2.2.1

Product

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Product Design

Product design is the process of creating new products or services for firms to sell. Firms that are good at product design will be good at researching new products, good at developing them and good at coming up with new and innovative ideas that customers will buy.

Market-driven approach

Market-driven approach

  • The market-driven approach is one that listens and responds to the needs and wants of customers.
  • Firms that use a market-driven approach don’t just design a product that a couple of people in the company think is a good idea.
  • They will do lots of market research into what customers want.
  • A market-driven approach is much more effective in developing successful new products.
Product differentiation

Product differentiation

  • Product differentiation is making your product different to competitors' products. A product’s unique selling point (USP) is the part of the product or service that is different to anything else in the market.
    • Tesla’s USP is that their cars run on electricity rather than petrol or diesel.
    • Dyson's USP is that it produces fans that are bladeless. However, other businesses, like Samsung, have since imitated this feature, and so it is no longer unique.

The Design Mix

A product is usually produced with the three following aspects in mind: function, cost and aesthetics.

Function

Function

  • Function is the way that a product works (including all of the different aspects of how it works).
    • For example, when designing a speaker you need to think about whether or not it will be Bluetooth, will it be wireless and if so, how will it be charged.
    • Beats by Dre offer wired and wireless versions but making the wireless headphones is usually more expensive, so Apple (which owns Beats) usually charges a higher price for these.
Cost

Cost

  • The product design and its features affects how much the product will cost to make, and so price is an important consideration when designing a product.
Aesthetics

Aesthetics

  • Product image (or the way a product looks) can make a product stand out from competition, but it also has important impact on the overall brand image of the business.
    • For example, Monzo is an app that offers banking services. Its functionality is not very different to other big banks like Barclays but the aesthetics of its products are very pleasing.
  • Brand image is important because it is essentially the reputation of the firm. This is not just important for selling the product but also for selling the firms other products and services.
Jump to other topics
1

Investigating Small Business

1.1

Enterprise & Entrepreneurship

1.1.1The Dynamic Nature of Businesses1.1.2Risk & Reward1.1.3The Role of Business Enterprise1.1.4The Role of Business Enterprise 21.1.5The Role of the Entrepreneur1.1.6End of Topic Test - Dynamic Nature of Business1.1.7Grade 9 - Dynamic Nature of Business
1.2

Spotting a Business Opportunity

1.2.1Customer Needs1.2.2Market Research1.2.3Market Segmentation1.2.4The Competitive Environment1.2.5Primary & Secondary Market Research1.2.6End of Topic Test - Business Opportunities1.2.7Application Questions - Business Opportunities1.2.8Exam-Style Questions - Market Segmentation1.2.9Diagnostic Misconceptions - Competition
1.3

Putting a Business Idea into Practice

1.3.1Business Aims1.3.2Business Objectives1.3.3Business Revenues & Costs1.3.4Costs - Calculations1.3.5Revenue - Calculations1.3.6Business Profits & Break-Even Analysis1.3.7Profits & Losses - Calculations1.3.8Interest - Calculations1.3.9Cash & Cash Flow1.3.10Cash & Cash Flow 21.3.11Cash Flow - Calculations1.3.12Sources of Business Finance1.3.13End of Topic Test - Business in Practice1.3.14Grade 9 - Business in Practice1.3.15Exam-Style Questions - Business in Practice1.3.16Diagnostic Misconceptions - Profit1.3.17Diagnostic Misconceptions - Company vs Business1.3.18Diagnostic Misconceptions - Economies of Scale1.3.19Diagnostic Misconceptions - Cash Flow1.3.20Diagnostic Misconceptions - Break-even1.3.21Diagnostic Misconceptions - Fixed Costs
1.4

Making the Business Effective

1.4.1The Options for Start-Up & Small Businesses1.4.2Limited Liability1.4.3Franchising & Not-For-Profits1.4.4Business Location1.4.5The Marketing Mix1.4.6Business Plans1.4.7End of Topic Test - Effective Business1.4.8Application Questions - Effective Business1.4.9Exam-Style Questions - Business Plans
1.5

Business Stakeholders

1.5.1Business Stakeholders1.5.2Technology & Business1.5.3Legislation & Business1.5.4Legislation & Business 21.5.5The Economy & Business1.5.6External Influences1.5.7End of Topic Test - Business Stakeholders1.5.8Grade 9 - Business Stakeholders1.5.9Diagnostic Misconceptions - Recessions
2

Building a Business

2.1

Growing the Business

2.1.1Business Growth2.1.2Finance2.1.3Changes in Business Aims & Globalisation2.1.4Ethics & Business2.1.5The Environment & Business2.1.6End of Topic Test - Growing a Business2.1.7Application Questions - Growing a Business2.1.8Exam-Style Questions - Business Growth
2.2

Making Marketing Decisions

2.2.1Product2.2.2Product Life Cycle2.2.3Price2.2.4Pricing Methods2.2.5End of Topic Test - Product & Price2.2.6Grade 9 - Product & Price2.2.7Promotion & Advertising2.2.8PR & Sales Promotions2.2.9Sponsorship & Product Placement2.2.10Promotional Mix2.2.11End of Topic Test - Promotion2.2.12Application Questions - Promotion2.2.13Exam-Style Questions - Promotional Mix2.2.14Place & Wholesalers2.2.15Direct to Consumer2.2.16E-commerce & M-commerce2.2.17Diagnostic Misconceptions - Decreasing Price2.2.18Diagnostic Misconceptions - Advertise vs Promote2.2.19Diagnostic Misconceptions - Social Media
2.3

Making Operational Decisions

2.3.1Job Production2.3.2Batch & Flow Production2.3.3Working with Suppliers2.3.4Effective Supply Chains2.3.5Just In Time & Just In Case2.3.6Managing Quality2.3.7Total Quality Management2.3.8The Sales Process2.3.9End of Topic Test - Operational Decisions2.3.10Grade 9 - Operational Decisions2.3.11Exam-Style Questions - Managing Stock2.3.12Diagnostic Misconceptions - JIT vs JIC
2.4

Making Financial Decisions

2.4.1Gross Profit & Net Profit - Definitions2.4.2Gross Profit - Calculations2.4.3Net Profit - Calculations2.4.4Rate of Return2.4.5Rate of Return - Calculations2.4.6Research & Financial Data2.4.7Marketing Data2.4.8Percentage Change - Calculations
2.5

Making Human Resource Decisions

2.5.1Organisational Structures2.5.2Organisational Structures 22.5.3Recruitment2.5.4Effective Recruitment2.5.5Training a Workforce2.5.6Motivating a Workforce2.5.7End of Topic Tests - Human Resources2.5.8Application Questions - Human Resources2.5.9Exam-Style Questions - Human Resources2.5.10Diagnostic Misconceptions - Owners vs Shareholders2.5.11Diagnostic Misconceptions - Internal Recruitment2.5.12Diagnostic Misconceptions - Employee Motivation

Practice questions on Product

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

  1. 1
    Why is product differentiation important?Flashcard
  2. 2
    What do we call the part of the product or service that is different to anything else in the market?Multiple choice
  3. 3
    Features of a market-driven approach:True / false
  4. 4
    What is the USP of Dyson Airblade hand dryers? Multiple choice
  5. 5
    What are the 3 aspects of the design mix?Fill in the list
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Exam-Style Questions - Business Growth

Product Life Cycle