Product Flashcards
what is the product
what your business is going to sell (good or service)
what makes a product successful
first one to be introduced
satisfies existing wants of customers
not too expensive to produce, able to make profit
has a unique selling point
capable of stimulating new wants in customers
what is the product life cycle
stages of a products life. some products have a short life cycle, with some having longer cycles
when does a business use the product life cycle
determine the future of their products
decide when to introduce new products
decide when to withdraw products in decline
decide which products to invest in
what are the stages of the product life cycle
product development
introduction
growth
maturity
saturation
decline
extension strategies
what is the product development stage
before a product is released, it goes through development. process of innovation known as Research and Development
what is the processes of Research and Development
generate the idea
test the idea
create prototype
prototype tested on marked
modifications made
product launch
what is the introduction stage
product is new to market. product not yet profitable at current stage. advertising & promotion heavily used to inform customers
what are the finances of the introduction stage
low sales, high costs
little or no profit/losses
what is the growth stage
product is becoming more established and customer awareness growing. competitors may enter market at this stage
what are the finances of the growth stage
sales grow rapidly
profits start to increase
what is the maturity stage
product well established. sales reach peak and advertising used to prop up sales. competition also reached peak, which drives down price of the product
what are the finances of the maturity stage
high sales, high profits
price lowering to keep up with competition
what is the saturation stage
sales reached limit, profits fall due to lowered prices. as more competitors enter maket, becomes saturated. some competitors forced out market
what are the finances at the saturation stage
high profits but starting to decrease
what is the decline stage
product no longer fashionable. sales fall, advertising stops, prices drop as no longer profitable to produce the product
what are the finances at the decline stage
profits fall eventually becoming losses
what are product extension strategies
elements of marketing mix can be changed to inject new life into a product. can extend growth period, or even halt its decline
what are some examples of product extension strategies
changing the product (size, colour, packaging)
altering the distribution (moving to online)
changing the price/pricing strategy
using promotional campaigns (buy one get one free)
what is the product portfolio of a business
the range of products an organisation produces. range of products usually under same brand name, but can move into different product ranges
what are the advantages of having a varied product portfolio
increased profit by selling a range of products
brand awareness increases
easier to launch new products
what are the disadvantages of having a varied product portfolio
advertising costs higher to ensure customers know about product
R&D costly to maintain variety of products
if one product under brand name has problem, can affect whole portfolio
what is the product line portfolio
when one product success is then used to introduce “spin-off” products. tend to be in same market
what is a diversified product portfolio
allows organisations to “test the water” in other markets that are seperate from their core original business
