3.5.4

Question 1

main features of a product

Answer 1

-reliability
-quality
-value for money
-design
-image

Question 2

when developing a new product what must a business consider?

Answer 2

-design
-price
-expected sales
-cost of development of production

Question 3

why is it important to produce new products?

Answer 3

-customers needs and wants evolve
-to add to their existing products or to replace them altogether
-it’s an investment that involves quite high risks, as many new products do not succeed

Question 4

unique selling point

Answer 4

what makes a product special or different

Question 5

what is the marketing mix?

Answer 5

to meet customers needs a business must develop products to satisfy them, change the right price, get the goods to the right place and it must make the existence of the product known through promotion

Question 6

what are the features of the marketing mix?

Answer 6

-product: the features and appearances of the goods and services
-price: how much customers pay for a product
-promotion: how customers are informed about products
-place: the point where products are made available to customers

Question 7

what factors influence the marketing mix?

Answer 7

-the product itself
-competitors products
-target customers
-business approach

Question 8

what are the main factors to consider when designing a new product?

Answer 8

-materials
-price
-competitors
-target market

Question 9

what is a brand?

Answer 9

a named product which:
-customers see as being different from other products
-is easily recognised
-builds its image through the use of a recognisable name, logo and packaging

Question 10

branding

Answer 10

imagery a company uses to make us identify them and pick they out of the competition

Question 11

advantages of branding

Answer 11

-increases loyalty
-can launch complimentary products in same brand name
-can charge higher prices
-successful bran names can be linked to the product e.g. hoover

Question 12

disadvantages of branding

Answer 12

-could get a bad name if quality is not kept up
-cost of developing and establishing it
-can be copied

Question 13

what are the stages of the product lifecycle?

Answer 13

1. development
2. introduction
3. growth
4. maturity
5. decline

Question 14

describe the stage development

Answer 14

-idea for a product is developed and tested
-during the development stage businesses spend money but have no money coming in

Question 15

describe the stage introduction

Answer 15

-when the product is launched and the sales begin
-can involve a lot of expenditure on promotion

Question 16

describe the stage growth

Answer 16

-when the product starts to sell faster
-may need to find more outlets for production
-people are beginning to buy more of it and it’s becoming more successful

Question 17

describe the stage maturity

Answer 17

-sales rate begins to slow down
-a business should consider introducing some different versions of the product to keep sales up

Question 18

describe the stage decline

Answer 18

-when sales start to fall
-need to make more difficult decisions at this stage
-should the product be taken off the market?
-should sales be boosted again by spending money on marketing?

Question 19

extension strategy

Answer 19

techniques used to try to delay the decline stage of the product lifecycle

Question 20

examples of extension strategies

Answer 20

-find new uses for the product
-change of name or packaging
-provide a USP

Question 21

product portfolio

Answer 21

the products that a company produces

Question 22

boston matrix

Answer 22

means of analysing the product portfolio and informing decision making about possible marketing strategies

Question 23

what are the different components of the boston matrix?

Answer 23

-problem child
-stars
-dogs
-cash cows

Question 24

describe stars

Answer 24

-products experiencing high growth rates and high market share
-potential for revenue growth

Question 25

describe cash cows

Answer 25

-products experiencing high market share but low market growth -low costs, high cash revenue--> positive cash flow

Question 26

describe dogs

Answer 26

-products experiencing low market share and low market growth -associated with negative cash flow

Question 27

describe problem child

Answer 27

-products experiencing a low market share in a high growth market -need money spent to develop them

Question 28

advantage of the boston matrix

Answer 28

useful tool for analysing product portfolio decisions

Question 29

disadvantages of the boston matrix

Answer 29

-only a snapshot of the current position -does not take account of environmental factors -product lifecycle varies

Question 30

what are the different pricing methods?

Answer 30

-cost plus pricing -price skimming -price penetration -competitive pricing -loss leader

Question 31

cost plus pricing

Answer 31

this means that they calculate the cost of providing the product and add a percentage to this to decide the price

Question 32

price skimming

Answer 32

setting a high price for a product when it first enters the market

Question 33

price penetration

Answer 33

setting a low price to achieve fast sales

Question 34

competitive pricing

Answer 34

prices that match competitors

Question 35

loss leaders

Answer 35

products sold at loss in the hope that the customer will buy other items that will make a profit

Question 36

factors affecting price

Answer 36

-cost -demand -nature of the market -competitors pricing

Question 37

promotion

Answer 37

ways of communicating about the business and its products

Question 38

reasons that businesses use promotion

Answer 38

-inform customers about the business -try to persuade customers to buy a product -increase sales

Question 39

factors influencing the promotional mix

Answer 39

-finance -target audience -competitors actions -nature of the market

Question 40

methods of promotion

Answer 40

-advertising -sales promotions -public relations -personal selling

Question 41

examples of advertising

Answer 41

-newspapers -magazines -billboards

Question 42

advantage of advertising

Answer 42

effectively spreads your business

Question 43

disadvantage of advertising

Answer 43

have to pay

Question 44

examples of sales promotions

Answer 44

-discounts -buy one get one free -coupons

Question 45

advantage of sales promotions

Answer 45

encourages customers to buy your product

Question 46

disadvantage of sales promotion

Answer 46

could lose profit

Question 47

examples of public relations

Answer 47

-big shows to gain media coverage -controversial things to gain media coverage

Question 48

advantage of public relations

Answer 48

free media coverage

Question 49

disadvantage of public relations

Answer 49

can not control what will be said by the media

Question 50

example of personal selling

Answer 50

sales force to help promote products

Question 51

advantage of personal selling

Answer 51

they are informed about new offers and new products

Question 52

disadvantage of personal selling

Answer 52

have to employ a sales force

Question 53

distribution channel

Answer 53

how the ownership of a product passes from the producer to the final customer

Question 54

wholesaler

Answer 54

they buy in large quantities from a producer and sell to retailers

Question 55

retailers

Answer 55

shops that sell direct to the customer

Question 56

intermediary

Answer 56

a link in the distribution chain between the producer and the customer

Question 57

tradition channel of distribution

Answer 57

manufacturer --> wholesaler --> retailer --> consumer

Question 58

modern channel of distribution

Answer 58

manufacturer --> retailer --> consumer

Question 59

direct channel of distribution

Answer 59

manufacturer --> consumer

Question 60

factors to take into consideration when choosing a channel of distribution

Answer 60

-costs -lack of control -the product

Question 61

e-commerce

Answer 61

the act of buying/selling a product using an electronic system such as the internet

Question 62

m-commerce

Answer 62

the buying/selling of products through wireless handheld devices such as smartphones

Question 63

advantages of e-commerce

Answer 63

-customers can order any time -customers can order from home -more variety of products

Question 64

disadvantages of e-commerce

Answer 64

-need to be able to distribute wider range of destinations -worldwide competition -problems of delivering goods and accepting returns