Topic 12 - Product

Question 1

Extension Strategies

Answer 1

• Lowering the price of the product
• Changing the place the product is sold
• Altering the methods of promotion
• Developing variations of the product
• Rebranding the product
• Changing the packaging
• Changing the use of the product

Question 2

Boston Matrix

Answer 2

Stars:
- Products that have a high market share in a high growth market
- Can help business become market leader
- Need constant investment
- Will decline into cash cows or question marks over time

Cash Cows:
-Products that have a high market share in a low growth market
- Can generate funds to strengthen stars or improve question marks
- Require little marketing expense due to lack of competition

Question Marks:
- Products that have a low market share in a high growth market
- Can be invested in due to position in a promising market
- Need development of a strong marketing mix

Dogs:
-Products with a low market share in a low growth market
- May adversely affect profits
-Should be sold

Question 3

Product Portfolio

Answer 3

Having a variety of similar products on sale.

Advantages:
- Can spread risk
- Can target different market segments
- New products can replace those at the end of their life cycle
- Increases awareness
- Easier to launch new products

Disadvantages:
- Expensive to research and develop so many products
- High marketing costs
- Bad publicity surrounding one product may affect the rest of the portfolio
- Resources assigned to new products may affect the performance of existing ones