Product Flashcards
What is product portfolio and its uses?
the mix of products a business sells and produces
-spread risked costs
-greater economies of scale
-targeting of wider markets
-reduces risk
-smooths out overall sales
-creates opportunities for growth
what should the packaging of a product include?
-design, eye catching and to attract customers whilst also being consistent
-connvenient, open easily and to not be too bulky as this can add to distibution costs.
-protection
-information
-environmental, many consumers are now aware, use recylcable materials where possible
-cost, eg cardboard and plastic, most cost suffiecient should be chosen
what are the uses of having a USP?
-justify high prices being charged
-competitve advantage
-attract customers
what is the importnace of branding?
-loyalty from customers, leading to repeat purchases
-products that are recognised are trustworthy
-retailers are more likely to stock branded products
-charge higher prices as they look more premium, so higher profit margin
what are the disadvantages to branding?
-high cost, this can effect business survival as this excess money could be reinvested elsewhere into the business.
-invites competition, gives consumers other choice so there will be decrease in sales revenue
-if one products value drops then the other products the business produces value will also drop effecting the overall sale
what reasons are there that products should be quality?
- repeat purchases wont be made if the quality is poor
-good reputation and word of mouth leads to a greater amount of customers
-retailers wont stock products that arent quality as they are unreliable and will negatively effect their own image for stocking them
-a way to be the best product in the market - higher price can be charged due to the consumer being willing to pay for the product that is quality and worth the money
what reasons are there that are against product quality?
- price has to be set correctly, it cant be too high as consumers wont purchase from your business and go to your competitors instead. If its too low it will poorly effect brand image
-promotion is hard and cannot always reach desired consumers for the quality product that are willing and able to purchase it
what is the 1st stage of the product life cycle and what does it include?
development
- product being made
-costs on market research
-costs on supplies
what is the 2nd stage of the product life cycle and what does it include?
introduction
-product is new to the market
-few customers
-profits are low
-large amounts of advertising
what is the 3rd stage of the product life cycle and what does it include?
growth
-product becomes more widely known
-brand image is developed by advertising
-profits begin to be earned
what is the 4th stage of the product life cycle and what does it include?
maturity
-product range may be extended
-sales are at their peak
-advertising is maintaining the brand image
-profits are high
what is the 5th stage of the product life cycle and what does it include?
saturation
-few customers are gained
-profits start to delicne
-costs are reduced by business to make the prices more flexible
what is the 6th stage of the product life cycle and what does it include?
decline
-product range may be reduced
-core products are focused on
-profits fall
-some stability is maintained if core product is focused on well and continues to gain sales
what is an extension strategy and what does it involve?
to extend a products life cycle
-repositioning of the product in the market
-relaunching a product, e.g.) to a different audience
-‘now with’, e.g. cars ‘now with’ heated seats
-promotions
-price
what is an example of an extension strategy?
lucozade once was a drink for chlidren that were unwell, however now it is a sports drink
