Product

Question 1

What is a product?

Answer 1

A product is a good or a service that is sold to customers or other businesses.

Question 2

How is product differentiation created?

Answer 2

• Establishing a strong brand image (personality) for a good or service.
• Making clear the unique selling point (USP) of a good or service, for example, by using the tag line quality items for less than a pound for a chain of discount shops.
• Offering a better location, features, functions, design, appearance or selling price than rival products.

Question 3

What are the challenges for a business about product?

Answer 3

• making products different from competitors

- ensuring that customers recognise that the product is different

Question 4

How can you differentiate a product?

Answer 4

• distinctive design
• branding
• performance

Question 5

What is a product range?

Answer 5

Product range is a collection of similar products offered by the same business.

Question 6

What is a help spread risk?

Answer 6

A help spread risk is a decline in one product that may be offset by sales of other products.

Question 7

What is branding?

Answer 7

• product with a unique character, design or image
• consistent and well recognised
• helps consumers believe that it is a quality good or service they are being offered.

Question 8

What are the benefits of branding?

Answer 8

• inspires customer loyalty leading to repeat sales
• can charge higher prices, especially if brand is market leader
• retailers or service sellers want to stock brands

Question 9

What are own label brands?

Answer 9

Own label brands are retailers which uses its own name on a product rather than manufacturers.

Question 10

Why is packaging used?

Answer 10

• protection of contents
• distribution to customer
• selling
• customer convenience - e.g multi-pack

Question 11

What is the role that packaging plays “in selling”?

Answer 11

• if a product cannot be differentiated by it’s features or designs, then packaging becomes really important.
• it helps to advertise and promote brand image.
• help maintain quality standards.
• designed to encourage impulse buying.
• packaging also needs to appeal to the distributors.

Question 12

What are the 4 stages of the Product Life Cycle?

Answer 12

• Launch
• Growth
• Maturity
• Decline

Question 13

What happens at the development and launch stage?

Answer 13

• lots of advertising to make people aware of the product
• sales are low
• price of product is often high
• company should usually expect low profits

Question 14

What happens at the growth stage?

Answer 14

• more customers as brand loyalty is established
• sales rising
• higher profits

Question 15

What happens at the maturity and saturation stage?

Answer 15

• sales have peaked
• most profitable stage
• competitors may have bought out similar products
• market could be saturated

Question 16

What happens at the decline stage?

Answer 16

• due to actions of competitors, changes in fashion/taste or technology
• sales fall and eventually product is taken off shelves

Question 17

Identify 2 ways in which businesses prevent their product from going into decline:

Answer 17

• making it more appealing to their customers by doing things such as changing the packaging - modifying it
• releasing extensions to go with the product
• new uses for the same product