the marketing mix: product Flashcards
1
Q
characteristics of the correct product
A
- satisfies customer needs and wants
- product quality and characteristics consistent with brand image
- attractive to entice new customers
- priced according to quality, market and brand image
- unique selling point or a feature that differentiates it from other products
- ahead of competition
2
Q
stages of developing product
A
- generate ideas
- select the best ideas for further research
- decide if the company will be able to sell enough to make the product a success
- develop a prototype
- launch the product in one area to test the market
- go for a full launch of the product
3
Q
benefits of new product
A
- allows business to expand into new and existing markets
- diversification allows businesses to spread risk
- unique selling point makes it different from competitors and attracts customers
4
Q
drawbacks of new product
A
- cost of market research and analysis
- cost of prototypes
- decline in company image if product does not meet customer expectations
- lack of sales if wrong target market
5
Q
development stage
A
- market research takes place
- product prototype is developed
- no sales
6
Q
introduction stage
A
- product is launched
- sales will grow slowly as customers not aware of its existence
- no profits yet as costs not covered
- if product branded then price skimming is used to enter market with high price and set brand image
- informative advertising used to inform customers about product features
7
Q
growth stage
A
- sales start to grow very quickly
- prices higher than competitors, as more competitors enter they may reduce prices
- less advertising as consumers more aware and business may want to spend on other newer products
8
Q
maturity stage
A
- sales increase slowly
- competition becomes intense
- profits at highest
- pricing strategies now competitive or promotional
9
Q
saturation stage
A
- sales stabilise at highest point
- lots of competition but no new competition
- falling profits
- high and stable advertising, usually persuasive
- costs reduced to be competitive
10
Q
decline stage
A
- sales of product drop as new product has come along or product has lost its appeal
- product is usually withdrawn from market after some point
- substantial price discounts especially if business intends to adopt extension strategies
11
Q
length of product cycle depends on
A
- exact length of the cycle is unknown
- new developments in technology means cycle ends quickly
- length is affected by type of product and popularity of brand
12
Q
extension strategies examples
A
- introduce variations of the product
- expand into new markets
- establish and launch a new marketing campaign
- make improvements to the existing product
- use additional retail outlets
