Unit 5.3 - product

Question 1

Explain the difference between product portfolio and product range.

Answer 1

Product range is the different variations of the same product whereas product portfolio are the different types of products a business sells.

Question 2

Define product differentiation.

Answer 2

Making products stand out from competitors - how is one product different to another.

Question 3

Define unique selling point (USP).

Answer 3

Something that a business does that another business doesn’t to make it stand out from competitors to entice customers to buy the product.

Question 4

Explain the difference between invention and innovation.

Answer 4

Invention is coming up with a completely new idea whereas innovation is making adaptations to an existing idea.

Question 5

Name the features that make a product stand out. (7)

Answer 5

Reliability
Quality
Design
Flavour
Image
Features
Packaging

Question 6

Name the reasons a business sells a wide range of products. (6)

Answer 6

Spread risk
Attract more customers
Keep up with competitors
Provide a competitive advantage
Increase revenue
Increase profit

Question 7

Define brand.

Answer 7

A unique design, sign, symbol, and/or words used in creating a unique image that identifies a product and differentiates it from its competitors.​

Question 8

Name the benefits of a strong brand. (4)

Answer 8

Be trusted more by consumers​
Be products that usually have a high/premium price​
Be products which are unique/differentiated/stand out/recognised​
Have customers that are loyal to the brand who then become repeat purchasers

Question 9

Name the reasons businesses use packaging. (5)

Answer 9

Protection
Storage
To keep product fresh/clean
Provide information
Identify the product from advertising/previous purchase

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Question 10

Name the the different stages of the product lifecycle. (5)

Answer 10

Development (research and development)
Introduction
Growth
Maturity
Decline

Question 11

Define saturation.

Answer 11

Is when a firms sales stop increasing and they don’t attract any new customers.

Question 12

Explain what happens to sales, revenue and costs in the development phase.

Answer 12

Sales are zero
Revenue is zero
Costs are high

Question 13

Explain what happens to sales, revenue and costs in the introduction phase.

Answer 13

Sales are zero or low as customers do not know about the product
Revenue will be low
Costs are high due to promotional expenditure

Question 14

Explain what happens to sales, revenue and costs in the growth phase.

Answer 14

Sales will be rising rapidly as more customers buy the new product
Revenue will increase with sales
Costs are high due to producing more, some promotional costs may still be needed

Question 15

Explain what happens to sales, revenue and costs in the maturity phase.

Answer 15

Sales will be steady and consistent
Revenue is maintained
Costs will continue to be paid to produce the goods

Question 16

Explain what happens to sales, revenue and costs in the decline phase.

Answer 16

Sales fall
Revenue will fall
Costs begin to fall dependent on whether they try to advertise and attract more sales

Question 17

Define extension strategies.

Answer 17

Attempts to maintain the sales of a product and prevent it from entering the decline stage of the product lifecycle