Unit 4.5a 7ps of marketing mix: product

Question 1

A brand

Answer 1

A brand refers to a name that is identifiable with a product of a particular business.

Question 2

Brand awareness

Answer 2

Brand awareness measures the extent to which people recognize a particular brand.

Question 3

Brand development

Answer 3

Brand development refers to the ongoing and long-term marketing process of improving and enlarging the brand name in order to boost sales revenue and market share.

Question 4

Brand loyalty

Answer 4

Brand loyalty occurs when customers buy the same brand of a product repeatedly over time.

Question 5

Brand switching

Answer 5

Brand switching occurs when consumers turn to alternative brands mainly because the original brand has lost some of its former appeal.

Question 6

Brand value

Answer 6

Brand value refers to the premium that customers are willing to pay for a brand name over and above the value of the product itself.

Question 7

Branding

Answer 7

Branding refers to the practice of using an exclusive name, symbol or design to identify a specific product or organization.

Question 8

Consumer goods

Answer 8

Consumer goods are products bought for personal consumption, such as furniture, computers and fresh flowers.

Question 9

Customer loyalty schemes

Answer 9

Customer loyalty schemes are a form of sales promotion used to entice customers to stick to the brand by rewarding devoted
customers.

Question 10

Extension strategies

Answer 10

Extension strategies are attempts by marketers to lengthen the life cycle of a particular product, typically used during the maturity or early decline stages of the product’s life cycle.

Question 11

Genericised brands

Answer 11

Genericised brands are so popular that they become, synonymous with the name of the product itself.

Question 12

Global brands

Answer 12

Global brands are highly popular products sold with exactly the same (or very similar) marketing strategies in overseas markets, using the same brand name in different countries.

Question 13

Innovators

Answer 13

Innovators are consumers who strive to be the first to own a certain product, usually due to prestige or loyalty to a particular brand or product.

Question 14

Logos

Answer 14

Logos are a form of branding that uses a visual symbol to represent a business, its brands or its products.

Question 15

Marketing myopia

Answer 15

Marketing myopia exists when a business becomes complacent about its product strategy, thereby failing to keep up with market changes.

Question 16

A multi-brand strategy

Answer 16

A multi-brand strategy involves a business developing two or more brands in the same product category.

Question 17

Producer goods

Answer 17

Producer goods are products purchased for commercial (business) use, rather than for private consumption.

Question 18

Product

Answer 18

Product refers to any physical or non-physical item (good or service) that is purchased by commercial or private customers.

Question 19

Product cannibalization

Answer 19

Product cannibalization occurs when brands from the same business directly compete with each other.

Question 20

Product differentiation

Answer 20

Product differentiation refers to any strategy used to make a product appear to be distinct from others, such as quality, branding and packaging.

Question 21

The product life cycle

Answer 21

The product life cycle refers to the typical process that products go through from their initial design and launch to their eventual decline and withdrawal at varying speeds.

Question 22

Product portfolio

Answer 22

Product portfolio refers to the collection of products owned by an organization at any one point in time.

Question 23

A prototype

Answer 23

A prototype is a trial product, produced to assess the potential success of the product.

Question 24

Slogans

Answer 24

Slogans are catchphrases used to represent the essence of a business or its products in a memorable way.

Question 25

Tangible products

Answer 25

Tangible products are physical goods, such as cars, computers and smartphones.

Question 26

Test marketing

Answer 26

Test marketing is the trialling a new product with a sample of customers, perhaps in a limited geographical area, to determine the reactions of customers and to gather valuable feedback before a full launch.

Question 27

A trademark

Answer 27

A trademark gives legal protection to the owner to have exclusive use of the brand name.

Question 28

stages of product life cycle

Answer 28

• research and development
• launch/introduction
• growth
• maturity
• decline

Question 29

the boston consulting group matrix

Answer 29

helps managers build a balanced product portfolio

• cash cow
• question mark
• dog
• stars

Question 30

Dogs

Answer 30

Dogs are products with low market share operating in a low growth market.

These products do not generate much cash for the business because the market is stagnant or in decline, so businesses may need to use extension strategies or withdraw such products from the market.

Question 31

Question marks

Answer 31

Question marks are products that operate in a high market growth sector but have low market share.

These products need additional marketing funding to increase market share. Question marks are the main consumers of cash, so it is not always clear just how much a business should or can afford to invest in these products.

Question 32

Stars

Answer 32

Stars are products that operate in high growth markets and have high market share.

They generate high amounts of cash for a business. Hence, marketing activities aim to develop and promote stars. The cash generated from stars can be used to turn some of the question marks into stars.

Question 33

Cash cows

Answer 33

Cash cows are products with high market share operating in a low-growth (mature) market.

Such products are very well established, thereby generating large amounts of cash and of profits. However, some cash cows run the risk of becoming dogs, so businesses may need to use extension strategies to prolong their high earning potential.

Question 34

extension strategies

Answer 34

• price reductions
• advertising
• redesigning
• repackaging
• new markets
• brand extension
• product differentiation
• change brand name
• repsoition the product

Question 35

reasearch and development

Answer 35

The R&D stage of a product’s life cycle involves designing and testing the product. For most products, this is a time-consuming phase. A prototype (trial product) is often produced along with detailed market research to assess the potential success of the product. Test marketing will usually take place. This involves trialling a new product with a sample of customers, perhaps in a limited geographical area, to determine the reactions of customers and to gather valuable feedback.

Question 36

introduction/ launch

Answer 36

The launch stage of the PLC requires careful marketing planning. Sales will be relatively low as customers are not fully aware of the product’s existence. However, costs are very high due to the expenses involved in the launch phase, such as the costs of publicity, promotion and distribution. Hence, the product is unprofitable at this stage of its PLC and the business may face cash flow issues.
Therefore, it is important that marketing managers get the product to the next stage in the PLC as soon as possible.

Question 37

growth

Answer 37

This stage of a product’s life cycle sees sales revenue increasing. Growth is partly due to the business using wider channels of distribution to get the product to different customers in numerous locations . Brand awareness and the influx of customers at this stage of the PLC, known as the early adopters, also help to boost sales and cash flow.

Question 38

maturity

Answer 38

During the maturity stage of a product’s life cycle, sales revenues continue to rise but at a much slower rate. The business may have obtained significant market share as sales revenues are at their peak. Cash flow and profits will be favourable due to the vast number of customers (called the early majority). Economies of scale will give the organization a competitive advantage, although there are likely to be many rivals in the market at this stage.

Question 39

decline

Answer 39

Decline is the final stage of the PLC (before its withdrawal or ‘death’ happens). During decline, sales and profit of the product fall and cash flow is less favourable. This could be due to lower customer demand, caused by changing fashion and tastes as well as new replacement models being available on the market, thus making the existing product obsolete. Customers at this last stage of the product life cycle are called laggards.