BUSINESS 1.3

• Product + Service Design definition

  Finding the right balance between creating something that people desire to have, that they can afford to buy, and that will reliably work
• Product Design (2)


  • About the product's function, quality, and durability
  • Designing to add value to products
  • Working to a design brief
• Design


  The optimal combination of 3 factors: Aesthetics, Function, and Economic manufacturability
• Product Design Process


  1. Market research on consumer needs

  2. Identify gap in the market

  3. Develop original idea

  4. Design brief

  5. Approach designers

  6. Choose a design

  7. Create models/prototypes

  8. Test with target group

  9. Organise supplies of raw materials

  10. Full scale production
• The 5Rs: Refuse, Reduce, Reuse, Repurpose, Recycle
• Ethical sourcing 


  • Reality of how workers are treated

  •How fair their working conditions/ pay is

  •How the products are made
• Sustainability 


  The purchase you make will not affect long term supplies of the product because it is automatically replenished
• Waste minimisation 


  •made to have minimal waste

  •Production costs kept down

  •Reduced environmental footprint

  •5Rs

  •Disposing of products safely
• Branding


  The act of giving a product or service a distinct identity and personality
• Promotion


  Part of the marketing mix that focuses on persuading people to buy the product
• Branding (2)


  • Establishes a lasting identity in the minds of consumers
  • Can take considerable time and marketing effort •when a brands recognisable consumers are more likely to purchase the product
• When a brand is recognisable

  Consumers are more likely to purchase products if their experience was good
• Branding advantages


  • Enables the business to reduce the amount spent on promotion
  • Customers are more likely to purchase the product again
  • It's easier to persuade retailers to put the product in stores
  • Other products can also be promoted using the same name
• Types of brand


  • Individual brand
  • Corporate brand
  • Brand family
• Individual brand


  • No publicity disasters; if one brand is affected only they will be it also doesn‘t want to be mass seen
• Corporate brand


  • Doesn't want to be mass seen, adds credibility, reassures customers of quality and reliability
• Brand family


  • Adds comforting familiarity and emotional qualities
  • Lots of products from the same company
• Corporate brand


  • Adds its logo to everything as it believes it adds credibility and reassures customers of the quality and reliability
• Strong branding advantages

  • Added value, reassurance and benefits
  • Allows premium charges
  • Reduces price elasticity due to brand loyalty and brand obsession
  • Discounters are strong brands who can hold their prices whilst weak brands lower then
• Viral marketing


  Word of mouth that spreads from person to person about products, particularly encouraged through the internet
• Social media marketing


  Targeting specific people, a more traditional form of targeting between consumer and brand
• Crowdfunding


  People showing their interest in the business to provide funds, companies must decide if it provides enough funds
• Emotional branding


  Creating an emotional connection with the brand, whether through advertising or other means, to engage consumers and make them want to purchase the product
• Promotion


  Part of the marketing mix that informs customers about the product and persuades them to buy it
• Types of promotion


  • Short-term sales promotions
  • Long-term sales promotions
• Persuasive advertising (long-term)

  • Designed to create a distinctive image which isn't confused with other ideas
• Public relations (long-term)

  • The attempt to affect consumers' image of a product without spending on media advertising, including contacting journalists and sponsoring sports or arts
• Buy-one-get-one-free (short-term)

  • A desperate, highly short-sighted way to generate sales that boosts demand but at the cost of running profit margins and undermining brand credibility
• Seasonal price promotion (short-term)

  • A way to boost effective capacity utilization and cash flow after seasonal products are reduced
• Strong branding advantages 


  •Added value

  •Premium charges

  •Reduced price elasticity

  •Discounters
• USP (Building a brand)

  •Product differentiation, no one copies it, often the only difference Is the brand name
• Advertising (Building a brand)

  •creating a bond between customer + brand as well as reinforcing key messages
• sponsorship (Building a brand)

  •An attempt at long term brand building which can give the brand personality
• Digital Media (Building a brand)

  • social media allows advertisers to spend a fixed maximum
• Price Definition


  The amount paid by the customer for a good or service
• Pricing strategy


  The plan for selling a product's price for the medium-long term
• Price (2)


  • Gives indications of a product's quality and its fundamentals to a firm's revenues and profit margins, the main link between customer (demand) and consumer (supply)
• Customer sensitivity to price


  Consumers have an idea of the correct price for a product, balanced with the quality, how much the consumers want the product, and their income
• Price skimming


  1. When the product is innovative with no competition, so price is set high

  2. Firms assess the market's reaction to the product

  3. If sales become stagnant, price is lowered to attract customers unwilling to pay the initial price
• Price penetration


  1. When launching a product into a market with similar products

  2. Price is set lower to gain market share

  3. Price is increased as it's hoped that high levels of created sales will recover development costs and lead to lower average costs as the business can now bulk buy

  4. Hopefully, maintain market dominance