chapter 12

Question 1

what is marketing mix

Answer 1

different elements involved in the marketing of a good or service(4Ps)

Question 2

types of products

Answer 2

1.consumer goods
2.consumer services
3.producer goods
4.producer services

Question 3

what are consumer goods

Answer 3

goods which are consumed by people

Question 4

what are consumer services

Answer 4

services provided for people

Question 5

what are producer goods

Answer 5

goods that are produced for other businesses to use

Question 6

what are producer services

Answer 6

services that are produced to help other businesses

Question 7

features of a successful product

Answer 7

1.It satisfies existing needs and wants of the customers
2.It is distinctive from its competitors and stands out
3.it is not too expensive to produce

Question 8

process of product development

Answer 8

1.generate ideas
2.select the best ideas for further research
3.decide if the company will be able to sell enough of the product
4.develop a prototype
5.test the market
6.full launch

Question 9

cost of developing a new product

Answer 9

1.market research needs to be carried out to identify customer needs->expensive
2.cost of producing trial product
3.lack of sales if target market is wrong
4.loss of company image if the new product fails to meet customer needs
5.cost of recruiting more specialized workers
6.cost of purchasing new equipment

Question 10

benefits of developing a new product

Answer 10

1.Can create a Unique Selling Point(competitive advantage)
2.diversification, the business will have a wider range of products, therefore spreading risks
3.attracting different types of customers, therefore increasing sales and spreading risk

Question 11

what is brand image

Answer 11

an identity given to a product that differentiates it from competitors’ products.

Question 12

benefits of creating a strong brand image

Answer 12

1.Consumers recognize the firm’s product more easily
2.ability to charge higher prices
3.Easier to launch new products into the market if the brand image is already established

Question 13

what is brand loyalty

Answer 13

when consumers keep buying from the same brand repeatedly

Question 14

what is brand name

Answer 14

unique name of a product that distinguishes it from other brands

Question 15

Why is packaging important?

Answer 15

1.protects the product->make sure product is not damaged by the time it reaches the consumer
2.provides information about the product
3.promotes the brand image of the product
4.eye catching

Question 16

define product life cycle

Answer 16

the stages a product will pass through from introduction to it’s withdrawal from the market

Question 17

stages of a product life cycle

Answer 17

1.research and development
2.introduction
3.growth
4.maturity
5.saturation
6.decline

Question 18

what happens in research and development(plc)

Answer 18

the business is spending money on research and development, but not receiving any revenue from sales

Question 19

what happens in introduction(plc)

Answer 19

1.product is introduced into the market
2.costs are high due to informative advertising
3.sales are still low and unlikely to make profit

Question 20

what happens in growth(plc)

Answer 20

1.sales are growing rapidly
2.persuasive advertising is used
3.gain profit, (as cost of research and development is already covered)
4.consumers are aware of the product

Question 21

what happens in maturity(plc)

Answer 21

1.sales are growing slowly
2.more competition
3.lower price to compete

Question 22

what happens in saturation(plc)

Answer 22

1.all potential customers have bought the product
2.sales are constant
3.competitive pricing is used

Question 23

what happens in decline

Answer 23

1.sales are decreasing
2.product is taken out of market or extension strategy is used
3.Profit=total revenue-total cost, profit decreases as total cost increases

Question 24

define extension strategy

Answer 24

marketing techniques used to extend the maturity stage of a product

Question 25

what are the different extension strategies

Answer 25

1.Finding new markets for the product
2.new improved version of the product
3.target a new segment
4.change in the packaging