Product Flashcards

All 17 cards in this deck

What are the three elements of the design mix?

Function, aesthetics and cost.

In the design mix, what does 'function' mean?

How well the product works and does the job it was designed to do.

In the design mix, what does 'aesthetics' mean?

How the product appeals to the senses — how it looks, feels, sounds or smells.

Name the four phases of the product life cycle in order.

Introduction, growth, maturity, decline.

What is an extension strategy?

An action taken to lengthen the life of a product and stop it going into decline.

Give two extension strategies a business could use.

Any two of: reduce the price, target a new market segment, add extra features to the product, sell it in new places/on new platforms, advertise more.

What is product differentiation?

Making a product or service stand out as different from those of rivals. It allows the product to stand out in a crowded market.

Give one drawback to a business of differentiating its product.

Variable costs may rise, so profit per product sold falls; or differentiation is expensive, so cash outflows rise and cash flow worsens.

True or false? In the design mix, 'cost' means the price the customer pays for the product.

False. Cost is what it costs the business to design and make the product; the price charged is part of the marketing mix, not the design mix.

True or false? Extension strategies are normally introduced when a product is in the introduction phase.

False. They are used when sales start to fall at maturity or decline, to extend the product's life cycle.

What does the product life cycle show?

How a product's sales change over time as it moves through the stages of its life, from launch to withdrawal.

What happens in the introduction phase of the product life cycle?

The product is first put on sale. Sales are low, so the business uses promotion to make customers aware of it and get them to try it.

What happens in the growth phase of the product life cycle?

Sales rise quickly as more customers buy the product, and it may start to make a profit.

What happens in the maturity phase of the product life cycle?

Sales growth slows and sales level off at their peak. Most potential customers already have the product and rivals compete hard, so the business relies on repeat purchases and customer loyalty.

What happens in the decline phase of the product life cycle?

Sales fall, often because the product has become out of date or rivals offer something better, until the business withdraws it.

Why can improving a product's function or aesthetics be a problem for the design mix?

Better features or a more attractive design usually raise the cost of making the product, so the business has to balance them against cost to keep it profitable.

Give one benefit to a business of differentiating its product.

Any one of: it gives the product a USP so it stands out from rivals; it can be aimed at a particular market segment; customers may be willing to pay a higher price.