product Flashcards
product
a good or service that fulfils a customer’s needs and is offered for sale
product portfolio
a mix of products a business produces and sells
brand
- an identity that customers can recognise
- a name that can help differentiate from competitors
brand advantages
- create customer loyalty
- separate product from competitors
- increase business value
brand disadvantages
- high advertising cost
- invites competition
- loss of brand value can affect all products
USP
when a product has features that separate itself from competitors
differentiation
making products different from competition
=> eco-packaging (rem beauty)
=> different looks (sheglam blush)
=> quality (rare beauty blush)
product life cycle
represents different stages in the life of a product and the sales achieved
introduction stage
- new to the market
- high costs, negative profits
- advertising is essential
growth stage
- product becoming more known
- sales increase rapidly
- profits low, costs need to be covered
- advertising still essential
maturity stage
- want to maintain this stage
- increase competition
- high profits, sales at peak
- maximised profits
saturation stage
- competitors have similar products
- market is full
- lower prices
- think of extension strategies
decline stage
- sales & profits fall fast
- low advertising
- business focuses on core products
extension strategies
strategies that extend the life of a product that is declining in hopes to reposition the product
=> new features
=> targeting a different market
=> ‘now with’ policy
product life cycle advantages
- determine whether to discontinue or introduce new products
- target markets
- analyse its position in market
product life cycle disadvantages
- not beneficial to all businesses
- market conditions may vary => can’t always learn from old products
Boston matrix
- helps businesses analyse their product portfolio
- divides products in 4 categories => star, cash cow, problem children, dogs
based on market share & growth
star
- high market share and growth
- strong position in portfolio
- high sales, revenue, costs & competition
- can’t support themselves => cash cows fun heavy promotion
*eg. iPhone
cash cow
- high market share, low market growth
- most profitable => low investment
- market leader in industry
- funds stars and problem children
*eg. MacBook
problem children
- low market share, high market growth
- products not selling - beaten by competition
- has potential to be star => enough money & resources
- cash cows fund problem children
*eg. apple pod => 5% MS => home pods have high MG
dogs
- low market share, low market growth
- contribute little => likely to be dropped
- spending money isn’t worth it
*eg. Apple TV => low MS out of big comps
Boston matrix benefits
- simple to use & understand
- design strategies
- manage wide ranges
- allocate resources to right area
Boston matrix limitations
- too simplistic => MS & MG are too narrow => consider other factors
- false assumptions => high MS
