2.21 Product

The design mix shows whether a product will focus on function, cost or appearance.

It can obviously focus on more than one, but the design mix diagram (below) shows which one a product is closer to:

design mix

A business will then look at ways in which it can differentiate its product from the competition, usually in one of the following ways:

1.Branding

2.USP

3.Location

4.Design

5.Customer Service

6.Quality

7.Product mix

The Product Life Cycle (below) shows which stage a product is at. Each stage will have implications for pricing, place and promotion.

life cycle

Introduction – profits here are often low due to high R&D costs. Sales are often low as people don’t yet know about the product.

Growth – more people know about the product so sales and profits are higher.

Maturity – more competitors appear, sales are still high but profits are starting to fall, the business may offer discounts in order to maintain sales volume.

Decline – profits and sales are falling, the product may be discontinued.

A business might try to extend the Product Life Cycle by changing some aspect of the product or by promoting the product to new markets e.g. overseas.