2.2

Created by

Sophie Hancox

Cards (97)

what are the three elements in the design mix
function
appearance (aesthetic)
cost
what is function in the design mix
the capabilities of the product - can it perform its intended purpose
when is function the most important part of the design mix
medical equipment functionality takes priority over design as the equipment must perform a specific function
why is ergonomics important in the function of a product
the product must fit the person who will use it
why is usability important in the function of a product
measures how well a person can use a product or website
why is safety important in the function of a product
measures how safe people will be when using a particular product or service
what does reliability mean
how reliable a product is depending on what it is used for
what does aesthetics mean in the design mix
the look, taste or feel of a product and whether the product is stylish, elegant and attractive
what is cost in the design mix
how much it costs to make the product
why is cost important in the design mix
a business should produce a product as cost effectively as possible as it can lead to a competitive advantage
high production costs can lead to a high selling price of a product which may lead to customers not being able to afford the product
why is the cost connected to the nature of the product
if a business has a focus on high quality the production costs will be higher
what is the product life cycle
it maps the stages a product passes through over time and the sales that can be expected from that stage
what are the 5 main stages of a product cycle
development
introduction
growth
maturity
decline
what is the cash flow a business like in the development phase of the product life cycle
no sales are made but there are a lot of business costs (employees, workspace, prototypes, packaging etc.) so cash flow will be negative
what happens at the introduction phase of a product life cycle
product is launched onto the market and sales start to increase but cash flow will likely stay negative as the business will need to do lots of promotion to create product awareness
what happens at the growth phase of the product life cycle
sales will start to rise more rapidly after a successful launch as customers become more familiar with the product and cash flow will start to become positive
what happens at the maturity phase of the product life cycle
sales levels and cash flow are at their highest however growth in sales will start to slow down as the market may become more saturated as more competitors enter the market
what is market saturation
when the volume of a product or service in a marketplace has been maximised
what happens at the decline phase of a product life cycle
sales of product decrease and this may be because the product is outdated and the product may have to be withdrawn
what can a business use to prevent a product going into the decline phase
extension strategies
what are some extension strategies a business may use
increasing promotion through advertising campaigns
targeting a new market segment or market
reducing the price of a product
modifying the product and giving it a USP
refreshing the brand/image of a product
what is product differentiation
making a product different so that it stands out from competitors
how can a product be differentiated
brand image
unique selling point
offering a better location, features, function or design appearance
cheaper selling price
quality
customer service
product range
how can a product be differentiated by brand image
maintaining a good brand image by marketing and advertising as customers will buy products from their favourite brand
how can a product be differentiated by USP
this is a ''secret ingredient' that competitors find hard to copy and therefore makes the business stand out
how can a product be differentiated by location
by having the best location e.g petrol station on a main road
how can product be differentiated by design
design could be differentiated by the packaging or using different materials or stand out design
how can a product be differentiated by customer service
good customer service will make a customer feel appreciated and respected which could lead to repeat customers
how can a product be differentiated by quality
higher quality materials or features that set the business apart from competition
how can a business be differentiated by product range
it meets more customer needs due to lots of choice which appeals to more customers
what is price skimming
when a business sets a high price when a product first enters the market due to it being a technologically superior product or of higher quality
what is penetration pricing
when a business sells a product at a low price and eventually raise the price as this helps the business gain a market share and differentiate their product
what is cost plus pricing
when a business charges for a product the cost it takes to make it plus a percentage on top which is profit
what is competitor pricing
when very similar products are priced very closely to competitors so that customers have to judge a product on non price methods e.g quality or customer service
what is promotional pricing
when a product or service is offered at a lower price for a limited time or when customers are offered a free gift to encourage them to make a purchase
what is economies of scale
a proportionate saving in costs gained by an increased level of production
how has technology influenced pricing
technology advancements means that production processes have become more efficient which means that products can be produced in less time giving a business economies of scale - as the average costs of production fall, the selling price can be lowered for customers
how has competition influenced pricing
if a business is operating in a saturated market where there is lots of choice and not much differentiation then all prices will be similar
how do mass market products influence pricing
similar products which are sold to the mass market will have low prices to encourage sales
how do niche market products influence pricing
unique differentiated products are more likely to be sold for higher or premium prices