Identifying and understanding customer needs and wants. Businesses can then provide products and services that meet these needs profitably.
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Product trial
When consumers buy a product for the first time to assess whether or not they want to buy it again. If this is successful it could lead to repeat purchases and customer loyalty.
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Boston Matrix
A model which analyses a product portfolio according to the growth of the whole market.
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Brand
A named product which customers see as being different from other products.
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Marketing mix
Selling the right product at the right price with the right promotion in the right place.
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Cost-plus pricing
Adding a percentage profit to the actual costs. Advantage - it ensures a profit is made. Disadvantage - The product may not sell if it is too highly priced.
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Competition pricing
Setting your prices similar to those of your competitors. Advantage - The prices will be competitive. Disadvantage - The price may not be profitable.
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Penetration pricing
Starting with low prices to attract customers. Advantage - It attracts customers, more sales. Disadvantage - It is only an introductory price, it can't last forever.
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Skimming
Selling products at a high prices because they are unique products. E.g. a new console. Advantage - It generates a high profit. Disadvantage - It only lasts while there is no competition.
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Promotional pricing
A special price for a limited time. Advantage - It is useful if you want to get rid of old stock. Disadvantage - You can only use this for a limited period of time.
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R&D
Continuous innovation is known as R&D (Research and Development).
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Design mix
The three areas to considered when designing a product: aesthetics (look, feel, smell); function (does it work, fit its purpose) and economic (made quickly and efficiently).
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Stock
Stock is the physical product a company buys, creates or sells.
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Stock control chart
A stock control chart manages stock levels so that a business has enough stock to meet demands efficiently.
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Maximum stock level
The maximum amount of stock a business can hold.
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Minimum stock level/buffer level
The minimum amount of stock a business can hold. Production would stop if stock levels fell below the minimum stock level.
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Re-order level
The level when a new order has to be placed.
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Lead time
The difference between the order being placed and the order arriving.
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Production
The process of using resources so that you add value to the product or service, to meet the needs of the customer.
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Product differentiation
Making a product or service stand out from others.
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Brand extension
When a business uses a brand name on a new product that has some of the brand's charateristics. E.g. Mars bars and Mars ice cream
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Brand stretching
When a brand name is used for a diverse range of products, not necessarily connected. E.g. Marks and Spencers - clothes range and food
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Job production
A method of production which involves making the whole product from start to finish, one unit at a time. E.g. bespoke products
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Batch production
Items are produced in batches or stages. They undergo one operation before they move on to the next. E.g. bread
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Flow/mass production
Continuous production of large quantities of items. They are usually produced on a production line. E.g. cars
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Just-in-time production
A method used by businesses to control stock by keeping stock levels at the bare minimum and ordering stock just before it is used.
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Other cards in this set
Card 2
Front
When consumers buy a product for the first time to assess whether or not they want to buy it again. If this is successful it could lead to repeat purchases and customer loyalty.
Back
Product trial
Card 3
Front
A model which analyses a product portfolio according to the growth of the whole market.
Back
Card 4
Front
A named product which customers see as being different from other products.
Back
Card 5
Front
Selling the right product at the right price with the right promotion in the right place.
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