Marketing mix- Product Flashcards
What are the 7 P’s:
Product, Price, Place, Promotion, Physical evidence, Process and People
What is product?
This refers to what the business sells (a good or service)
What are the stages of the product lifecycle?
- Product development
- Introduction
- Growth
- Maturity
- Saturation
- Decline
Product development:
Research and development stage. Prototypes tested and changes made after feedback.
Sales- No sales
Profit- Making a loss due to zero income and costs
Introduction:
Product is launched.
Sales- slow so lots of advertising required
Profits- still a loss due to high promotional costs
Growth:
Product has been on the market for a while, customers fully aware of product
Sales- Rise rapidly
Profits- profits being made due to increase in customer awareness
Maturity:
Product has been on the market for a while, competition growing
Sales- Peak
Profits- reach max and start to fall as the poduct is fully established
Saturation:
Product suffers from too much competition
Sales- begin to fall as competition increases
Profit- fall rapidly
Decline:
Product life is at it’s end, production will stop
Sales- fall rapidly
Profits- continue to fall
What are extension strategies?
When sales begin to fall attempts can be made to tempt customers away from competitorsand back to the product
Extension strategy methods:
- Lower price
- Change place
- Alter promotion
- Develop a variety of products
- Re-brand products
- Change packaging
- Change product use
(use 4 P’s)
What is a product portfolio?
Having a range of products on sale to meet needs of different market segments
Product line:
Having a variety of similar products on sale. This means that the many products will appeal to different markets
Examples of a product line:
Heinz, Starbucks and Nike
Diversified product portfolio:
This is having products across completely different market segments which spreads risk across different markets in case of failure.
Examples of a diversified product line:
Amazon, Virgin, Google and Walt Disney
What is a method to analyse product portfolio?
Boston Matrix
What is market growth?
The percentage of sales in the market that the product makes
What is market share?
The overall potential for sales that the market has as a whole
What are stars?
Successful products with a high market share and high market growth
e.g. Gmail, Youtube
What are impacts of having a star product?
-Lots must be invested on promotion
-High competition
-Market leader
(in growth section of product lifecycle)
What are cash cows?
Well known and established products with high market share and low market growth
e.g. Google search
What are impacts of having a cash cow product?
-Little marketing required
-Lack of competition
-High profits used to fund riskier ventures (dogs and question marks)
(in the maturity section of the product lifecycle)
What are question marks (problem children)?
Products with low market share and high market growth
e.g. Google TV, Google Chrome
What are impacts of having a question mark product?
-High investment can be used due to market potential (money from cash cows)
(in growth in the product lifecycle)
What are Dogs?
Products with low market share and low market growth
e.g. Google self driving cars
What is the impact of having a dog product?
-Dogs adversly affect profits
-Should sell dogs off to earn money
(in decline in the product lifecycle)
What are advantages of having a product portfolio?
- Business spreads risk over different markets
- Meet needs of different markets to appeal to new customers
- Easier to launch new products
- Increases awareness of the brand
- Cash cows can fund new riskier ventures
- Stars allow the business to be a market leader so improves bran image
- Question marks give the business an opportunity to grow and invest
What are disadvantages of having a product portfolio?
- Drained profits for new products with high R&D costs
- High market cost to promotte many products
- Bad publicity of one product may affect the whole portfolio
- Resources assigned to new products may affect the performance of pf existing products
- Dogs may drain the business pof profits unless sold off
