Marketing - 3.3.1 (Product)

Question 1

Benefits of developing new products

Answer 1

• helps expand into new markets
• can fill in gaps in the market
• diversification of the business

Question 2

Costs for developing new products

Answer 2

• cost of market research, trials, waste materials

- loss of company images if product does not meet needs

Question 3

Brand loyalty and image

Answer 3

Brand loyalty: customers buy from same brand every time instead of competitors

Brand image: impression of product held by customers

Advantages of branding:

• easier to launch new products
• can charge higher price

Question 4

5 stages of product life cycle

Answer 4

• development
• introduction
• growth
• maturity
• decline

Question 5

What happens in development?

Answer 5

Research and prototyping

Question 6

What happens in introduction?

Answer 6

Product launched. Informative advertising used to make product known

Question 7

What happens in growth?

Answer 7

Sales increase. Persuasive advertising for brand loyalty. Price lowers as competitors release similar products

Question 8

What happens in maturity?

Answer 8

High competition, lots of advertising to maintain sales

Question 9

What happens in decline?

Answer 9

Few sales, competitors release better products. Product removed, advertising stopped

Question 10

Examples of extension strategies

Answer 10

• New packaging
• Sell into new market
• New advertising methods
• Launch improved version of product

Question 11

Roles of packaging

Answer 11

• Protects product
• Makes product easier to transport
• Promotes product and brand
• Attractive