chapter 12 Flashcards
what is marketing mix
different elements involved in the marketing of a good or service(4Ps)
types of products
1.consumer goods
2.consumer services
3.producer goods
4.producer services
what are consumer goods
goods which are consumed by people
what are consumer services
services provided for people
what are producer goods
goods that are produced for other businesses to use
what are producer services
services that are produced to help other businesses
features of a successful product
1.It satisfies existing needs and wants of the customers
2.It is distinctive from its competitors and stands out
3.it is not too expensive to produce
process of product development
1.generate ideas
2.select the best ideas for further research
3.decide if the company will be able to sell enough of the product
4.develop a prototype
5.test the market
6.full launch
cost of developing a new product
1.market research needs to be carried out to identify customer needs->expensive
2.cost of producing trial product
3.lack of sales if target market is wrong
4.loss of company image if the new product fails to meet customer needs
5.cost of recruiting more specialized workers
6.cost of purchasing new equipment
benefits of developing a new product
1.Can create a Unique Selling Point(competitive advantage)
2.diversification, the business will have a wider range of products, therefore spreading risks
3.attracting different types of customers, therefore increasing sales and spreading risk
what is brand image
an identity given to a product that differentiates it from competitors’ products.
benefits of creating a strong brand image
1.Consumers recognize the firm’s product more easily
2.ability to charge higher prices
3.Easier to launch new products into the market if the brand image is already established
what is brand loyalty
when consumers keep buying from the same brand repeatedly
what is brand name
unique name of a product that distinguishes it from other brands
Why is packaging important?
1.protects the product->make sure product is not damaged by the time it reaches the consumer
2.provides information about the product
3.promotes the brand image of the product
4.eye catching
define product life cycle
the stages a product will pass through from introduction to it’s withdrawal from the market
stages of a product life cycle
1.research and development
2.introduction
3.growth
4.maturity
5.saturation
6.decline
what happens in research and development(plc)
the business is spending money on research and development, but not receiving any revenue from sales
what happens in introduction(plc)
1.product is introduced into the market
2.costs are high due to informative advertising
3.sales are still low and unlikely to make profit
what happens in growth(plc)
1.sales are growing rapidly
2.persuasive advertising is used
3.gain profit, (as cost of research and development is already covered)
4.consumers are aware of the product
what happens in maturity(plc)
1.sales are growing slowly
2.more competition
3.lower price to compete
what happens in saturation(plc)
1.all potential customers have bought the product
2.sales are constant
3.competitive pricing is used
what happens in decline
1.sales are decreasing
2.product is taken out of market or extension strategy is used
3.Profit=total revenue-total cost, profit decreases as total cost increases
define extension strategy
marketing techniques used to extend the maturity stage of a product
what are the different extension strategies
1.Finding new markets for the product
2.new improved version of the product
3.target a new segment
4.change in the packaging