2.2 (market mix) Flashcards
What is the design mix
Function
Aesthetics
Cost
What are features of products focussed on aesthetics?
- High added value
- shorter product lifecycle
- Patents/Copyright
What are features of products focussed on function?
- longer product lifestyle
- lower promotional costs
- demand is more stable and predictable
Why do businesses focus on when considering costs ?
- how much value is added
- sales ability
What are the stages of the product lifestyle?
1- intro
2- growth
3- maturity
4- decline
What happens during the intro of the products lifestyle?
- costs High
- low level of sales
- negative cash flow
What is price penetration?
setting a relatively low price to boost sales
What is price skimming?
setting a relatively high price to boost profits.
What happens in the growth stage?
- advertising
- fast growing sales
- cash flow may become positive
- wider distribution
What happens in the maturity stage?
- slower sales growth
- fight for market share
- Attract new users
What happens in the decline stage?
- falling sales
- market saturation
- weaker cash flow
Why do products enter the decline stage?
- changes in consumer wants
- increased competition
- failure to develop product
What are extension strategies for?
To keep the product sales at the highest level
What are examples of extension strategies?
- advertising
- price reduction
- new packaging
What is the purpose if the product lifestyle?
- forecast future sales trends
- helps analyse product portfolio
