Cambridge IGCSE Business Studies 3.3 Marketing mix

3.3.1 Product

Types of products 

1. Consumer goods – consumed by people (final users of the product)
2. Consumer services – services for people
3. Producer goods – goods produced for other businesses to use (e.g. machines, raw materials)
4. Producer services – Services for other businesses (e.g. Corporate lawyers, business consultants)

What makes a product successful?

• Satisfies consumer needs and wants
• Low production cost to make profit
• Quality of the product that is kept consistent with the product image
• Introduced to the market before competitors
• Unique

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Brand image

Brand name – Unique name of a product that makes it different from other brands

Benefits of branding – Advertising makes consumer aware of the quality of the product and persuades them into buying the product

Brand loyalty – When customers continue buying from the same brand instead of the competitors

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Roles of packaging 

Protection

• Protects the product
• Easy for transportation
• Allows the product to be used easily
• Suitable for the product

Promotes the product

• Attractive and appealing to customers
• Consistent with the brand image of the product (e.g. High end product in a fancy packaging)

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Product life cycle

1. Development – Product is being developed, The business is spending money on research and development. There are no sales at this time.
2. Introduction – Product is introduced onto the market, sales are starting to grow. Informative advertising is used to make consumers aware of the product.
3. Growth – Sales are growing rapidly, Persuasive advertising is used. Prices are reduced as competitors introduce their product to the market. Profits are now being made as the development costs have been covered.
4. Maturity – Sales of the product increases slowly, there is intense competition. Pricing strategies such as competitive or promotional pricing are being used to compete with competitors.
5. Saturation – Sales have reached its highest point. Growth has stopped. Competitive pricing is used.
6. Decline – Sales of the product has started to fall, Eventually, the product will be taken out of the market.

Extending the product life cycle

• Introduce new variations of the original product
• Sell the product into new markets (e.g. distribute to other countries)
• Increase and create new advertising campaigns
• Lower the price
• Make changes to the product (e.g. new packaging)