4.5 Product Life Cycle

Question 1

Product

Answer 1

Any good or service that serves to satisfy the needs and wants of customers

Question 2

Boston Matrix

Answer 2

Top: Star, Question Mark
Bottom: Cash Cow, Dog

Market Growth
<— Relative Market Share

Question 3

Branding

Answer 3

A form of differentiating a firm’s products from those of its competitors

Question 4

Brand value

Answer 4

Refers to the premium that customers are willing to pay for a brand name over and above the value of the product

Question 5

Brand development

Answer 5

Increase the power. Activities/strategies such as advertising, free samples and customer service

Question 6

Above the line promotion

Answer 6

The use of paid-for media such as TV, radio and internet

Question 7

Below the line promotion

Answer 7

Promotion not carried out in the mass media, Has fewer costs so is more attractive to small businesses

Question 8

The promotional mix

Answer 8

Where businesses use a combination of methods of promotion to suit their business and target market

Question 9

Guerilla Marketing

Answer 9

Defined as achieving conventional goals, such as profits and joy, with unconventional methods, such as investing energy instead of money.

Question 10

Viral marketing

Answer 10

Occurs when an advertising message is self-replicated like a virus

Question 11

Social Media Marketing

Answer 11

Using personal information held by social medias sites - use to carry out segmentation

Question 12

Social Networking

Answer 12

Using social media to network with colleagues, friends, professionals. Often used with recruiters

Question 13

Channel of distribution

Answer 13

The means used to get a product to the consumer

Question 14

Intermediaries

Answer 14

Agents or businesses that act as a middle person in the channel of distribution

Question 15

Wholesaler

Answer 15

Businesses that purchase large quantities of products from the manufacturer and break into smaller quantities for resale

Question 16

Distributors

Answer 16

Independent specialist business that trade in products of few manufacturers (eg car distributors)

Question 17

Cost-plus pricing

Answer 17

The price is set by adding an agreed level of profit to average cost.

Question 18

Price discrimination

Answer 18

Different prices are charged to different customers for the same product in different market segments.

Question 19

Skimming pricing

Answer 19

A high price is set to earn a high level of profit. Works if a product contains new technology

Question 20

Penetration pricing

Answer 20

A deliberately low price is set to gain market share when established brands already exist.

Question 21

Price leader

Answer 21

A dominant firm with a significant share of the market sets the price and other, smaller firms follow.

Question 22

Predator pricing

Answer 22

A firm deliberately sets a low price, possibly beneath average cost of production, to force rivals out of the market.

Question 23

Loss leading

Answer 23

Certain items are sold very cheaply to entice consumers into a shop in order that they pay full price for other items bought.

Question 24

Product Life cycle

Answer 24

x axis = time
y axis = sales
introduction -> growth -> maturity -> decline