PRODUCT BASICS
What is a product?
A good or service that satisfies a customer's need or want.
What does PLC stand for?
Product Life Cycle.
What is a product portfolio?
The different products owned by a business at a certain point in time.
What two factors does the BCG Matrix use to analyze products?
Market share and market growth.
What is the main goal of an extension strategy?
To extend a product's life and maintain or increase sales.
What is the difference between a tangible and an intangible product?
A tangible product is physical, while an intangible product is a service.
Put these stages in order: Growth, Decline, R&D, Maturity, Launch.
R&D → Launch → Growth → Maturity → Decline.
Name two things a product portfolio helps a business control.
Any two: sales revenue, costs, profit or operational risks.
Which BCG category has high market share and high market growth?
Star
During which stages of the PLC are extension strategies usually introduced?
Maturity or early decline.
A company buys machinery to manufacture its products. Is the machinery a consumer or producer product?
A producer product.
During which PLC stage do sales increase, brand recognition grow and distribution channels expand?
Growth.
Why is having only one product risky for a business?
If that product fails, the business depends completely on it.
Which BCG category has high market share but low market growth and generates lots of cash?
Cash Cow.
Name two extension strategies from the presentation.
Any two: price reductions, advertising, redesigning or repackaging.
Fresh flowers, fruit and raw seafood belong to what classification of consumer products?
Consumer perishables.
A product has high sales, significant market share, low investment and highly positive cash flow. What stage is it most likely in?
Maturity.
Why can having products at different stages of the PLC benefit a company?
Successful products can generate money to finance developing products and distribute risk.
A product operates in a rapidly growing market but has a low market share and requires lots of investment. What is it?
Question Mark.
A company changes its product's packaging, colors and materials to change customers' perception of it. Which extension strategy is being used?
Repackaging.
Name the three classifications of consumer products presented and give one characteristic of each.
FMCGs → purchased frequently and usually inexpensive.
Consumer perishables → do not last long.
Consumer durables → last a relatively long time and are purchased less frequently.
A product's sales revenue and profits are falling, advertising is being reduced and cost-cutting has become important. Identify the PLC stage and explain what may eventually happen to the product.
Decline; the product may eventually be withdrawn from the market.
Apple sells iPhones, Macs, Apple Watches, AirPods and iPads. Explain two reasons why this portfolio is safer than depending only on the iPhone.
For example: it reduces dependence on one product, distributes risk, allows successful products to finance others, and helps Apple respond to changes in technology/customer preferences.
Match each PLC stage with its corresponding BCG category: Development/Introduction, Growth, Maturity and Decline.
Development/Introduction → Question Mark
Growth → Star
Maturity → Cash Cow
Decline → Dog
A customer repeatedly buys the same company even though competitors sell similar products, and is willing to pay extra because of its name. Which two aspects of branding does this demonstrate?
Brand loyalty and brand value.