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4 3 Product Outline

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4.3 Product

Key words

Notes

1. Classify products by line range and mix.

Line, mix and range

Product line Product mix Product range The varieties of a particular product The variety of the different product All product lines of a firm's product that serves the same purpose in a lines that a business produces. mix particular market Consumer/Producer Products

Consumer products Producer products Bought by the final uses for their own personal Purchased by businesses, rather than aimed at consumers. consumption. Consumer products

Fast-moving consumer Consumer perishables Consumer durables Speciality consumer goods products Everyday convenience Products that do not last for Products that are Exclusive and very products that are sold in a very long time purchased irregularly expensive product that retail outlets because they tend to last often require a large for a relatively long time amount of commitment in and /or take up a relatively both money and time large proportion of a consumer's income

2. Describe the importance of innovation in an era of rapid technological change and discuss the problems of financing research and development.

New product development (NPD) is the process of getting the latest products onto the market. Vale analysis triangles:

o

These 3 elements are analysed in order to see where and how value can be added to a product

Raise Look at the features of a product that should be improved to exceed industry norms Create Examine the unique features of a product that should be included to outclass rivals Reduce Investigate the features of a product that can and/or should be cut back Eliminate Explore the ways in which certain features of a product can be removed
 Stage of new product development

1. Market research
 Establish where there are gaps in the marketplace that customers want to be filled

2. Product development and testing
 Making prototypes
 Test marketing

3. Feasibility study
 Marketers look into the legal and financial viability of launching the new product
 Cos of production and pricing decision need to be examined to allow the business to forecast profits from launching the new product
 Legal issues considered

4.3 Product

Key words

Notes

4.

Launch
 Enter its introductory state of its PLC
 Sell to customers Sources of new product development

1. Market research
 Refers to the process of businesses collection and analysing relevant data and information to better meed the needs of their customers

2. Production extension
 Refers to the use of existing brands, especially the more successful ones, in order to design and develop new products

3. Research development
 Technological and scientific research helps to generate a flow of new ideas and processes

4. 'Me to' development
 This occurs when businesses rely on other firms to be innovation and then simply copy their ideas legally

3. Analyse the relationship between the product life cycle and the marketing mix, and determine appropriate extension strategies.


1.

2.

3.

4.

Product life cycle (PLC) is the typical process that products go through from their initial design and launch to their decline, and often their death. Different products undergo each of the 6 stages.

Research and development o Designing and testing the product o A prototype produced o Test-marketing
 Trialling a new product with a sample of customers
 Determine reactions of customers and to gather valuable feedback
 Minimize cost & embarrassment if the product is unsuccessful
 Competitors may find out the information of the product o If unsuccessful → change/discontinue o Time-consuming task Launch o Requites careful marketing planning o Sales will be relatively low (low awareness) o High costs (high costs of marketing) o Unprofitable o Aim - get the product to the next stage ASAP o Innovators refers to the customers who tend to buy the product during its launch o Once customers are aware of the new product, the product will head towards its next phase Growth o Sales volume increasing o Wider distribution network o Early adopters (refers to brand awareness and loyalty) o Profit may materialize due to sales revenue rising and the possibility of lower unit costs due to economies of scale in production o Aim to prolong this stage of the life cycle AFAP o Attract rivals Maturity o Sales revenues continue to rise, but at a much slower rate o Likely to have obtained significant market share science sales revenues are at their peak o Economies of scale will give their firm a competitive advantage o Many competitors

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