Marketing mix - Product.

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  • Created by: hamishc
  • Created on: 25-04-16 20:57
What are the 3 types of consumer product?
Convenience products, shopping products, speciality products.
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What are convenience products?
Inexpensive, everyday products bought by lots of people, often bought out of habit, e.g. coffee on the way to work, customers don't shop around for cheaper alternatives as not much would be saved.
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What are shopping products?
Bought less regularly, e.g. TV's, washing machines, cloths. They are more expensive and sold in fewer places, people may shop around for quality and price.
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What are speciality products?
Perceived as unique products, e.g. luxury cars, price is not an issue for customers, instead quality and image are most important, this means they can be priced high to gain profits.
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What is product line?
Related products with similar characteristics, uses and target customers.
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What is the product mix?
The combination of all the product lines a business produces.
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What is the Boston matrix?
A comparison of the market growth and market share of different types of products.
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What are question marks?
All new products start like this, they have low market share and high market growth, not yet profitable, could succeed or fail, require heavy marketing, businesses can conduct brand building, harvesting, or divestment.
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What are cash cows?
Have high market share but low market growth. They are in the mature phase. Already promoted, produced in high volumes - keeping costs low, bring in high profits.
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What are stars?
Have high market growth, high market share, in profitable growth phase, they will turn into cash cows, however, competitors are likely to take advantage of this market growth so businesses must spend lots on promoting to maintain market share.
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What are dogs?
Dogs have low market share, and low market growth, mostly a lost cause, business can harvest profits in the short term or sell it off, however, this may upset a still loyal group of customers.
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What are the advantages of the Boston matrix?
Shows where a businesses product is positioned in the market. A products position can affect marketing decisions.
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What are the disadvantages of the Boston matrix?
Can't predict exactly what will happen to a product ( a products profit may be different from what the matrix suggests).
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Why is it important for a business to introduce new products?
They can bring in new customers, they give a competitive advantage, they allow companies to maintain a balanced product portfolio.
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What are the benefits of a product having a USP?
Tangible benefits can be used (low-calorie pizza), intangible benefits can be used (reputation).
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What is the product life cycle?
A chart showing the sales of a product over time.
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What is the use of the product life cycle?
It's valuable for planning marketing strategies and changing the marketing mix. Marketing decisions will be based on where a product is in it's life cycle.
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What is the development stage?
Product research and development takes place along with market research, the costs here are high.
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What is the introduction stage?
The product is launched either in one or several markets. Promotion takes place to build sales. Initial price of the product may be high in order to cover promotional costs. Revenue pays for high fixed costs of development before a profit is made.
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What is the growth stage?
Sales grow fast. There are new customers and repeat customers. Competitors may be attracted to the market. The product may be improved or developed or targeted at a different market segment. Rising sales encourages more outlets to stock the product.
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What is the maturity stage?
Sales reach a peak, whilst profitability increases as fixed costs have been paid for. Sales may begin to drop, prices may be cut to increase demand, however this will affect profits. Not many new customers, however intense competition reduces sales.
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What is the decline stage?
Product doesn't appeal towards customers any-more, sales fall and profits decrease. If this continues, the product is withdrawn or sold to another business (divestment).
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What is the aim of extension strategies?
To prolong the life of the product by changing the marketing mix.
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What are the types of extension strategy?
Product development (business's improve a product), market development (finding a new market or new uses for existing products), distribution change, price change, new promotion.
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What is the marketing mix focus in development?
Product, place.
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What is the marketing mix focus in introduction?
Place, promotion.
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What is the marketing mix focus in growth?
People, physical environment and process.
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What is the marketing mix focus in maturity?
Price and promotion.
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What is the marketing mix focus in decline?
Money spent on marketing mix will decline.
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Other cards in this set

Card 2

Front

What are convenience products?

Back

Inexpensive, everyday products bought by lots of people, often bought out of habit, e.g. coffee on the way to work, customers don't shop around for cheaper alternatives as not much would be saved.

Card 3

Front

What are shopping products?

Back

Preview of the front of card 3

Card 4

Front

What are speciality products?

Back

Preview of the front of card 4

Card 5

Front

What is product line?

Back

Preview of the front of card 5
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