BADM Principles of Marketing: Unit 10

What are the disadvantages of an expansion strategy?

Adding product items or product lines increases costs of inventory, marketing, transportation, storage, and personnel.

Why are product-mix decisions so important?

An appropriate product mix helps a company appeal to a target market, present a consistent image, sustain profitability, and deal with competition.

What is a product item?

Each individual good, service, or idea that a business offers for sale is a product ____

What are the 5 product-mix strategies

Expansion Contradiction Alteration Trading Up Trading Down

Why would a company use a contraction product-mix strategy?

It has lost its appeal to customers. It is no longer appropriate to the company's goals. It is no longer profitable. It conflicts with another product in the mix. Its production has become a problem. It has become a legal liability.

What are the disadvantages of a contraction strategy?

It increases market risk—the fewer products or lines a company has, the greater the financial risk to the company if one of them fails.

What are the disadvantages of an alteration strategy?

Not all products can be altered, or there may be a limit to the ways in which they can be changed.

How do companies classify product lines?

Product class Customer group Distribution method Price and/or quality

What are the disadvantages of a trading-down strategy?

The firm's reputation for high quality may be damaged by the addition of a lower quality item to its product mix.

What is a product mix?

The particular assortment of products a business offers to meet its market's needs and its company's goals is its product ____

Why would a company use a trading-down product-mix strategy?

To attract a new target market To meet the competition

Why would a company use a trading-up product-mix strategy?

To enhance company image To increase sales of the company's other To attract a new target market

Why would a company use an alteration product-mix strategy?

To limit costs To keep up with changing consumer preferences To compete effectively To reach a different target market To reach a larger market To improve products for social good

Why would a company use an expansion product-mix strategy?

To satisfy customers' desire for variety To offer customers complementary products To spread risk over a wider area To appeal to a new market To increase sales and profits To enhance the company's reputation To make more efficient use of company facilities

What are the disadvantages of a trading-up strategy?

While sales may be generated for the new product or line, sales of established products may decline.

What are the four product-mix dimensions

Width Length Depth Consistency

Describe the four product-mix dimensions.

Width This term, also called breadth, refers to the number of product lines a company carries. Length Length refers to the total number of products in the product mix. Depth This term refers the assortment of sizes, colors, flavors, and models offered in a company's product lines. Consistency refers to how closely a company's product lines are related in terms of: - End use - Methods of distribution and production - Target market(s) - Price range

What is a product line?

a group of related product items is the product ____