111 product

Question 1

what is a product

Answer 1

any good or service offered to sale to customers
goods - physical products eg. cars
services - non physical items eg.hairdressers

Question 2

what is product portfolio

Answer 2

the mix of products the business produces and sells

Question 3

reasons for having a product portfolio

Answer 3

• spreads risk -they get enough working capital so they can pay tax/debt-business stays afloat
• allows multiple segments to be targeted -saves money on advertising-offer products that satisfies everyone leading to more sales and maximised profit

Question 4

drawbacks of having a product portfolio

Answer 4

• depends on amount of capital a business has available -because if they don’t have enough working capital, and decide to produce a lot of products , they would be in debt
• depends on actions of competitors -if competitors already have strong brand loyalty in the segments the business is trying to expand into- wasted expenses

Question 5

what is a brand

Answer 5

• a brand is a name , design ext that identifies a good or service as distinct from other goods

Question 6

(+)/(-) of a brand

Answer 6

(+) can increase elasticity of demand-greater control over pricing strategies, increased customer loyalty-good for competitive business , product is more recognised-easier to buy

(-) high cost of advertising- brands must constantly be kept on the consumer’s eye , high cost of research and development-ensures brand continues to develop and lead the market

Question 7

what is a unique selling point

Answer 7

consists of features that can be used to separate the product from the competition

Question 8

what Is differentiation

Answer 8

how the business makes it’s products different from the competition eg. eco-packaging

Question 9

what is the product lifecycle

Answer 9

• represents the different stages in the life of a product and the sales that are achieved at each stage

Question 10

what is an extension strategy

Answer 10

a strategy used to prolong the product life cycle , and prevents products going into decline. includes:
-targeting a new market eg.international
-relaunching product-aiming at different segment -promotion ext

Question 11

evaluate the impact of extension strategies on a business

Answer 11

• brand imagine and awareness continue to be strong as customer needs are being met -> this depends on weather there is still demand for that product , and on competition-if they work quicker than you it won’t be as popular
• sales and profit stay at their peak, these can be reinvested into other areas of the business. -> this depends on the quality of the market research

Question 12

relationship between product life cycle and cash flow

Answer 12

(p84 on component one book)

Question 13

advantages of using the product life cycle

Answer 13

-it helps with planning, marketing managers can check which stage they’re currently in and make changes to their marketing strategies, and helps them manage their product portfolio, know when they need to launch new products as the others go Into decline

-helps managers plan for problems at different stages, by analysing similar products-avoid making mistakes that lead to lower sales

Question 14

disadvantages of using the product life cycle

Answer 14

-a fall in sales might not mean the product is entering decline-other external factors might have caused it

-not every product follows the same pattern

Question 15

what is the Boston Matrix

Answer 15

-helps companies to analyse their products and categorise them -> helps with decisions about promotion or discontinuing
-products are catogised into question marks , cash cows, stars and dogs

Question 16

describe question marks (Boston Matrix)

Answer 16

• low market share but high market growth
  -they gave products in a fast growing market but the products are not selling
  -beaten by competition
  -failing but likely to be worth doing something about it

Question 17

describe dogs (Boston Matrix)

Answer 17

• low market share and low market growth
  -not likely to be worth spending money on redeveloping/ advertising the product
  -dogs may take up too much management time , tie up assets and give low returns

Question 18

describe cash cows (Boston Maxtrix)

Answer 18

• high market share but low market growth
  -very profitable products and spending on things like advertising is low
  -customers know and understand the product, brand value has been established
  -likely redevelopment costs have been regained, increasing profitability more
  Eg.Kellogg’s Corn flakes

Question 19

describe stars (Boston Maxtrix)

Answer 19

• high market share and high market growth
  -new customers are attracted to the marketplace
  -high competition-businesses are fighting for a share of large profits
  -high levels of revenue but high costs eg.adverting

Question 20

decision making when using the Boston matrix

Answer 20

• stars - high competition -> have to rebrand/adapt product so It has a USP
• cash cow -making product accessible-> little promotion is needed , product is most popular so it needs to be easy to buy
• question mark - investing in promotion/production/adapting product -> market is growing quickly and potential profit is high but product is not as popular as it should be
• dog -discontinue/ monitor very closely to sure they’re not making a loss

Question 21

(+)/(-) of boston matrix

Answer 21

(+) maximise profits as products keep getting adapted , analyses they have the portfolio they want and weather it matches the objectives of the organisation, helps make better decisions

(-) too vague , expensive to do and conduct , doesn’t take into account PESTLE factors