Chapter 7 Flashcards
What are the benefits of having a product portfolio?
To attract new consumers by aiming at a different target market.
To diversify so that if cells of an original product the client increasing sales of a new product might replace it.
To offer a wider range of goods and services to support the original products.
What is a product portfolio/product mix?
The range of products sold by a business, such as Tesco’s portfolio includes groceries, insurance, clothes etc.
What are a few of the problems associated with having a large product mix ?
Name 4
Many managers have to be employed to take decisions about the products. By publicity from one product may harm the company’s whole image.
The cost of developing and selling so many products is high.
Some product may fail if the company has not done sufficient market research.
Product life cycle?
+ name 4 stage
The lifespan of a product recorded in sales from launch to being taken off the market. Launch Growth Maturity Decline
What are extension strategies?
Extension strategies of the steps taken to extend the life cycle of a product
Name 4 different types of extension strategies ?
Updating designs
New advertising campaign
Target new markets with existing product - such as promoting sports clothing as streetwear or selling in foreign markets
New brand image - much has Lucozade
What are pricing decisions based on ?
Nature of the market
Degree of competition
Lost leader pricing
Costs of production
What is competitive pricing
If market is very competitive and if the business still wants to grow by increasing sales set a price for a product based on prices charged by competitors. They may reduce prices or make prices the same as competitors selling very similar products.
Why might a business deliberately set high prices for its products ?
To maintain a high quality brand image
Price skimming
Setting a price at a high-level to create a high-quality and exclusive image and once the product starts to face competition prices can be decreased
Penetration pricing
Setting a price at a low level to gain greater market share once the target is reached prices can then be increased
Competitive pricing
Setting a price for a product based on the prices charged by competitors
Loss leader pricing
Setting a price of certain products below the cost of production hoping to gain profitable sales from another products
The reason for promotion ?
Inform consumers of new products
Creates a brand image and sense of identity
Helps a business to achieve sales growth
Name a few methods of promotion ?
Advertising
Sponsorship
Direct mail
What is promotion ?
All the ways a business communicates to consumers with the aim of selling products
What is direct marketing?
Using direct means to contact consumers to increase sales eg. Email, telemarketing and direct mail
The combination of promotion methods used by a business is known as the ….
Promotional mix
Activities to attract consumer attention to the product increase sales this promotional method is known as…
Sales promotion includes games, competitions and special offers
When selecting what promotional mix to use a business must bare in mind ?
Cost and affordability
Nature if the product
Nature of the market
Competitors promotion
In the marketing mix the place means the …,
Channel of distribution used between the manufacturer and final consumer
Wholesaler?
A wholesaler is the middleman or distribute that buys in bulk hold stocks and sells mainly to retailers and not consumers.
Telesales?
Telesales is selling to the customer through telephone contact alone
Direct marketing through mailshots leading to goods being delivered directly to the customer is called
Mail order
