Business

Unit 19: The marketing mix: product and packaging
Products can be grouped into 4 different types:

- Consumer goods: Are goods whicha are consumed by people. (food, funiture)

- Consumer services: Services that are produced for peolpe. (education)

- Producers goods: Are goods produced for other businesses to use. (machinery)

- Producers services: Ares services producedto help other businesse. (insurance, advertising agencies)

What has to be taken into account to improve the chances of the successful development of a new product:

- The product should satisfy consumer needs

- Have a good design

- Have something very distinctive compared with competition

- Not too expensive to produce

6 steps to developing a new product:

1.Generate ideas about a new product

2. Further research of best idea

3. Decide if there will be a big enough market for the new product

4. Develop a prototype

5. Test launch in one part of the market

6. Full launch

Brand Name: it is a unique name for a product that makes it different to other brands

Brand loyalty: is when consumers keep buying the same brandagain and again instead of choosing a competitors brand

Brand image: is an image or identity given to a product which gives it a personality of its own and distinguishes it from its competitor’s brand

Risks of launching a new brand:

- That it will not be successful and that the business will lose money

Packaging: Is the phsycical container or wrapping for a product. It is also usedfor promotion and selling appeal.

What has to be taken into account when deciding the packaging for:

- A new toy

o Eye catching

o Safety

o Carries information about the product

- A new chocolate bar

o Protects the product

o Promotes the brand image

o Eye catching

o Carries information about the product

o Pleasing shape

oEasy to handle

Product life cycle: describes the stages a product will pass through from its introduction, through its growth until it is mature and then finally its decline.

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Why some products have much longer life cycle than other:

- The nature of the product (ex: fashion clothes)

- The speed of innovation of new ideas

- Durability of the product leading toearly saturation of the market

How and why might a company change its pricing during the stages of the product life cycle:

Introduction: price skimming (high prices and as few/no competitors)
growth: penetration pricing by competitors generate small reductions in my prices to compete with the products
maturity: competitive pricing/promotional pricing as competition becomes intensesaturation: prices are reduced to compete with existing competitors
decline: price reductions to encourage sales as sales are falling

Unit 20: The marketing mix: price

Demand: where a product is wanted by the consumer and he must be able to pay for the product

Reasons why the demand curve might rise (that moves to the right):

- Rise in the price of substitute products

- Increase indemand due to effective advertising

- The product becomes more fashionable

- Increase in consumer’s income



Supply: As the price goes up, the producer will plan to supply more of the product to the market to take advantage of the higher price.

How market prices are determined: The supply curve and the demand curve must be put together on the same graph. When the curves areplotted on the same graph, the two lines will usually cross. Where they cross is where the demand for the product equals the supply of the product to te market and this will gice the market price.

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What happens to market price when demand curve decreases: (moves to the left)

*Market price falls and sells too.

Elastic demand: it measures the sensitivity of changes in price. If...