product

Question 1

what is a product portfolio?

Answer 1

A product portfolio is the collection of all the products or services offered by a company

Question 2

advantages of a product portfolio

Answer 2

company can meet the needs and wants of a wide variety of customers
-increase in sales

spreads the risk
-is one product fails the business would be able to survive due to other products

avoids seasonal fluctuations
-the business will have consistent profits through out the year

Question 3

what is the product life cycle

Answer 3

the product life-cycle shows the different stages a new product passes through over time and the sales, profit and costs that can be expected at each stage.

Question 4

what are the 4 stages of the product life cycle

Answer 4

Introduction, Growth, Maturity, Decline

Question 5

describe introduction

Answer 5

the product is launched onto the market
-sales are very low
-costs are very high - advertising and distribution
no profits made yet

Question 6

describe growth

Answer 6

consumers are now more aware of the product leading to….

• rapidly increasing sales
• costs are still relatively high
• product begins to become profitable

Question 7

describe maturity

Answer 7

this is where the product is at the most popular and competitors have launched their version

• sales and profit peak
• costs are low

Question 8

describe decline

Answer 8

the product has been replaced by new products on the market

• sales and profits fall
• costs begin to increase to get rid of stock
• the product eventually becomes obsolete
• the product needs to be changed to leave the market

Question 9

what is a product extension strategy

Answer 9

a business will use extension strategies to revitalise sales of a profit that has gone into the decline stage of the product life-cycle.

Question 10

what are the methods of product extension

Answer 10

improve the product - new features
alter price -make more affordable
change method of advertising - radio to TV
change the use - lucozade
introduce line extensions -different flavours
change the name -opal fruits to star bursts
alter where its sold -online or instore

Question 11

disadvantages of a product portfolio

Answer 11

customers might not like the new product
-this can result in low sales for the business

expensive to design and launch new products
-it can take a while to make a product due to the developing costs

a poor product could damage the image of other products
-this can result in bad publicity for the business