2.2.1 Product 🎧 Flashcards
What is the marketing mix?
A set of tactics a business does to attracted customers to its brand
What is the design mix ?
Function - the way it works
Cost - how much it costs to make
Design - how it looks tastes feels
What is the product life cycle made up
Off?
Intro - still investigating lots of money in research and development spending large amount on promo sales and profits are low
Growth- Customers more aware of your product sales increase but still need promo more profit and demand is high
Maturity- sales at highest and demand product is established in the market customers are aware will face competitors more promo needed as product needs to be discounted
Decline - demand decreases product becomes obsolete decreases price so that products are cleared as it’s costly to keep products
What are the 6 product lifecycle extension strategies?
- Change in product- new and improved
- Change in price - lowered to encourage purchases
- Change in place - new country closer to demand
- Change in promotions - give nice appearance of new and improved product
- Change usage - buy more and use it in a different way - increased sales
- Change in name - if product suffers bad publicity and sales are failing
What is the way that Branding can differentiate a product/ service ? What is it?
Branding - name slogan associated with product or service
Customers trust brands - builds loyalty over time
How can we differentiate a product using a USP?
Helps businesses stand out - have to purchase to obtain it
How can businesses use location to differentiate products?
Having proximity to market, customers etc
How does design help to differentiate products?
Helps you stand out
How does customer service help you differentiate your products?
Gain a good reputation and attract more loyal customers back making it safe and secure
How does quality help differentiate your products?
If you provide a higher quality product, customers will see your business as reliable - and pay more
How does product range help you differentiate products?
Variety- choice need being met, more convenient
What are the two general approaches to price?
High volume low Margin- mass producers
Low volume high margins - niche producers
What do high volume low margin businesses rely on? How are they low margin ?
Selling products
Costs of production lower- margins low- price lowered
What are the aims of a low volume high margin business ?
Max the difference between cost and sales
Add as much value as you can
What are the 6 ways of differentiating a product?
Change in …
Location
Price
Packaging
Usage
Promotions
Name
Product
What are the 6 pricing strategies?
- Penetration strategies
2.cost plus pricing - Competitor pricing
4.promotional pricing - Psychological pricing
- Skimming pricing
What are the skimming pricing strategies ?
When demand is high you out prices high to low
What is penetration pricing?
What do low prices help businesses gain?
Set prices low to encourage sales
Slowing increase price with demand
Low prices help businesses gain market share
What is cost plus pricing?
Calculating the total production cost and add it on the the price of your product
add profit margin
What is competitor pricing ? What does it lead to?
Products which are close or similar to competitors so u price it similarly to inverse competition as customers judge products in a non-price way such as convieniece
What is promotional pricing?
Products put at a cheaper price for limited time to encourage purchases
What is psychological pricing?
Businesses trying to convince customers that their product is cheap eg 99p instead of £1
What 4 factors can influence price ?
- Tech
- Competition
3.marker segment
- Product life cycle
How does tech influence price ?
- Lowers price of promotions
- Machines more reliable cannot get Ill or need breaks
- More products being made quicker leads to economic of scale
How does competition influence price?
More competitors? Match prices
How does the market segment effect price ?
Mass market? - lower price - compete with lots of other mass businesses
Niche market ?- high costs unique smaller market
How does the product lifecycle influence price ?
Intro- low price
Growth- increase price with small discounts
Maturity- full price - full advantage of demand
Decline- low price heavily discounted
