Marketing PM3
What are two disadvantages of an expansion product-mix strategy?
Adding product items or product lines increases costs of inventory, marketing, transportation, storage, and personnel If the new products are more complex or sophisticated, the sales staff may re-quire additional training to sell them.
List four benefits an appropriate product mix brings to a business
Helping deal with competition Affecting profitability Helping to present a consistent company image Appealing to the target market
What are two disadvantages of an alteration product-mix strategy?
If a company chooses to alter an entire line at one time, it can be quite expen-sive. If the company decides to alter the line in stages, competitors have a chance to observe the changes and alter their own products accordingly.
What are two disadvantages of a trading-up product-mix strategy?
If the business uses trading up to enhance its image, the business must be careful that present customers are not lost in the process of gaining new ones. While sales may be generated for the new product or line, sales of established products may decline.
Why would a business use a contraction product-mix strategy?
It has lost its appeal to customers. There are few products that satisfy customers indefinitely.
List two advantages of a deep product mix
Meet the needs of a variety of consumers Use a range of prices
What does a product line's width refer to?
Number of product lines a company carries
List two advantages of a shallow product mix
Offers few items within the product line Limiting its product offerings helps a business control costs and ensure a profit
What is a product item
Product items are distinguished by size, style, brand name, price, color, materi-als, or any feature that makes one item different from another. Ex: two-liter bottle of Diet Coke
What does a product line's consistency refer to?
Refers to how closely a company's product lines are related to end use, and methods of distribution and production
What does a product line's depth refer to?
Refers to the number of products and the assortment of sizes, colors, and models offered in a company's product lines.
List two advantages of a narrow product mix
Specialize effectively Produce efficiently
What are two disadvantages of a contraction product-mix strategy?
The fewer products or lines a company has, the greater the financial risk to the company if one of them fails. Competitors may also step in to provide the products and draw away customers.
What are two disadvantages of a trading-down product-mix strategy?
The firm's reputation for high quality may be damaged by the addition of a low-er quality item to its product mix Profits from the cheaper product may be eroded by reduced sales in the more expensive line
What is a product mix
The particular assortment of products a business offers to meet its market's needs and its company's goals
List two advantages of a broad product mix
This provides them with many opportunities to make sales To appeal to customers with a variety of needs
Why would a business use a trading-down product-mix strategy?
To attract a new target market by using trading down, the company is adding products or lines that are less expensive than what it previously offered.
Why would a business use a trading-up product-mix strategy?
To enhance company image
Why would a business use an alteration product-mix strategy?
To limit costs Altering existing products is less expensive than developing a new product and has a greater chance of success.
Why would a business use an expansion product-mix strategy?
To satisfy customers' desire for variety , customers want options. By expanding their product mix, businesses satisfy that desire.
What is a product line?
a group of related product items. The product items in a product line are somewhat like the members of a family in their relationship to each other; they often resemble each other in some way. Ex: Mouthwash/tooth brush