Unit 4.5 !!! Price and Product Flashcards
Define marketing mix
The key decisions that a firm takes in order to persuade consumers to buy their good or service
Product
Price
Promotion
Place
Define product life cycle
The stages that a product (G or S) goes through from launch to decline in terms of sales revenue
Product life cycle graph
What are the stages of the product life cycle
- Research and development high costs
- Introduction high costs as lots of promotion is needed
- Growth Profit can start to be made
- Maturity high but flat sales
- Decline sales and profit fall
Define extension strategies
Marketing strategies that prolong the maturity stage of the product life cycle
What are some examples of extension strategies
New version of the production - e.g. iPhone X
Adding features – e.g. better camera on smartphone
Redesign - special editions, special features
Reduce price on older models
Repackaging – update design
New markets
New models
More frequent use - e.g. “Got Milk”
Pros and cons of extension strategies
Pros of using extension strategies
Should be guaranteed increased revenue in the future - e.g. new Star Wars movies
No need to create a new product
Relatively simple - change packaging, new name etc
Cons of using extension strategies
Costs involved - e.g. designing new product design
Consumers may see through the strategy - may be seen as a brand without new ideas
At some point, you have to let the product decline and die
The relationship between the product life cycle, investment, profit and cash flow
What are the four sectors of the BCG matrix
Question marks High market growth, Low market share
Star High market growth, high market share
Cash Cow Low market growth, high market share
Dog Low market growth, Low market share
Importance of packaging
Protection E.g. Milk E.g. Apples
Attracting customers
Design, colors etc.
Differentiation and branding To stand out.
Information Usage, ingredients, warnings
Help distribution and shelf placement E.g. boxes
Define brand
Logo, Name, Image that differentiates one producer from another
Creates a perception in the mind of consumers
Define brand awareness
Extent to which a product is recognized by potential customers
Define Brand Development
How infiltrated the brand is in the market, usually per 1000 people e.g. 100 in every 1,000 of the population buy the brand then 10%
Define brand loyalty
Faithfulness of customers to a brand Shown by repeat purchases
Define brand value/equity
When customers pay a premium for a brand
Amount the price is above the price for a non-branded product
E.g. non-branded trainers = $30 Your brand trainers = $90
BCG Matrix
