3.3.1 - marketing mix - product

Question 1

what is the marketing mix?

Answer 1

a term which is used to describe all the activities which go into marketing a product or service. these activities are known as the four Ps.​
- product ​
- price ​
- place ​
- promotion

Question 2

what are the benefits and drawbacks of developing new products?

Answer 2

• will give the business a USP (Unique selling point) ​
• allows the business to expand into new and existing markets e.g. new countries, the vegan market, the diet market, the healthy lifestyle market ​
• the business will have to carry out market research before launching a new product- this is expensive ​
• the brand image could be damaged if the company fails to meet customer needs with the new product (Coca Cola- new ‘improved’ taste)​
• the cost of producing trial products is expensive​

Question 3

what is brand image?

Answer 3

an image or identity given to a product which gives it a personality of its own and distinguishes it from competitors

Question 4

what are the benefits of a strong brand image?

Answer 4

• gives the business a USP.​
• customers are more likely to be loyal towards your business over competitors. This will lead to an increase in sales. ​
• may allow the business to charge a premium price

Question 5

what are the two roles of packaging?

Answer 5

• it has to be suitable for the product to be stored in e.g. keeping it fresh if it is perishable or ensures it doesn’t leak out of the packaging e.g. milk and that the packaging protects the actual product e.g. eggs.​
• to promote the product e.g. to attract customer’s attention, portrays the impression that it is a premium product (Chanel), provides information about the product e.g. ingredients

Question 6

what are the stages of product life cycle?

Answer 6

• development
• introduction
• growth
• maturity
• saturation
• decline

Question 7

what happens in the development stage?

Answer 7

• market research is carried out
• the prototype is tested before the product is launched
• there are 0 sales at this stage

Question 8

what happens in the introduction stage?

Answer 8

• sales are low at first as consumers are not aware of the product
• lots of capital is spent on advertising the product
• no profits are made yet as sales are low and the revenue does not cover the development costs
• prices are high so that quality is perceived as high

Question 9

what happens in the growth stage?

Answer 9

• sales grow rapidly
• prices are usually high as it is still a ‘new’ product
• profits start to be made

Question 10

what happens in the maturity stage?

Answer 10

• competition becomes intense
• sales only increase slowly
• prices are reduced to gain competitive advantage
• a lot of advertising is used to maintain sales
• profits are at there highest at this stage

Question 11

what happens in the saturation stage?

Answer 11

• sales reach their highest point
• competition is high and prices have to be reduced to compete with them
• profits begin to fall
• advertising may be high if the business tries to bring in an extension strategy

Question 12

what happens in the decline stage?

Answer 12

• sales decrease as competition is extremely high and the product may have gone out of fashion
• the product is usually withdrawn from the market at this stage

Question 13

what are some extension strategies?

Answer 13

• sell to new markets e.g. other countries ​
• modify the packaging e.g. colour/labels​
• use a new advertising campaign​
• introduce a new improved version of the old product e.g. new flavours, new specification​
• sell through additional retail outlets