Chapter 12-Product

Question 1

Are there sales in the introduction stage of the product life-cycle

Answer 1

No

Question 2

Marketing mix
Def.

Answer 2

All activities that go into marketing a product/service
4 P’s: Price,Product,Place,Promotion

Question 3

USP

Answer 3

Unique selling point
Special feature of a product that differentiates it from the products of its competitors

Question 4

Packaging

Answer 4

Physical container/wrapping of product that is used for promotion/selling appeal

Question 5

What are the types of products

Answer 5

Consumer goods
Consumer servies
Producer goods
Producer services

Question 6

What qualities does a successful product have (4)

Answer 6

Satisfies customer needs and wants
Suits brand image
Easy to make+cheap as possible to produce
Right quality+right price

Question 7

Stages/cycle of product development (6)

Answer 7

Generate new ideas
Select best ideas
Is it viable?
Prototype
Launch in test market
Full launch

Question 8

What are the benefits of new products

Answer 8

USP
Expansion into new markets
Expansion into existing markets
Diversification

Question 9

What are the costs of new products (4)

Answer 9

Trial products
Market research
Lack of sales
Loss of company image

Question 10

What is the importance of brand image

Answer 10

Manufacturers generally sell to customers through outlets, so customers need to be able to identify the product(USP helps)

Question 11

Brand name

Answer 11

Unique name of brand that distinguishes it from other brands

Question 12

Brand loyalty

Answer 12

When a customer keeps buying the same brand again instead of the competitors

Question 13

Brand image

Answer 13

Image/identity given to a product which gives it a personality of its own + distinguishes it from other brands

Question 14

What is the role of packaging

Answer 14

To:
Transport
Preserve
Protect
Inform

Question 15

Product life cycle

Answer 15

Describes the stages product will pass through from into to decline

Question 16

Extension strategy

Answer 16

Way of keeping product at its maturity stage and extending the life cycle

Question 17

What are the stages of the product life cycle (6)

Answer 17

Development
Introduction
Growth
Maturity
Saturation
Decline

Question 18

E.g.s of extension strategies (6)

Answer 18

New variations
Sell into new markets/export to new country
Sell through different retail outlets
New/improved version of old product
New ad campaign
Make small changes to design/packaging

Question 19

How do the stages of the product lifestyle affect pricing

Answer 19

For branded products, they will have a high price when introduced
In growth stages prices are relatively higher than competitors
In saturation/maturity price is reduced to stop sales declining and compete with competitors new versions
Substantial discounts are offered in decline stage, especially if the business does not plan to extend its life

Question 20

How do the stages of the product lifestyle affect promotion

Answer 20

Higher at intro stage
Reduced in later stages
Increased if extension strategies are adopted

Question 21

What happens in the introduction stage of the product lifestyle (4)

Answer 21

Sales grow
Price skimming
New developments
No profit

Question 22

Describe the growth stage of the product lifecycle (5)

Answer 22

Rapid
Persuasive advertising - encourages brand loyalty
Prices reduced due to competition
Profits start rolling in
Penetration pricing

Question 23

Describe the maturity stage of the product lifecycle (2)

Answer 23

Sales grow at a slower rate
Promotions start

Question 24

What would you do in the saturation stage of the product life cycle other than extension strategies

Answer 24

Start using promotions such as but 1 get 1 free to get rid of unwanted stock

Question 25

Describe saturation stage of product lifecycle (4)

Answer 25

Sales peak
Sales stabilise
Compétition is real
Have to charge competitive pricing

Question 26

When would you use extension strategies

Answer 26

In the decline stage of the product lifecycle

Question 27

Describe the decline stage of the product life cycle (3)

Answer 27

Sales fall
Product Appeal is lost
Product withdrawn as sales are static, prices reduced until no more profit is jade