3 - Product Decisions

Question 1

Describe ‘Product’ Of The Marketing Mix
(3 Points)

Answer 1

~ Meeting the customers needs and wants.

~ Factors for why customers would choose your product over others.

~ Businesses need a variety of products, so if one fails the business can depend on others.

Question 2

What Is The Boston Matrix?
(2 Points)

Answer 2

~ Tool used to help a business understand its product portfolio.

~ Model of portfolio analysis.

Question 3

Describe ‘Stars’ Of The Boston Matrix
(3 Points)

Answer 3

~ High growth, high share.

~ Lots of marketing would take place, to stay relevant, due to increased competition.

~ Lots of cash needed, to fund promotion.

Question 4

Describe ‘Question Marks’ Of The Boston Matrix
(3 Points)

Answer 4

~ High growth, low share.

~ Lots investment would take place, to increase awareness.

~ Are not profitable yet, are facing cash flow problems.

Question 4

Describe ‘Cash Cow’ Of The Boston Matrix
(3 Points)

Answer 4

~ Low growth, high share.

~ Lots of high profits and low costs, maximising sales.

~ Maturity stage, extension strategies may be necessary.

Question 5

Describe ‘Dogs’ Of The Boston Matrix
(3 Points)

Answer 5

~ Low growth, low share.

~ Negative sales trend, pretty much a lost cause

~ Extension strategies can be used, to keep the business alive.

Question 6

What Is The Product Lifecycle?

Answer 6

Sales of a product over a period of time.

Question 7

Describe ‘Development Stage’ Of The Product Lifecycle
(3 Points)

Answer 7

~ Very costly for research and development and little promotion.

~ No revenue, due to no sales, negative cash flow.

~ High risk of failure.

Question 8

Describe ‘Introduction Stage’ Of The Product Lifecycle
(3 Points)

Answer 8

~ Lots of heavy promotion, so high costs.

~ High price, to cover promotional costs.

~ Low sales, and negative cash flow.

Question 9

Describe ‘Growth Stage’ Of The Product Lifecycle
(3 Points)

Answer 9

~ Increased demand, increase branding, to gain more loyalty.

~ Rising sales, require more outlets to stock the product.

~ Rising output, EOS, reducing unit costs.

Question 10

Describe ‘Maturity Stage’ Of The Product Lifecycle
(3 Points)

Answer 10

~ Saturated market, low market growth.

~ Heavy promotion strategies to retain customers.

~ Think about extension strategies.

Question 11

Describe ‘Decline Stage’ Of The Product Lifecycle
(3 Points)

Answer 11

~ Aim to keep, loyal customers.

~ Lots of branding and promotion, for loyal customers.

~ Reduce channels of distribution.

~ Sales are reducing.

Question 12

Describe ‘Extension Strategies’ Of The Product Lifecycle
(4 Points)

Answer 12

~ Target and position a new segment.

~ Reduce price to increase sales.

~ Advertising.

~ Enter international markets.

Question 13

Describe New Product Development
(2 Points)

Answer 13

~ Creation of a new product.

~ Influenced by available technology and competitors.