once a new lawn edger has been classified as a shopping good, insights are gained about its marketing needs in promotion, pricing, and distribution methods. The impact of the consumer goods classification on various aspects of marketing strategy is shown in Table 12.1.

Classifying Industrial Goods
The five main

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