Marketing- Product Flashcards
USP( unique selling point)
A point of difference between the businesses products and their competitors
E.g. dyson container instead of bag
Explain how and why a USP is used by a business
- To attract customers in a competitive market
- to charge a higher price
What is meant by a ‘brand’ and ‘branding’?
Recognisable
Colours, slogans,logos
E.g. Tesco every little helps
Product life cycle definition
A theoretical model which describes the stages that a product goes through over time
Product life cycle includes:
Intro- researching, developing and launching the product
Growth- when sales are increasing at the fastest rate
Maturity- sales are near their highest but the rate of growth is slowing down.» saturation- new competitors enter the market
Decline- final stage where demand falls. Sales drop off
Using the 4Ps in each stage of the cycle
Introduction:
Sales will be initially low
Promotion will be heavy( informative style)
Pricing strategy-> penetration pricing
Implications on finance department-> cash flow issue
Using the 4Ps in each stage of the cycle
Growth:
Sales are increasing quickly Competitors become interested High promotional spending continues Changes to the product More distribution of the product
Using the 4Ps in each stage of the cycle
Maturity:
Weaker rivals will leave the market
Competitive pricing might be adopted
Further improvements to the product
Cash flow is likely to be positive
Using the 4Ps in each stage of the cycle
Decline:
Prices are dramatically reduced
Try to gain a new audience (advertising)
Adding value- add new features to the current product
Enforce new markets- selling the product into new geographical areas
Pros of the product life cycle
- Helps with planning marketing
- Helps managers avoid pitfalls of the different stages
- Managers can compare products at similar stages in the cycle, and they can spot trends before they occur, so they can prepare for Ito
Cons of product life cycle
-Too clean a picture-> sometimes a product may never go beyond the intro stage, or it may enter decline
-too rigid in strategies
Self-fulfilling-> when a products in decline managers might decide to discontinue the product because it is seen as a protocol. Meanwhile it may just be that the economy is in recession. Sales will lift overtime
Product portfolio analysis definition
Where a business compares its different products on a product positioning chart
Product portfolio definition
Many businesses have a range of products. This collection of products is often referred to as the product portfolio
Why would FORD want to ensure that it has multiple products on sale within the market?
- to increase sales
- to meet the needs of multiple groups of customers
- to compete with rivals
- to reduce risk
- to increase visibility and therefore enhance recognition of the brand
Boston matrix definition
A business with a range of products in their portfolio must decide how to allocate investment across it. This decision can be made by using the Boston matrix. This categorises the products into one of four different areas, based on market share and market growth
