1. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 1 Chapter 12: Creating and Pricing Products That Satisfy Customers

2. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 2 Learning Objectives 1. Explain what a product is and how products are classified. 2. Discuss the product life cycle and how it leads to new product development. 3. Define product line and product mix and distinguish between the two. 4. Identify the methods available for changing a product mix. 5. Explain the uses and importance of branding, packaging, and labeling.

3. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 3 Learning Objectives (cont.) 6. Describe the economic basis of pricing and the means by which sellers can control prices and buyers’ perceptions of prices. 7. Identify the major pricing objectives used by businesses. 8. Examine the three major pricing methods that firms employ. 9. Explain the different strategies available to companies for setting prices. 10. Describe three major types of pricing associated with business products.

4. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 4  Consumer Product Classifications  Business Product Classifications Classification of Products

5. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 5  Stages of the Product Life-Cycle 1. Introduction 2. Growth 3. Maturity 4. Decline  Using the Product Life-Cycle The Product Life-Cycle

6. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 6  The Product Line and Product Mix  Managing Existing Products 1. Product Modifications 2. Line Extensions  Deleting Products  Developing New Products 1. Idea Generation 2. Screening 3. Concept Testing 4. Business Analysis 5. Product Development 6. Test Marketing 7. Commercialization  Why Do Products Fail? Product Line and Product Mix

7. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 7  What Is a Brand?  Types of Brands  Benefits of Branding  Choosing and Protecting a Brand  Branding Strategies  Brand Extensions  Packaging 1. Packaging Functions 2. Package Design Considerations  Labeling Branding, Packaging, and Labeling

8. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 8  The Meaning and Use of Price  Supply and Demand Affects Prices  Price and Non-Price Competition  Buyers’ Perceptions of Price Pricing Products

9. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 9  Survival  Profit Maximization  Target Return on Investment  Market-Share Goals  Status-Quo Pricing Pricing Objectives

10. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 10  Cost-Based Pricing  Demand-Based Pricing  Competition-Based Pricing Pricing Methods

11. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 11  New-Product Pricing  Differential Pricing  Psychological Pricing  Product-Line Pricing  Promotional Pricing Pricing Strategies

12. © 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 12 | Slide 12  Geographic Pricing  Transfer Pricing  Discounting Pricing Business Products