Product - Marketing Flashcards
What is a product?
A product is a good or a service that is sold to customers or other businesses. Customers buy a product to meet a need.
What are the stages of the development of a new product?
- Idea generation– Research and Development (R and D) departments try to innovative and design products that are new or better than existing ones.
- Development– Businesses aim to have an innovation in their new product that they can point to as a
USP. A good example of a product developed with a highly marketable USP was the first bagless vacuum cleaner. - Prototypes and testing– Prototypes are made and then undergo tests to ensure the product is safe, reliable, fit for purpose and one that customers can and will use.
- Modifications– After seeing the prototype or early versions in use, alterations can be made to improve the product.
- Patents and copyrights– Some products are registered for patents to protect the design from imitation by competitors.
- Launch to market– Finally the product is put into production and a marketing and advertising campaign is launched to introduce and sell the product to customers.
What are the 4 stages of the product life cycle?
• Introduction
• Growth
• Maturity
• Decline
What is involved in the introduction stage?
• The product is first launched onto the market.
• Sales are low and slow as very few consumers are aware of the product.
• Heavy advertising will be required to make consumers aware of the product.
• Most products make a loss due to low sales and high advertising costs.
What is involved in the growth stage?
• Sales begin to rise quickly as more consumers become aware of the product and have been
persuaded to buy it.
• Heavy advertising is still required.
• Most products begin to become profitable by the end of this stage.
What is involved in the maturity stage?
• The product has been on the market for a while and has an established customer base.
• Sales of the product reach their peak.
• As the product is now well established, less advertising is required.
• Due to high sales and a reduction in advertising costs, profits will reach their peak.
What is involved in the decline stage?
• Sales of the product fall quickly as the product has been on the market for a long time and newer products have been released which consumers are buying instead.
• Profits also fall due to decreasing sales. The business will withdraw the product from the market before it starts to become unprofitable.
What are the advantages of branding?
• consumers tend to perceive branded goods as being of higher quality;
• customers will become brand loyal, meaning that they will only buy that brand;
• customers are often willing to pay a higher price for branded goods;
• costs and risks of launching a new product are reduced as consumers are already aware of
the brand.
What are the disadvantages of branding?
• establishing a brand can be a very expensive and time-consuming process;
• the entire brand could be damaged by one poor product in the range;
• branding goods makes them easy to copy for counterfeiters
What is packaging needed for?
• protecting products from being damaged during transportation;
• helping to keep products fresh;
• providing legally required information, e.g. nutrition
As well as the practical uses for packaging, businesses will also use packaging to help in the
marketing of the product:
• packaging will be designed to reflect product branding, e.g. choice of colours and fonts;
• packaging will be designed to appeal to the target market, e.g. choice of images and materials.
