Marketing Mix: Product Flashcards
How do new products come about?
Technological developments, response to competitors, identify a gap in the market.
Give three reasons why it’s worthwhile for a business to make new products?
Gain new customers, gain a competitive advantage, maintain a balanced product portfolio.
What are the three types of new product?
Innovative - (completely original and should be patented, needs R&D)
Imitative - (copy innovative products)
Replacement - (new products replacing old ones, better versions)
What are the two different types of USP?
Tangible and intangible.
Give an example of a tangible USP
Low calorie meals, high interest savings accounts, energy efficient fridges.
Give an example of a intangible USP
A new lipstick that ‘makes you look cool’, cars that are perceived as reliable.
What are the 5 stages of product development?
Ideas stage, screening stage, product development stage, value analysis, testing.
What are the five different sections of the product life cycle?
Development, introduction, growth, maturity, decline.
Why are costs high in the development stage?
There aren’t any sales yet to cover costs.
What happens in the development stage?
R&D
Where does promotion rely heavily?
In the introduction stage.
What is called in the introduction stage when the initial price of the product/service is high to cover promotional costs?
Skimming.
What is it called when prices start off low to encourage sales? (Introduction stage)
Penetration pricing.
Where do sales reach there peak?
Maturity stage.
In what stage will competitors be most attracted to the market you are in?
Growth stage.
In what stages is there a high failure rate?
Development and decline.
In what stage do sales fall rapidly and profits decrease.
Decline
What happens if sales carry on falling in the decline stage?
The product is withdrawn or sold to another business.
What are extension strategies?
Extension strategies try to prolong the life of a product by changing the marketing mix.
Name three extension strategies
Product development - improving, reformulating or redesigning a product.
Market development - finding new markets or new users for existing products.
Change the way a product is distributed - internet etc
Change pricing,
Change promotion
At what three parts of the product life cycle should cash flow be expected to be negative
Development, introduction, decline.
At what two parts of the cash flow should you expect to see a positive cash flow?
Growth and maturity.
