Why must a new product be designed around the needs of its target market?

A product only sells if it offers what its target customers want. A phone aimed at older users, for example, may need larger buttons and a simple menu.

Why does image matter when a business designs a new product?

Product image is how customers see a product, such as luxurious, fun or reliable. A strong, positive image can persuade customers to buy and to pay more.

What is product differentiation?

Product differentiation is making a product different from rivals' products in ways customers value. Differentiation can come from design, quality, features or brand.

AQA GCSE Business 8132

Business in the Real World

Topic overview What a business is and why people start one Goods, services, needs, wants and factors of production Business sectors, entrepreneurs and a changing business environment Sole traders, partnerships, limited companies and not-for-profit organisations Business aims and objectives Why business objectives differ and change Stakeholders and their influence on businesses Factors affecting business location Business planning and basic financial terms Expanding a business and economies of scale

Influences on Business

Topic overview E-commerce and digital communication Ethics, the environment and sustainability Interest rates, employment and consumer spending Globalisation and exchange rates Employment, health and safety and consumer law Competition, risk and uncertainty

Business Operations

Topic overview Job, flow and lean production Managing stock: just in time and just in case Suppliers, procurement, logistics and supply chains Quality control, quality assurance and TQM Customer service and the sales process

Human Resources

Topic overview Organisational structures, span of control and delegation Recruitment, selection and contracts of employment Financial and non-financial methods of motivation Induction, on-the-job and off-the-job training

Marketing

Topic overview Identifying and satisfying customer needs Market segmentation Purpose of market research and primary and secondary research Market research methods and interpreting findings Pricing methods and factors affecting price New products, USP, brand image and the Boston Matrix Product life cycle and extension strategies Promotional methods and the promotional mix Channels of distribution, e-commerce and m-commerce The integrated marketing mix

Finance

Topic overview Sources of finance Cash flow and cash flow forecasts Financial calculations and average rate of return Break-even charts and margin of safety Income statements and statements of financial position Profit margins and judging financial performance

Marketing

New products, USP, brand image and the Boston Matrix

3 things to know
Paper 2

Overview

The benefits and risks of new products, design and image, product differentiation, USPs and brand image, product portfolios, and stars, cash cows, question marks and dogs in the Boston Matrix.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

What are the benefits of developing new products?

Key term

What are the risks of developing new products?

Key term

Why is product design important when developing a new product?

Questions from this subtopic

Each one with the model answer underneath.

1
What are the benefits of developing new products?
Model answer
New products can attract new customers and increase sales. New products also help a business stay ahead of competitors and replace products in decline.
2
What are the risks of developing new products?
Model answer
Research and development is expensive and takes time. Many new products fail, so the business may never recover its costs.
3
Why is product design important when developing a new product?
Model answer
Good design makes a product attractive, easy to use and cost-effective to make. Design can be the main reason customers choose one product over another.
4
Why must a new product be designed around the needs of its target market?
Model answer
A product only sells if it offers what its target customers want. A phone aimed at older users, for example, may need larger buttons and a simple menu.
5
Why does image matter when a business designs a new product?
Model answer
Product image is how customers see a product, such as luxurious, fun or reliable. A strong, positive image can persuade customers to buy and to pay more.
6
What is product differentiation?
Model answer
Product differentiation is making a product different from rivals' products in ways customers value. Differentiation can come from design, quality, features or brand.

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Business in the Real World

Influences on Business

Business Operations

Human Resources

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The pays a fee and a share of revenue.

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