Product (AQA GCSE Business)

The Importance of Product

• A product's features, function, design and branding are key elements of its appeal to customers

  • Features and functions include aspects such as size, dimensions, capacity, colour, aroma, texture and capabilities

  • Design relates to the appearance of a product and its packaging, determined in the design mix

  • Brand refers to the identity of a product that makes it stand out from rival products or services, including aspects such as logos, slogans, colour schemes and personality

The Design Mix

• The design mix refers to the combination of elements that make up a product's design

  • Function is what a product can do and how well it does it

    • E.g. A simple lawnmower should cut grass, whilst a more advanced model may cut grass to different lengths and collect cuttings

  • Aesthetics is how a product appeals to consumers' senses, including its appearance, aroma, texture, sound quality or taste

    • E.g. Luxury perfumes are beautifully packaged in carefully-designed bottles and use a range of attractive scents

  • Cost refers to how cost-effectively the product is to manufacture, distribute and sell

    • E.g. Mass-produced chocolate bars are manufactured on production lines and sold at a relatively low price

    • Hand-made chocolates are produced in small batches and sold at a higher price

    • In both cases, they can be made and sold profitably

• Balancing the elements of function, aesthetics and cost helps to ensure a product's design is both functional and attractive while being cost-effective for both the manufacturer and the consumer

Diagram: the design mix

Fentimans prioritises all three elements of the product design, while Asda focuses on cost

• Many manufacturers aim to balance all three elements

  • E.g. Fentimans ginger beer is relatively affordable, packaged in eye catching bottles and the product itself is very good quality

• Other manufacturers may focus on one aspect more than the others

  • E.g. Asda's own brand of ginger beer is produced at the lowest possible cost and sold to consumers at a very low price

• Businesses must take care to balance customers' quality expectations with these elements 

  • The target market may value quality less than price and will not be prepared to pay a high price for goods, even if they are of the highest quality

• Developing a strong brand can help to differentiate a product or service from those offered by competitors, and can help a business to add value as customers are often willing to pay higher prices for brand they recognize and trust

The brand

• Branding is the process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product or company from its competitors

• Strong branding provides four key benefits to a business

Diagram: benefits of branding

Strong branding adds value, allows premium prices to be applied, improves product recognition and identity and differentiates products from those of rival businesses

1. Added value

• Strong branding can add value to a product by creating a perception of quality, reliability and reputation

  • E.g. Jaguar Land Rover vehicles have a reputation for reliability, style and performance

• It can also create strong emotional connections with their customers by appealing to their values, beliefs, and emotions

  • E.g. Brands like Patagonia and TOMS have built their brand identities around commitments to ethical causes, which resonate with loyal customers who prioritise these values

2. Ability to charge premium prices

• Customers may be willing to pay more for a product that is associated with a well-established brand

  • They often perceive products with strong branding to be of higher quality and therefore worth the extra cost

  • E.g. Perrier sparkling water sells at a significantly higher price than very similar supermarket own-brand products

3. Branding establishes recognition and identity

• This helps to build trust and credibility and creates an emotional connection with customers, which generates repeat purchases

  • E.g. Best-selling soft drinks brands Coca Cola and Pepsi are instantly recognisable due to their logos, packaging designs and colour schemes

• Brands can gain exposure and build their reputation by aligning themselves with events, organisations, or individuals that share their positive associations or values

  • E.g. Nike has sponsored many high-profile athletes and sports events, such as the Olympics and the World Cup

  • The business has built a reputation for being a brand that champions excellence and inspires people to be their best

4. Business differentiation

• Branding differentiates a business from its competitors, helping to develop a strong USP that helps a product stand out from its competitors

  • E.g. Apple is known for its innovative, sleek design and use of quality materials, which sets its products apart from its competitors

  • The company has built its brand around this USP and is recognised worldwide for its premium design

• A brand supports marketing and advertising efforts

  • Key brand elements can be used to build memorable promotional materials and campaigns

    • e.g. Cadburys' purple brand colour is used throughout its promotional materials

Product Life Cycle

• The product life cycle describes the different stages a product goes through, from its conception to its eventual decline in sales

• There are typically five stages in the product life cycle

  • Development, introduction, growth, maturity, and decline

Diagram: the product life cycle

The five stages a product goes through over its life span - from initial development to eventual decline 

• The implications for cash flow and marketing vary at each stage of the product life cycle

• Companies should tailor their marketing strategies and manage their cash flow to ensure long-term profitability and success

The Stages of the Product Life Cycle

Extension Strategies

• Extension strategies refer to the techniques used by businesses to extend the life of a product beyond its natural life cycle

  • They are designed to boost sales and maintain profitability for a product that has reached the late maturity or decline stage of its life cycle

• There are two types of extension strategies, which are often implemented at the same time

  • Product-related extension strategies

  • Promotion-related extension strategies

Comparison of Product and Promotion-related Extension Strategies