Marketing Mix- Product Flashcards
What are the 4 types of products?
Durable
Non durable
Convenience
Specialist
What is a product portfolio? What does a wide one allow?
All the goods and services a business produces and sells
Wide one allows to
spread risks
Spread fixed costs
Exploit economies of scale
What is product breadth and product depth?
Breadth
Number of brands a business produces
Depth
Number of variations of the branded products
What is branding?
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
Advantages of branding
-Strong brand carries association with good quality
-makes product stand out in highly competitive market
- customer willing to pay higher prices
Disadvantages of branding
-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
What is a USP?
A feature of products that separates them from other products on the market
Can be result of technological advantage
What is product differentiation?
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
Advantages of new products
-brings in new customers
-if product reflects current trends, existing customers can be kept
- more variation
Factors effecting the success of a products depend on… (AO4)
-level of competition
-finance available
-strength of usp
-price
What is a product life cycle?
Shows different stages a product passes through and the sales expected at each stage
What are the stages of a product life cycle?
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
What is a FAD product life cycle?
Very short period between introduction stage and decline stage
Eg. Pokémon and fidget spinners
What is a extended product life cycle?
Products that remain in maturity phase
What are some extension strategies for products?
-new packaging
-price reduction
-advertising/promotion
-add new features
-re launching product at different market
Relationship of each stage and cash flow (AO3)
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
Disadvantages of extension strategies (AO4)
-time consuming
-costly
Advantages of product life cycle
-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
Disadvantages of products life cycle
-cannot be used reliably to predict the future
-it should not be used as the only tool
What is the Boston matrix?
Types of products are distribute into 4 groups which identify the level of sales in relation to the market share
What are the 4 areas of the Boston matrix?
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
Advantages of Boston matrix
-very simple, easy to explain
-easy to construct
-clear guidance as to what needs ti be done
disadvantages of Boston matrix
-only snapshot of current position
-based off assumptions
-names can be misleading> dogs is good for niche markets but considered bad overall
