Business chapter 12

• Four Ps – right product at the right price with the right

  promotion in the right place
• Product – the goods and services produced to satisfy a

  customer’s needs or wants
• Price – what the business is going to charge customers who want

  to buy the product
• Brand – the name or symbol given by a business to its product

  from those of its competitors. It distinguishes a product from

  competitors’ products
• Brand image – the general impression of a product held by

  consumers. Creating a brand image increases sales
• Introduction stage – product is introduced to the market. Sales are low. Product might be making a

  loss in this stage because of the cost of heavy advertising to gain product recognition
• Growth stage – product is becoming better known to consumers. Sales are increasing. The product

  usually starts to earn profit
• Maturity stage – sales are no longer growing but are not falling. This is the most profitable stage
• Decline stage – sales are falling. Product eventually becomes unprofitable and is withdrawn from the

  market
• Extension strategies – marketing activities to

  extend the maturity stage of a product
• Product quality – the product meets the needs and expectations

  of customers
• Market Skimming – setting a high price for a new product that is unique and very

  different from any other product on the market
• Penetration pricing – setting a low price to attract customers to buy a new

  product. The low price may encourage consumers to try the product. Once the

  business has built up some customer loyalty for the product it usually increases

  the price to a level similar to that of its main competitors
• Competitive pricing – setting a price similar to that of competitors’

  products which are already established in the market
• Promotional Pricing

  Pricing the product as low as possible for a

  limited period to get consumers to buy
• Cost-plus pricing

  Setting price by adding a fixed amount to the cost of making or buying the product
• Price elasticity of demand - measures how much demand for a prdocut changes when there is a change in its price
• Price inelastic demand - the percentage change in demand is less than the percentage change in price
• Price elastic demand - the percentage change in demand is greater than the percentage change in price
• Revenue - the amount earned by a business from the sale of its product
• Demand - the quantity of goods and services consumers are willing and able to buy