Ch 12 - product Flashcards
Characteristics of a successful product
Shouldn’t be difficult/expensive to produce.
The quality of the product should be appropriate for the brand image
The product should be unique or have a unique feature.
The product needs to satisfy consumer wants and needs.
Benefits of creating a new product
if the product has a USP - can lead to more market share in new or existing markets.
Allows business to diversify
What is a USP
Unique selling point, a special feature of a product that differentiates itself from the products of competitors.
Costs of creating a new product
Market research cost
Trial costs
If the target market is wrong then wont make much money
Company image may take a hit if product fails to satisfy customer needs and meet expectations
Imp of branding
Influences the public perception of a firm and its products
People may purchase the brand and the lifestyle along with the product
Stages of product life cycle
Development Introduction Growth Maturity Saturation Decline
What is the development stage
sales at this stage
The product is developed. Prototype is created and market research is carried out before product is launched.
No sales
What is the introduction stage
Initial launch of product in the market.
Consumers are discovering the product
Almost no sales
What is the growth stage
Stage at which sales grow rapidly, profits grow rapidly
Business can cover the cost of development and production now
Use more informative advertisements since customers are finding out about the product.
Competition starts to enter the market
What is the maturity phase
Sales will grow at a slower pace now. By now there's a lot of competition Competitive or promotional pricing is used Profits are at their peak Informative advertising is used
What is the saturation phase
Sales stabilize at their highest point.
What is the decline phase
Sales start to reduce
Product has lost its appeal and is withdrawn from the market
What is an extension strategy
Way of keeping a product at the maturity stage and extended in the product life cycle
Some extension strategies
Introduce new variations of the same product
Small changes in colour, design, packaging
Sell through additional, different retail outlets
Sell into new markets
Introduce a new and improved version of the same product
Use a new ad campaign
