Page 172 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 3 Marketing

Introduction Growth Maturity Decline
Product Only a basic model of the Changes might be made Extension strategies The product and
product is available. to the product as a might be used to keep the packaging is not altered.
result of feedback from product in this, the most
consumers in the test profitable stage of its life
market. cycle.

Price Prices might be lower Brand image helps to Price will remain similar The price might be
than competitor prices create customer loyalty. to that of competitor reduced to maintain sales
to attract consumers, The price, if originally low, products. However, if the or sell off the remaining

or they might be high can be increased to one original price was high stock before withdrawing
if the product has no which is similar to that of due to the uniqueness the product from the
immediate competition. competitor products. of the product, then it market.
will probably need to be
decreased as competitors
will have introduced
similar products.

Promotion High promotional activity, Promotional activity Promotional activities The only promotional
such as advertising, to is still high to continue are aimed at reminding activity is to advertise the
create product awareness to persuade existing consumers that the lower price of the product
and inform consumers consumers to buy the product is still available or other promotions
that the product is on the product again and to in the market and how aimed at selling the
market. attract new consumers. it differs from that of remaining stock.

competitor’s products.
However, there might
be an increase in
promotional activities
170 for a short period of
time if this is used as an
extension strategy.
Place The product will be The product is more The product is now The product is only
offered for sale in widely available, which available for purchase available in profitable

specially selected outlets. helps to increase sales. through a wide outlets.
This might be used as a distribution network.
‘test market’.

Table 12.2 The influence different stages of the product life cycle can have on marketing decisions

TEST YOURSELF
1 Why do businesses develop new products?

2 How can packaging affect the sales of a product?
3 What are the four stages of the product life cycle?
4 Explain why a business may use extension strategies.

KEY TERMS Price

Price: the amount paid by the Does the price of a product help you to decide whether to buy it?
customer to the supplier when

Price is a very important part of the marketing mix because it is often the most
buying a good or service.

important influence on customer demand for a product.
Product quality: the product

The market for most goods and services is very competitive. Consumers
meets the needs and expectations

of customers. often base their buying decision, in part, on the price of the product. If there is
very little diff erence between product quality and function then the consumer