1. Advertising, Sales and Promotion Unit 2, Lesson 11 Product and Price Planning Copyright © Texas Education Agency, 2013. All rights reserved. 1

2. Copyright Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as the property of the Texas Education Agency and may not be reproduced without the express written permission of the Texas Education Agency, except under the following conditions: 1) Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the Texas Education Agency; 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only without obtaining written permission of the Texas Education Agency; 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way; 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any entity, whether public or private, educational or non- educational, located outside the state of Texas MUST obtain written approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty fee. Copyright © Texas Education Agency, 2013. All rights reserved. 2

3. Terms Product Product mix Product line Brand Price skimming Penetration pricing Markdown Price competition Non-price competition Price equilibrium Consumer credit Copyright © Texas Education Agency, 2013. All rights reserved. 3

4. New Products Meeting a need Improving a product Expand markets Copyright © Texas Education Agency, 2013. All rights reserved. 4

5. Stages of Product Development Generate ideas Idea screening Concept development & testing Marketing strategy Business analysis Product development Test marketing Commercialization Copyright © Texas Education Agency, 2013. All rights reserved. 5

6. Product Mix Product Levels Basic product enhanced product extended product Components product line package and labeling brand Copyright © Texas Education Agency, 2013. All rights reserved. 6

7. Product Life Cycle Copyright © Texas Education Agency, 2013. All rights reserved. 7

8. Pricing Purpose Maximize profit Return on Investment Increase sales Image Copyright © Texas Education Agency, 2013. All rights reserved. 8

9. Pricing Strategies Life Cycle Pricing Competition Pricing Supply and Demand Pricing Consumer Credit Offering Copyright © Texas Education Agency, 2013. All rights reserved. 9

10. Consumer Credit Increase sales Marketing strategy Credit policy Copyright © Texas Education Agency, 2013. All rights reserved. 10

11. Independent Practice Select a new product Determine the ideal pricing strategy for the product Write an explanation for the choice Identify how the pricing strategy will increase sales Copyright © Texas Education Agency, 2013. All rights reserved. 11