Module 7 - Course: MKT1101 Student Name: Heidi & Dean...

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Course: MKT1101 Module 7 Review questions 1 Use examples to define the term ‘new product’. 9 Briefly example four product adjustment strategies that a marketing organization could consider. Give an example of each. Answers: Question 1 (1) New-to-the-world products . The telephone, television, computer and facsimile machine are commonly cited examples of new-to-the-world products. (2) Create a new product line. For example, V energy drink, produced by Frucor Beverages of New Zealand, has allowed this company to enter the elusive youth culture market which it was previously unable to do with plain soft drinks. (3) Adding new product to existing product lines . For example, Hallmark at one stage announced the addition of 17 new greeting cards-for pets. (4) Improvements or revisions of existing products. For example, Colgate’s ‘2in1’ toothpaste gives you a mouthwash and toothpaste all in the one bottle. (5) Repositioned products. These are existing products targeted at new markets or market segments. The company spent over a$4 million in advertising this time, and the Australian market had also developed a taste for flat-cut potato
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chips. The company aimed its products squarely at the preteen market and so far has been very successful, capturing a large share of the chip-eating market. (6) Lower-priced products . For example, the Mazda Millennia aims directly at the same market as the BMW, and offers many similar features at a significantly reduced price. Question 9 1) Product modifications (Change to quality, function, features and / or style) 2) Repositioning the product . For example, ‘restaurant style’ has become a popular positioning for soup companies. Heinz has launched a line of gourmet soups for two, packaged in a vacuum sealed bag, that are marketed as being as good as the traditional soups made by gourmet chefs . 3) Product line extensions (adding new products). For example, Mercedes Benz added 11 cars to its line of passenger vehicles between 1997 and 2000 , including two ‘ mini ’ city cars and a sports utility vehicle. 4) Product line contractions of the current product lines (deleting products from the line ). Q 3. Identify and explain the four stages in the product lifecycle. The product life cycle concept provides a way to trace the stages of a product’s acceptance, from its introduction (birth) its decline (death). A product progresses through four stages: 1) Introduction stage: sales are slow, and profits are negative, costs are high, a few competitors or not one. 2) Growth stage: sales increase slowly in early growth, and then rapidly in late growth, profits improve, costs fall as sales volume increases, competitors enter the market.
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3) Maturity stage: sales reach a peak and then start to decline, profit peak and then decline, promotional costs are high, many competitors holding market share. 4)
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Module 7 - Course: MKT1101 Student Name: Heidi & Dean...

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