WEILAI Online Academic assistant
WEILAI Online Academic assistant
Back to 课程

Business AS CIE

0% Complete
0/0 Steps
  1. enterprise as
    6 主题
  2. business-structure as
    6 主题
  3. size-of-business as
    3 主题
  4. business-objectives as
    3 主题
  5. stakeholders-in-a-business as
    2 主题
  6. human-resource-management as
    8 主题
  7. motivation as
    4 主题
  8. management as
    2 主题
  9. the-nature-of-marketing as
    7 主题
  10. market-research as
    3 主题
  11. the-marketing-mix as
    6 主题
  12. the-nature-of-operations as
    3 主题
  13. inventory-management as
    2 主题
  14. capacity-utilisation-and-outsourcing as
    1 主题
  15. business-finance as
    2 主题
  16. sources-of-finance as
    3 主题
  17. forecasting-and-managing-cash-flows as
    1 主题
  18. costs as
    4 主题
  19. budgets as
    1 主题
  1. Business AS CIE
  2. the-marketing-mix as
  3. the-marketing-mix marketing-mix-product
课 11, 主题 2
In Progress

the-marketing-mix marketing-mix-product

课 Progress
0% Complete

Exam code:9609

Goods and services

  • Goods are physical, tangible items that can be touched, stored and owned

    • They are usually produced, then sold, and can be taken home or delivered

      • Examples include a loaf of bread, a car or a pair of shoes

  • Services are non-physical, intangible activities provided by people or businesses

    • They are usually performed at the time of purchase, and cannot be touched or stored

      • Examples include a haircut, a taxi ride or legal advice

  • In many situations, when a customer buys a product, they are also receiving a service as part of the overall experience

    • This is because businesses want to provide value beyond the physical item and improve customer satisfaction and loyalty

Case Study

Buying a new car – product and services combined

A woman hands car keys to a couple standing in front of a red car. The man embraces the woman, who reaches to accept the keys.

Priya and Henry decide to buy a brand-new electric car from a local dealership

The car itself is a tangible product, as it is a physical item they can see, test and drive away

However, their purchase also includes several services provided by the dealer to enhance their experience

  • Test drive and personalised advice

    • A salesperson offers Priya and Henry a free test drive and gives them advice on which model suits their needs based on their lifestyle and budget.

  • Finance and insurance assistance

    • The dealership helps them set up a car loan and offers optional car insurance plans

  • Free servicing for 12 months

    • As part of the deal, Priya and Henry receive a 12-month free servicing package, including checks and minor repairs

  • Home Delivery

    • Once the paperwork is complete, the car is delivered directly to their home

  • Customer support and warranty

    • They receive a 5-year warranty and access to customer support in case they need help with features or maintenance

Tangible and intangible product attributes

  • When a customer buys a product, they are influenced by both tangible and intangible attributes

    • These are the features that affect how the product looks, feels, performs or is experienced

Tangible and intangible attributes of a pair of trainers

Diagram of a shoe split into tangible (size, design, etc.) and intangible (brand reputation, image, etc.) factors, highlighting product attributes.
A pair of trainers has a range of tangible and non-tangible attributes that affect a customer’s decision to buy

Tangible attributes

  • These are the physical features of a product that can be touched, seen, or measured

  • They include things like size, colour, design, packaging, materials, and weight

  • Customers can compare tangible features before buying

    • E.g. When buying a pair of running shoes, the tangible attributes include the shape, colour, sole type, weight and material used

    • The customer can try them on and feel the comfort and fit

Intangible attributes

  • These are non-physical features that relate to the experience or perception of the product

  • They include things like brand reputation, warranty, customer service, image and emotional value

  • These features are often the reason a customer chooses one brand over another, even if the tangible features are similar

    • E.g. The same running shoes may come with a trusted brand name, a 12-month warranty, and a ‘satisfaction guarantee’

    • The buyer may also feel a sense of pride or motivation wearing a well-known performance brand

The importance of product development

  • Product development is the process of creating and launching new goods or services

    • It can help a business grow, stay competitive and meet changing customer needs

    • Without developing new products, a business risks becoming outdated or losing its market share

Why product development is important

  • Responding to changing customer needs

    • Customers’ tastes, preferences, and lifestyles change over time

    • Developing new products helps businesses stay relevant and meet these new demands

  • Staying ahead of competitors

    • By launching innovative or improved products, businesses can attract new customers and keep existing ones from switching to rivals

      • E.g. A tech company that releases a new smartphone with unique features may gain an advantage over competitors

  • Increasing sales and market share

    • New products can generate excitement, attract more attention, and increase overall sales

    • They may also open up opportunities to reach new market segments

  • Extending the product life cycle

    • As older products reach the end of their life cycle, new products can replace them and keep the brand fresh and active in the market

  • Taking advantage of new technology

    • Businesses can use advances in technology to improve performance, design, or sustainability, which can make their products more attractive

      • E.g. A home appliance company might develop smart, energy-efficient models to appeal to eco-conscious consumers

Costs of new product development

Cost

Explanation

Market research collection and analysis can be time-consuming and expensive

  • Before launching a new product, businesses often need to carry out detailed research to understand customer needs, competitor activity and market trends

Investment in research, development, and design is often very costly

  • Developing a successful product may require expert staff such as engineers or designers, as well as specialised equipment or software

The cost of producing trial products can be significant

  • Creating prototypes or test versions often results in waste, especially if expensive or unusual materials and components are used

  • Early versions may need several changes before being finalised

There may be low sales if the product does not meet market expectations

  • If the business targets the wrong customer group or develops a product that fails to solve a real need, it may sell poorly, resulting in lost revenue after a major investment

A failed product can damage the brand and other products in the range

  • If customers are disappointed with a new product, it can affect their trust in the brand as a whole, leading to reduced sales of existing, successful products

Product differentiation

  • Differentiation is where a business distinguishes its products from those of competitors

    • This involves creating functions or features of the product (or firm) which help it to stand out from its competitors

    • Strong product differentiation helps the firm to develop its competitive advantage

Methods of differentiation

  •  Successful business or product differentiation helps the business to increase demand for its products, increase brand loyalty, and allow the business to charge higher prices

Flowchart showing methods of differentiation: marketing, packaging, functions, customisation, and customer service, branching from a central box.
Business can differentiate their products in many different ways 

Differentiation methods

Method

Explanation

Example

Marketing and branding

  • Advertising using media such as TV or online, or promotional activities such as price promotions helps a business to stand out

  • Compare the Market created a memorable brand identity around a meerkat, playing on the words ‘market’ and meerkat

Packaging

  • Well-designed and attractive packaging that appeals to the target market can provide shelf appeal and encourage customers to select one product over another

  • Apple products are well known for their superior packaging, which creates an exciting opening experience for the customer

Functions and features

  • Adding unique features gains attention and increases demand from customers who may provide the business with favourable reviews 

  • Samsung‘s Galaxy Watch 5 has robust health tracking tools built into it, along with an am

Responses

您的邮箱地址不会被公开。 必填项已用 * 标注