Marketing Mix- Product

Question 1

What are the 4 types of products?

Answer 1

Durable
Non durable
Convenience
Specialist

Question 2

What is a product portfolio? What does a wide one allow?

Answer 2

All the goods and services a business produces and sells
Wide one allows to
spread risks
Spread fixed costs
Exploit economies of scale

Question 3

What is product breadth and product depth?

Answer 3

Breadth
Number of brands a business produces
Depth
Number of variations of the branded products

Question 4

What is branding?

Answer 4

Brand is a name,term,symbol and design that allows customers to easily identify the goods and services and differentiate them from competitors.

Brand represents quality, reliability and safety

There is a psychological reassurance that product will be good

Question 5

Advantages of branding

Answer 5

-Strong brand carries association with good quality
-makes product stand out in highly competitive market
- customer willing to pay higher prices

Question 6

Disadvantages of branding

Answer 6

-high cost of advertising to begin branding
-high cost of research and development for the brand to continue
- loss of brand value for one product can affect the rest

Question 7

What is a USP?

Answer 7

A feature of products that separates them from other products on the market
Can be result of technological advantage

Question 8

What is product differentiation?

Answer 8

It’s how a firm separates the firms brand from competitors brand
Products might be similar but can be perceived differently by:
- methods of promotion
- packaging
- design
- add one
- quality and reliability

Question 9

Advantages of new products

Answer 9

-brings in new customers
-if product reflects current trends, existing customers can be kept
- more variation

Question 10

Factors effecting the success of a products depend on… (AO4)

Answer 10

-level of competition
-finance available
-strength of usp
-price

Question 11

What is a product life cycle?

Answer 11

Shows different stages a product passes through and the sales expected at each stage

Question 12

What are the stages of a product life cycle?

Answer 12

1) Introduction stage
- product new to market
-low sales
-few customers
-high production and marketing cost

2) growth stage
-product becoming more widely known
-sales increasing
-customers increasing
-price may fall

3) maturity stage
-product range maybe extended
-sales a peak
-competition increase
-high profits

4) saturation stage
-few to no new customers gained
-aim to reduce cost
-profit may start to decline

5) decline stage
-sales fall fast
-advertising cost will be reduced
-overall profits fall
-price likely to fall

Question 13

What is a FAD product life cycle?

Answer 13

Very short period between introduction stage and decline stage
Eg. Pokémon and fidget spinners

Question 14

What is a extended product life cycle?

Answer 14

Products that remain in maturity phase

Question 15

What are some extension strategies for products?

Answer 15

-new packaging
-price reduction
-advertising/promotion
-add new features
-re launching product at different market

Question 16

Relationship of each stage and cash flow (AO3)

Answer 16

Intro phase
- negative cash flow
-high outflows
-no profit generated

Growth phase
-cash flows often still negative
-slowly going to positive

Maturity phase
-cash flow at its highest point (outflows more than inflows)
- less expenditure

Saturation phase and decline phase
-cash flow declines

Question 17

Disadvantages of extension strategies (AO4)

Answer 17

-time consuming
-costly

Question 18

Advantages of product life cycle

Answer 18

-revenue that a product might earn
-identifies when a business should start launching new products
-identifies when to implement extension strategies
- identify when spending is required

Question 19

Disadvantages of products life cycle

Answer 19

-cannot be used reliably to predict the future
-it should not be used as the only tool

Question 20

What is the Boston matrix?

Answer 20

Types of products are distribute into 4 groups which identify the level of sales in relation to the market share

Question 21

What are the 4 areas of the Boston matrix?

Answer 21

1) question marks
-low market share
-rapid growing sales
-cash flow is negative
-id successful, can be stars, if not then dogs

2) stars
-leader in high growing market
-product is relatively strong
-cash flow neutral or moderately positive

3) dogs
-low share
-low sales
Product have either failed or at decline phase

4) cash cows
-dominant share of slow growing market
-maturity stage
-little potential for growth
-large positive cash flow

Question 22

Advantages of Boston matrix

Answer 22

-very simple, easy to explain
-easy to construct
-clear guidance as to what needs ti be done

Question 23

disadvantages of Boston matrix

Answer 23

-only snapshot of current position
-based off assumptions
-names can be misleading> dogs is good for niche markets but considered bad overall