product

• what is the definition of a product portfolio

  A product portfolio is the mix of products the business produces and sells.
• describe the product portfolio ?

  • Product portfolio analysis looks at the range of products and brands that a firm has under its control
  • A businesses product range is called its product portfolio
  • This type of analysis can help a firm identify where every single one of its products is positioned in the market
• what is breadth and depth relating to products ?

  Breadth is the number of product lines a business produces or retails – 20 brands  Depth is the number of product varieties within each product line – varieties within each brand.
• key points of branding of a product ?

  • Marketing is often brand driven – the objective is to establish a product with a separate identity in consumers’ minds, making the product desirable
  • Brands are important for customers because they represent attributes, values, benefits and personality.
  • Brands can offer long-term profitability to businesses, offering a degree of predictability to sales and revenues.
  • Brands do not just happen – they must be developed carefully, and when mature, the development must continue so that full long-term value is extracted from the brand.
• corporate branding

  it attaches a perception and promise to the goods and services associated with that brand e.g. quality, customer service, corporate culture
• personal branding

  when a person brands themselves e.g. a sports personality or pop star
• geographical branding

  when a region, city, county or country creates a brand that epitomises the people and the lifestyle of that country, often used in tourism
• added value

  • Branding can add value to a product allowing firms to charge higher prices.
  • Added value is the difference between the selling price and the cost of the raw materials
• how can you increase added value

  • changing packaging
  • changing ingredients
  • changing availability
  • improving customer service
• disadvantages of branding

  • High cost of advertising – brands must constantly be kept in the consumer’s eye. 
  • Loss of brand value for one product can affect a whole range of similarly branded products. 
  • Brands invite competition – often from copycat manufacturers. 
  • High cost of research and development in ensuring that the brand continues to develop and lead the market.
• advantages of branding

  • To create increased consumer loyalty – this is important when competition is intense. 
  • To separate the product from the herd – especially in markets where there is otherwise little differentiation and products are marked by their similarities rather than their differences. 
• advantages of branding (2)

  • To increase price inelasticity of demand – this gives greater control over pricing strategies. 
  • To increase value of the business – brand values are often higher than other asset values of a business. 
  • To ease customer choice – brand identity makes recognition of products easier, making purchase more likely.
• branding - To create increased consumer loyalty

  This will encourage repeat purchasing and is important when competition is intense.
• branding - To separate the product from the herd

  Especially in markets where there is otherwise little differentiation and products are marked by their similarities rather than their differences.
• branding - To increase price inelasticity of demand

  This gives greater control over pricing strategies as demand will not fall significantly when the price is raised.
• branding - To increase value of the business

  Brand identity makes recognition of products easier, making purchase more likely. It will help to differentiate products from those of competitors.
• branding - To ease customer choice

  Brand identity makes recognition of products easier, making purchase more likely. Retailers will be more willing to stock and sell the branded products.
• branding disadvantages - High cost of advertising

  Brands must constantly be kept in the consumer’s eye. 
• branding disadvantages - Brands invite competition

  This often comes from copycat manufacturers and can cause customers to switch loyalty.
• branding disadvantages - High cost of research and development

  This is needed to ensure that the brand continues to develop and lead the market
• unique selling point

  A feature of a product or service that differentiates it from others and persuades people to buy it.
• definition of product differentiation

  Making a product stand out from those of competitors.
• how can we get product differentiation

  • A USP
  • Changing consumer perceptions via advertising
  • Pricing strategies
  • Changing to eco packaging 
  • Quality and reliability
• what makes a product attractive ?

  • reliability – is it fit for the purpose for which it was designed and does it do the job well?
  • quality – is the product top of the range or budget? 
  • design – how does the product look, its size, colour, weight and shape? 
  • flavour – how does the product taste? 
  • image – the product needs to create its own identity 
  • features – what can the product do? 
  • packaging - shape, size and design
• how is right product benefit a business ?

  • Sufficient demand
  • Ability to meet customer needs
  • Correct brand image
  • USP/ differentiation
• how can the right product benefit the customers ?

  • Satisfy needs
  • Safe and fit for purpose
• how can the right product benefit the employees ?

  • Skills to make the product/provide service
  • Crucial to business survival and therefore job security
• how can the right product benefit the investors ?

  • Sufficient sales to achieve return on investment
  • Good reputation
• describe the purposes of marketing ?

  • Researching the market: Gathering and analyzing information on consumers’ needs and wants.
  • Analyzing the market: Examining market conditions like growth and competitors.
  • Setting marketing goals: Establishing long-term strategy and measuring performance.
  • Developing a marketing strategy: Utilizing the marketing mix to achieve marketing objectives.
  • Gaining more customers/sales: Aiming to increase market share and brand loyalty.
• what is the definition of product life cycle ?

  A diagram that tracks sales over time from the development stage of a product through launch and until it is removed from the market.
• what are the five stages of a product life cycle

  1. Development
  2. Introduction/Launch
  3. Growth
  4. Maturity
  5. Saturation
  6. Decline

  7. Withdrawal
• what happens in the development stage of the product life cycle ?

  • New ideas/possible inventions
  • Market analysis – is it wanted? Can it be produced at a profit? Who is it likely to be aimed at?
  • Product Development and refinement
  • Test Marketing – possibly local/regional
  • Analysis of test marketing results and amendment of product/production process
  • Preparations for launch – publicity, marketing campaign
• what happens in the introduction stage of the product life cycle ?

  • Advertising and promotion campaigns
  • Target campaign at specific audience? 
  • Monitor initial sales
  • Maximise publicity
  • High cost/low sales
  • Length of time – type of product
• what happens in the growth stage of the product life cycle ?

  • increased consumer awareness
  • Sales rise
  • Revenues increase
  • Costs - fixed costs/variable costs, profits may be made
  • Monitor market – competitors reaction?
• what happens in the maturity stage of the product life cycle ?

  • Sales reach peak
  • Cost of supporting the 
  • product declines
  • Ratio of revenue to cost high
  • Sales growth likely to be low
  • Market share may be high
  • Competition likely to be greater
  • Price elasticity of demand?
  • Monitor market – changes/amendments/new strategies?
• what happens in the saturation stage of the product life cycle ?

  • New entrants likely to mean market is ‘flooded’
  • Necessity to develop new strategies becomes more pressing
  • Searching out new markets:
  • Developing new uses
  • Focus on adapting the product
  • Re-packaging or format
  • Improving the standard or quality
  • Developing the product range
• what happens in the decline stage of the product life cycle ?

  • Product outlives / outgrows its usefulness / value
  • Fashions change
  • Technology changes
  • Sales decline
  • Cost of supporting starts to rise too far
  • Decision to withdraw may be dependent on availability of new products and whether fashions/trends will come around again?
• definition of extension strategy ?

  Tactics to prolong the life of a product once it enters the maturity or decline stage of it’s product life cycle
• what are some extension strategies ?

  • rebranding
  • improved quality
  • Advertising – try to gain a new audience or remind the current audience
  • Price reduction – more attractive to customers
  • Adding value – add new features to the current product, e.g. improving the specifications on a smartphone
  • Explore new markets – selling the product into new geographical areas or creating a version targeted at different segments

  New packaging – brightening up old packaging or subtle changes
• benefits of products life cycle ?

  • For a large company, with many products and it will help businesses to manage their product portfolio. 
  • It helps businesses to identify when they need to launch new products as older ones go in decline. 
  • It helps identify when extension strategies may be needed
  • It may help identify other marketing strategies that can be used to support the stages life cycle,
  • It may help identify financial requirements e.g. at the R & D stage or to develop new flavours or packaging.