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Business Theme 1 > Product > Flashcards

Product Flashcards

1
Q

Product Life Cycle

A

j

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2
Q

Boston Matrix
>This model is used to assess all of the products sold within a business.
>The model requires the company to have sales + Market share information about their products

A

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3
Q

Boston Matrix Essay Points

A

> Too many stars will cost too much money to bring new products through
Too many problem children may require a significant amount of effort to win a sufficient share.
Too many cash cows don’t let the business flourish
Dogs are often popular among small businesses

  • Need a balance of each category
  • Doesn’t consider future possible changes in the market
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4
Q

Product Design Matrix

A recognised method for assessing the balance of - Cost, Aesthetics and Function

A

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5
Q

Marketing Mix - Price

Market forces = Supply and Demand

A

A market is where a buyer and a seller come together and a transaction takes place.

A seller wants to sell its product at the highest price possible.

A consumer wants to pay the lowest price for a product.

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6
Q

Factors of supply

A 
>Availability of materials
>Availability of money
>Availability of people with skills 
>Competition
>Laws
>Freak weather - changes in climate
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7
Q

Supply

A

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8
Q

Supply

A

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9
Q

Factors of Demand

A

> Income - The amount of money a person earns
Fashion and taste - changing trends in clothes
Advertising - Ads can effect demand
Complements - Products that go together
Substitutes - Products that can replace one another
Laws - Changes in law makes products more or less accessible

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10
Q

Demand

A

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11
Q

The Supply and Demand Model

This shows the interaction between suppliers and customers.

The point where they cross is called equilibrium.

A

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12
Q

Price Elasticity of Demand - A method that allows price sensitivity to be measured

%change in quantity demanded / %change in price = Price Elasticity of Demand

PED is always negative however this is ignored and figure is taken as positive.

A

> If the figure gained is lower than 1 demand price is inelastic meaning demand is not significantly effected by change in price.

> If the figure is above 1 demand price is elastic meaning demand would be effected by change in price.

> If the figure is equal to 1 this is unitary Elasticity of demand and only happens at equilibrium.

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13
Q

Factors that Influence PED

A

> Availability of substitutes
Luxury vs essential goods
Proportion of a persons expenditure
Time and habit consumption

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14
Q

Pricing strategies - Cost based

A

Cost based:
>Quick and easy to use popular among small businesses
>Basic not sensitive to customer needs
>Costs are too high and % mark up is to high leads to a price that is too high.

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15
Q

Pricing strategies - Market based

> Uses methods more sensitive to customers, prices appear more appealing to customers, several methods.

A

Penetration:
>Begin with low prices to foothold the market, as custom increases so does price.

Physiological:
>Used to give the impression of getting a cheaper product, £1.99, 99p, £399.99

Skimming / Creaming
>Maximise sales revenue, price begins high reducing over time.

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16
Q

Pricing strategies - Competition Based

A

> Used by those in competitive and sensitive markets

3 main methods:
>Going rate - what’s the unusual price in the market
>Predatory - Use lower pricing to attack rivals
>Discriminatory - Prices set based on customer profile.

17
Q

Marketing Mix - Place

Placement can be seen as the channels of distribution for a companies products. Placement can look at different levels of distribution.

A

1) The types of outlets or channels - shops or internet sites
2) Merchandising - Organisation of products
3) Alternative methods - Postal, Online, Delivery

18
Q

Marketing Mix - Promotion

Promotion is used to persuade customers to buy a product, methods of this change rapidly. Commonly associated with advertising.

A 
Types of Promotion:
>Persuasive advertising
>Public relations 
>Offers 
>Seasonal price promotion
>Viral / social media marketing 
>Branding

Business Theme 1 (5 decks)

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