Retailing Chapter 2

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Retailing Chapter 2

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3. Chapter Objectives Differentiate between a product item and product line. Classify products as consumer goods or business goods. Explain the seven steps in developing a new product. Identify the stages in a product’s life cycle. Define price and the role it plays in determining profit. Describe the factors that affect pricing decisions. Identify pricing strategies.

4. Product Defined A specific model of athletic shoe would be called a product item.

5. Product Defined Products can be classified as consumer goods or business goods.

6. Steps in New Product Development The seven steps in new product development are:

7. Steps in New Product Development

8. Product Life Cycle The four stages in the product life cycle are:

9. Management of the Product Life Cycle The three ways to manage the product life cycle are:

10. Operating an e-tail business on an electronic channel—the Web—can be costly, due to design, delivery, returns, and operating expenses. Though Many larger dot-com companies crashed in the 1990’s, small stores like Harris Cyclery of West Newton, Massachusetts, actually increase sales using a basic Web site. Today, a third of Harris’s bicycle business rides in on the Web to get hard-to-find parts and personal service. Describe an e-business’s home page to your class after viewing one through marketingseries.glencoe.com. E-Trading Collectibles

11. Explain the seven steps involved in developing a new product. Name the four stages in the product life cycle. What three things can be done to manage a product through its life cycle? Quick Check Answers The steps are 1) SWOT analysis, 2) idea generation, 3) screening and evaluation, 4) business analysis, 5) development, 6) test marketing, and 7) commercialization. introduction, growth, maturity, and decline Modify the product; market the product; and reposition the product. Quick Check Answers The steps are 1) SWOT analysis, 2) idea generation, 3) screening and evaluation, 4) business analysis, 5) development, 6) test marketing, and 7) commercialization. introduction, growth, maturity, and decline Modify the product; market the product; and reposition the product.

12. Pricing Price is important in a business because it helps determine a company’s profit or loss.

14. Pricing Considerations and Strategies Three types of pricing strategies are:

15. Pricing Considerations and Strategies Other pricing considerations include:

16. Pricing Objectives and Strategies Pricing objectives and strategies include:

17. Price Adjustments and Regulations Manufacturers will offer discounts in the following situations:

18. Price Adjustments and Regulations The Sherman Anti-Trust Act prohibits price fixing and predatory pricing.

19. How is pricing related to profit and the marketing mix? List five factors that affect price decisions. What are two common pricing objectives and special pricing strategies? Quick Check Answers Price helps determine a company’s profit or loss; it’s related to the marketing mix because it must be directed to the target market. Price is one of the Four Ps of the marketing mix. consumer perception, demand, cost, product life cycle stage, and competition Answers may include profit objectives and market share objectives; price lining, bundle pricing, loss-leader pricing, and yield-management pricing.Quick Check Answers Price helps determine a company’s profit or loss; it’s related to the marketing mix because it must be directed to the target market. Price is one of the Four Ps of the marketing mix. consumer perception, demand, cost, product life cycle stage, and competition Answers may include profit objectives and market share objectives; price lining, bundle pricing, loss-leader pricing, and yield-management pricing.

20. Explain the difference between product item and product line. Checking Concepts Checking Concepts Answers A product item is a specific model or size of a product; a product line is a group of closely related products that are sold by a company. Products can be classified as consumer goods or business goods. Products are goods, services, or ideas that satisfy consumer needs; products can be tangible (goods) or intangible (services).  SWOT analysis, idea generation, screening and evaluation, business analysis, development, test marketing, and commercialization are the seven steps. Checking Concepts Answers A product item is a specific model or size of a product; a product line is a group of closely related products that are sold by a company. Products can be classified as consumer goods or business goods. Products are goods, services, or ideas that satisfy consumer needs; products can be tangible (goods) or intangible (services).  SWOT analysis, idea generation, screening and evaluation, business analysis, development, test marketing, and commercialization are the seven steps.

21. Identify the four stages in a product’s life cycle. Checking Concepts Checking Concepts Answers The stages are introduction, growth, maturity, and decline. Price is defined as the value placed on goods or services being exchanged. Every item sold carries a price.  The number of items sold times the price equals sales revenue. The amount of profit equals costs subtracted from price. Pricing strategies are influenced by consumer perception, demand, cost, product life cycle stage, and competition. Checking Concepts Answers The stages are introduction, growth, maturity, and decline. Price is defined as the value placed on goods or services being exchanged. Every item sold carries a price.  The number of items sold times the price equals sales revenue. The amount of profit equals costs subtracted from price. Pricing strategies are influenced by consumer perception, demand, cost, product life cycle stage, and competition.

22. Define and compare markup and cost-plus pricing. Checking Concepts Checking Concepts Answers Markup is the difference between the retail or wholesale price and the cost of an item.  Cost-plus pricing involves calculating all costs and expenses and adding desired profit to arrive at a price.  In a sense, markup is the profit component in cost-plus pricing.Checking Concepts Answers Markup is the difference between the retail or wholesale price and the cost of an item.  Cost-plus pricing involves calculating all costs and expenses and adding desired profit to arrive at a price.  In a sense, markup is the profit component in cost-plus pricing.

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