Product Flashcards
What is product
Any goods or service offered for sale to a customer
What is product portfolio
The mix of products a business produces or sells
What does the product portfolio do for a company
1 spreads fix cost
2 allows for greater economies of scale
3 allows targeting of wider markets
4 reduces risk
5 smoothies out overall sales
6 creates opportunities for growth
What is product breadth and depth
breadth is the number of product lines a business produces or retails
Depth is the number of product varieties within each product line
Eg a company like proctor and gamble is made up of 20 brands (depth)- there will be different sizes of Duracell batteries and also sold in different size packs - increasing product portfolio
What is the advantage of product depth
1 increase the number of repeat buyers looking for variations of the product
2 allows targeting of different market niches eg rechargeable
What is a brand
1 name given to a product to help differentiate from other similar products
2 a product consumers rely on for quality value and service
3 involves a distinct identity for a product with which users can identify
4 a name , term, sign, symbol or design which identifies a sellers products. And differentiates them from competitor products
5 a product which can be identified easily by consumers and in their eyes has value, properties or an image that separates it from the competition
Why is marketing often brand driven
to establish a product with a separate identity in the consumers mind, make the product desirable, wanted
What are the advantages of branding
1 create increased consumer loyalty
2 separate the product from the herd
3 increase price inelasticity of demand
4 increase value of the business
5 to ease customer choice
What are the disadvantages of branding
1 high cost of advertising
2 loss of brand value for one product can affect a whole range of similarly branded products
3 brands invite competition
4 high cost of research and development in ensuring the brand continues to develop and lead the market
What is a unique selling point/proposition USP
Product or service has a feature that can be used to separate it from the competition
What is product differentiation
making the product different from the competition
How can product differentiation be achieved
1 methods of promotion - creating a personality for the product
2 packaging - eg ecco
3 form - making it look different from competition
4. Provision of add ones - extended warenty
5 quality and reliability
What are the 5 stages of a products life cycle
1 introduction
2 growth
3 maturity
4 saturation
5 decline
Describe introduction
1 product is new to market
2 is unknown to customer
3 price can be high and sales restricted to early adopters. 4Profit often low as development costs have to be repaid and advertising expense is high
Describe the growth stage
1 Product is becoming more widely known
2advertising tries to strengthen brand and develop image
3 profits may start but advertising is still high
4 prices may fall
Describe maturity stage
1 product range may be extended
2 competition may increase and has to be responded to
3 advertising should be used to firm the image in customers minds
4 sales are at peak
5 profits should be high
Describe the saturation stage
1 few new customers are gained as replacement purchases are the trend
2 business should try to reduce costs so prices can be more flexible
3 battle to survive is beginning
4 profit may begin to decline
Describe the decline stage
1 sales may fall fast and product range may be reduced with business just concentrating on core products
2 advertising costs reduced
3 profits fall
4 prices fall
Which stage does a business try to make the product stay in and why
In the maturity stage as it maximise profits and helps the business get the greatest return on money invested
Describe the straw and fire life cycle of a product
Give examples of such products
1 product does not follow typical life cycle of a product
2 the product quickly moves through all the stages
3 indtoduction is short and market saturation is reached in a matter of months
4 sales are very high and product dominates the market for a short time
Good examples of straw and fire products ate children’s toys eg furies, cabbage patch dolls
What are extension strategies
used to extend the life cycle o the product
When might extension strategies be used
1 when a new product has not been developed to replace an aging one
2 if a product has a declining market share in a growing market
List some extension strategies
1 repositioning the product in the market place
2 relaunching the product aiming at a different segment
3 using now with policy
Give an example of a product that has been transformed because of extension strategy
Lucozade was seen as a drink for poorly children now marketed as a sports drink
