Marketing 2

Question 1

The product life cycle

Demand for a product changes over time

1. development
2. introduction
3. growth
4. maturity
5. decline

Sales and profit during the product life cycle

• development and introduction
• growth and maturity
• decline

Answer 1

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Question 2

Product-product portfolios

Businesses need a variety of products:

• product portfolio=range of different products that a firm sells
• balanced portofolio=large business having products at different stages of the products life-cycle
• they’ll have some products that have reached the peak of their sales-bringing in lots of money with little investment-these are responsible for most of the business’s income
• at some point~products will start to decline and will have to be replaced.So the firm needs to have products in the development and introduction stages that will later grow to maturity and take their place.these products still need lots of investment
• Firms may try to extend the life of products in decline

~firms can take actiom to extend their life
~might decide to use an extension strategy during decline phase of the life cycle

~if extension strategt works,product will make profit for longer

~it means spending more money on the product

~firms have to strike a balancrle between investigating money in supporting old products\designing new ones

Firms may broaden their product portfolios:

1.businesses may be broaden(expand)their portofolios in order to grow/compete with other companies

2.irms may broaden their portfolios by
…adding products to an existing range by developing new products based on their current ones

~increasing their range of products by developing products that are different from their current ones

3. diversification=designing and producing more products
   - This reduces risk that a decline in sales of o

Answer 2

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Question 3

Product-product portfolios

Businesses need a variety of products:

• product portfolio=range of different products that a firm sells
• balanced portofolio=large business having products at different stages of the products life-cycle
• they’ll have some products that have reached the peak of their sales-bringing in lots of money with little investment-these are responsible for most of the business’s income
• at some point~products will start to decline and will have to be replaced.So the firm needs to have products in the development and introduction stages that will later grow to maturity and take their place.these products still need lots of investment
• Firms may try to extend the life of products in decline

~firms can take actiom to extend their life
~might decide to use an extension strategy during decline phase of the life cycle

~if extension strategt works,product will make profit for longer

~it means spending more money on the product

~firms have to strike a balancrle between investigating money in supporting old products\designing new ones

Firms may broaden their product portfolios:

1.businesses may be broaden(expand)their portofolios in order to grow/compete with other companies

2.irms may broaden their portfolios by
…adding products to an existing range by developing new products based on their current ones

~increasing their range of products by developing products that are different from their current ones

3. diversification=designing and producing more products
   - This reduces risk that a decline in sales of of one product will harm the business~meaning that there’s less threat to the firm’s profits

Answer 3

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Question 4

Price-pricing strategies

1. market-led pricing
   - market-led pricing strategy if the price of the products helps consumers decide whether to buy it-which is most of the time

4 different pricing methods:
1.penetration pricing
2.loss leader pricing
3.price skimming
4competetive pricing

~cost-plus pricing
Firms will use this method if they are not in price competition with other producers -though of.course they can still only charge what people are prepared to play
2 main ways:

1) using a a mark up
2) using a profit margin

Answer 4

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Question 5

Promotion

Sales promotion-seven methods

1. discounts
2. product trials
3. free gifts
4. buy one get one free
5. competitions
6. point-of-sale advertising
7. Use of credit

Direct Marketing goes straight to the consumer:
~in direct marketing-business contacts the potential customer directly without going througg otjet media

~customer is invited to make a direct responseto the message-they might want to use their voucher next time they’re at the supermarket

~importany benefit of direct marketing is that a business can measure its success

~problem is that it creates junk mail and spam e-mail

Business can sponsor organisations and events:

Sponsership=businesses sometimes help to pay for events such as sports tournaments/Tv shows/exhibitions-in return it can display its name

1. sport
2. televsion
3. The Arts

Answer 5

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Question 6

Place-where the product is sold

Distrubution channels can be direct/indirect

1.manufacturer-wholesaler-consumer
2manufacturer-wholesaler-retailer-consumer
3.manufacturer-retailer-consumer
4.manufacturer-consumer

Answer 6

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