Chapter 12 - Developing & Pricing Products

Developing & Pricing Products

1. Identifying Products

Branding and brand awareness.Branding is process of using symbols to communicate the quantities of a product made by a particular producer.Brand awareness is extent to which a brand name comes to mind when a consumer considers a particular product category.

2. The Seven-Step Development Process

The Seven-Step Development Process is product ideas,screening,concept testing,business analysis,prototype development,product testing,test marketing and commercialization.Product ideas is typically come from consumers,the sales force,R&B departments,suppliers,or engineering personnel.Screening is eliminate ideas that do not mesh with the firm's abilities or objectives.Concept testing is companies use market research to get consumers' input about benefits and prices.Business analysis is marketers compare production costs and benefits.Prototype development is engineering,R&B or design groups produce a prototype.Product testing and test marketing is test the product to see if it meets performance requirements.Last,commercialization is the company begins full scale production and marketing.

3. Product Life Cycle

Product life cycle is series of stages in a product's commercial life.There are four stages in the PLC it is introduction,growth,maturity and decline.

4. Pricing New Products

There are four pricing new products.It is price skimming,penetration pricing,bundling strategy and price lining.Price skimming is setting an initially high price to cover new product costs and generate a profit.Penetration pricing is setting an initially low price to establish a new product in the market.Bundling strategy is grouping several products together to be sold as a single unit at a reduced price,rather than individually.Price lining is setting a limited number of prices for certain categories of products.

5. Pricing to Meet Business Objectives(cont.)

There are ten pricing to meet business objectives.It is pricing,pricing objectives,profit-maximizing objectives,market share,cost-oriented pricing,markup,variable cost,fixed cost,breakeven analysis and breakeven point.Pricing is the process of determining what a company will receive in exchange for its products.Pricing products is the goals that sellers hope to achieve in pricing products for sale.Profit-maximizing objectives is the seller's pricing decision is critical for determining the firm's revenue,which is the result of the selling price times the number of units sold.Market share is company's percentage of the total industry sales for a specific product type.Cost-oriented pricing is pricing that considers the firm's desire to make a profit and its need to cover production costs.Makeup is amount added to an item's purchase cost to sell it at a profit.Variable cost is cost that changes in the quantity of a product produced and sold.Fixed cost is cost that is incurred regardless of the quantity of a product produced and sold.Breakeven analysis is for a particular selling price,assessment of the seller's costs versus revenues at various sales volume.Lat but not least,breakeven point is the sales volume at which the seller's total revenue from sales equals total costs (variable and fixed) with neither profit nor loss.

Topic 1 - Business Environment -

What is business ? 

Business is an activity that includes sellers and buyers to buy or sells something using money.Business is also organization that provides goods or services to earn profits. In business,sometimes must occur profit or loss.Profit is the money a business makes after accounting for all the expenses. However,loss is the money that a business makes after accounting for all the expenses is more than revenue and that is called loss.Revenue actually is a money that whatever money received from selling all the product . 

There are 4 factors in business,supply,demand,global threat and uncertainty Supply is how much things of I can give people . Demand is how much things you can buy from me . Global threat is a global development of change in a situation that effects many countries of the world. Uncertainty is state of knowledge in which one or more alternatives result in a set of possible specific outcomes. 

There are two types of business , external and internal environment . The external environment is everything outside an organization's boundaries that might affect it . External environment involves domestic,global business environment,technology environment and private environment . On the other hand, internal environment is involves business management .

Economic indicator is where the operation to supply and demand in the particular areas . Standard leaving is the total quality and quantity of product & services can purchase by individual . Business cycle is the pattern of expension . Aggregate output is the amount of product that can produce or the purpose of quantity of goods and services.  

Types of economy ecosystem are plan economy,market economy,mixed economy and private economy. Degrees of competition is separate to five it is monopolistic,oligopoly,monopoly,natural monopoly and perfect competition. Example of monopolistic is coffee.Example of oligopoly is petrol station.Example of monopoly is Telekom National Berhad and it is only one producer. Example of perfect competition is maggi mee  it is highly demanded in business. 

Gross Domestic Product (GDP) is  how much things I can produce from my company . Gross National Product (GNP) is how much the country can produce and total value of the product in a country . Nominal GDP is the value of a current price. Purchasing power parity is the price that is converted .