3.3.1 Marketing Mix - Product Flashcards
What are the costs of developing a new product?
Market research to identify customer needs Development of a new product
What are the benefits of new product development?
Charge higher prices for new products
Increase potential sales, revenue and profit
May achieve growth and economies of scale
What is ‘brand image’?
general impression of a product held by consumers
What are the purposes of ‘brand image’?
Consumers recognise their product more easily Product can be charged higher than less well-known brands Easier to launch new products into market
What are the roles of packaging?
Protect product
Give information about product
To help consumers recognise product
To keep product fresh
What is the ‘product life cycle’?
the cycle which every product goes through from introduction to withdrawal or eventual demise
What are the main stages of a product life cycle?
Introduction
Growth
Maturity
Decline
What are ‘extension strategies’?
marketing activities to extend the maturity stage of a product
Examples of ‘extension strategies’?
Finding new markets for product
Finding new uses for product
Adapting product or packaging to improve its appeal to consumers
Increased advertising and other promotional activities
Marketing decision in ‘Introduction’
Product: Only a basic model of the product is available Price: Prices might lower than competitors prices to attract consumer
Promotion: High promotional activity
Place: The product may be offered for sale in specially selected outlets
Marketing decisions in ‘Growth’
Product: Changes might be made to the product as a result of feed back from consumers in the test market Price: Brand image helps to create customer loyalty Promotion: Promotional activity still high to continue persuading customers
Place: The product is more widely available, which helps to increase sales
Marketing decisions in ‘Maturity’
Product: Extension strategies might be used to keep the product in this, the most profitable stage of its life cycle
Price: Price will remain similar to that of competitor products
Promotion: Promotional activities are aimed at reminding the customers that the products are still available
Place: The product is now available for purchase through a wide distribution network
Marketing decisions in ‘Decline’
Product: The product and packaging is not altered Price: The price might be reduced to maintain sales or sell off the remaining stock before withdrawing the product
Promotion: Advertise the products at a lower price Place: The product is only available in profitable outlets
