Product Flashcards

All 6 cards in this deck

What are the three elements of the design mix?

Function, aesthetics and cost.

True or false? Improving a product's aesthetics has no effect on its cost.

False. Better materials and styling usually raise costs, so a business must balance function, aesthetics and cost for its target market.

Name the phases of the product life cycle in order.

Research and development, introduction, growth, maturity, decline.

In the introduction phase of the product life cycle, what happens to sales, costs and cash?

Sales are low and grow slowly, costs are high because of development and promotion, so cash flow is usually negative.

What is an extension strategy?

A method used to lengthen the life of a product and delay decline, e.g. new packaging, advertising, a price reduction, a new version or selling in a new market.

Give two reasons why differentiating a product or service is important to a business.

It allows the product to stand out in a crowded market, and more customers may choose the business over rivals, increasing market share and revenue.