4.5 Product Life Cycle Flashcards
Product
Any good or service that serves to satisfy the needs and wants of customers
Boston Matrix
Top: Star, Question Mark
Bottom: Cash Cow, Dog
Market Growth
<— Relative Market Share
Branding
A form of differentiating a firm’s products from those of its competitors
Brand value
Refers to the premium that customers are willing to pay for a brand name over and above the value of the product
Brand development
Increase the power. Activities/strategies such as advertising, free samples and customer service
Above the line promotion
The use of paid-for media such as TV, radio and internet
Below the line promotion
Promotion not carried out in the mass media, Has fewer costs so is more attractive to small businesses
The promotional mix
Where businesses use a combination of methods of promotion to suit their business and target market
Guerilla Marketing
Defined as achieving conventional goals, such as profits and joy, with unconventional methods, such as investing energy instead of money.
Viral marketing
Occurs when an advertising message is self-replicated like a virus
Social Media Marketing
Using personal information held by social medias sites - use to carry out segmentation
Social Networking
Using social media to network with colleagues, friends, professionals. Often used with recruiters
Channel of distribution
The means used to get a product to the consumer
Intermediaries
Agents or businesses that act as a middle person in the channel of distribution
Wholesaler
Businesses that purchase large quantities of products from the manufacturer and break into smaller quantities for resale
Distributors
Independent specialist business that trade in products of few manufacturers (eg car distributors)
Cost-plus pricing
The price is set by adding an agreed level of profit to average cost.
Price discrimination
Different prices are charged to different customers for the same product in different market segments.
Skimming pricing
A high price is set to earn a high level of profit. Works if a product contains new technology
Penetration pricing
A deliberately low price is set to gain market share when established brands already exist.
Price leader
A dominant firm with a significant share of the market sets the price and other, smaller firms follow.
Predator pricing
A firm deliberately sets a low price, possibly beneath average cost of production, to force rivals out of the market.
Loss leading
Certain items are sold very cheaply to entice consumers into a shop in order that they pay full price for other items bought.
Product Life cycle
x axis = time
y axis = sales
introduction -> growth -> maturity -> decline
