4.5

• 7 P’s of the Marketing Mix

  • Product
  • Price
  • Place
  • Promotion
  • People
  • Process
  • Physical Evidence
• Consumer Products are purchased by private individuals for their own personal use
• Industrial Products are goods purchased for commercial use, used in the production process to help the running of the business
• Aspects of branding

  • Brand awareness
  • Brand development
  • Brand loyalty
  • Brand value
• The importance of branding
• The product life cycle shows the different stages that most products go through from their R&D stage to their final removal from the market when there is no longer demand for the product
• Research & Development

  1. Investigating, designing, and developing a product before it is launched on the market for sale

  2. Designing and testing the product

  3. Market research (identifies gap in the market)

  4. Monitoring competitors
• Launch

  Product is introduced onto the market. Early adopters will buy the product, but most customers will not be aware of the new product, so advertising and promotion are vital to boost and sustain sales. A firm that is first on the market to launch a successful product = first mover advantage. Eg: Pfizer
• Growth


  Sales revenue increases as the product becomes known in the market and the firm gains market share. Competitors may set in at this stage
• Maturity

  Sales revenue peak or plateau, as sales growth slows and the firms contend with their rivals. Sales become saturated, so the firm relies on product differentiation strategies and product extension strategies to prolong the life cycle of mature products. Firms might also strive to reposition their product to prolong sales. Saturation = too many competitors in the market
• Decline


  Sales revenue continually declines leading to the eventual withdrawal of the product. This is usually due to changing fashions, habits, and tastes due to technological advances and R&D which make the product obsolete (outdated)
• Reasons for decline in sales revenue

  • Sales revenue continually declines leading to the eventual withdrawal of the product. This is usually due to changing fashions, habits and tastes due to technological advances and R&D which make the product obsolete (outdated)
• Can you think of a product that was successful in the market and then became obsolete?
• Extension strategies

  Marketing approaches used to lengthen the product life cycle. They are used as a product enters or is in the decline stage of its life cycle because the market is saturated
• Extension strategies

  • Price reduction to encourage more customers to buy the product
  • Product enhancements e.g. special features, limited editions, repacking, repositioning strategies, or improved versions of the product
  • New promotional strategies to reinvigorate interest and purchases of the product
  • Expansion into new markets, such as exporting the product to international markets
  • Using an existing brand name to launch a newly modified product
  • Adding a unique element to a product to stand out from competitors
• Businesses weigh up the financial costs and benefits of spending money on extension strategies before making a decision. For example, it would not be financially viable to spend money on extending the life cycle of products such as paper maps, public pay phones, dot matrix printers, and movie rental stores
• Investment


  The purchase of fixed assets (such as equipment and machinery) with the intention of creating a financial return (profit) in the future
• Profit


  The financial return from the trading activities of a business
• Cash flow


  The actual movement of money in and out of the organization
• Relationship between PLC and Investment, Profit & Cash Flow

  Construct the table below and work in groups to complete it. What is the relationship between the PLC and investment, profit, and cash flow?
• Practice Case Studies. Read pages 403 - 407
• Unit 4.5: 7 P’s of the Marketing Mix - “Product”
• Assessment Objectives:
• Do you agree with the statement: “branding is more important to customers than prices”
• Branding can be a sign, symbol, color scheme, font, or design
• Entry Ticket: Guess the hidden designs in these logos
• Branding


  Marketing technique used to give a product or business a unique name or identity
• Branding examples


  • Amazon, Nestle, Lego, IKEA, Apple, McDonald’s, Nintendo, Volkswagen
• Role of branding

  • To create an original identity for a good, service, or organization
  • To differentiate a business and/or its products from rivals
  • To build brand awareness
  • To build brand loyalty
  • To create a particular or desired corporate image
  • Can charge premium prices for products with a good brand
  • Helps gain or sustain competitive advantages
• Research has consistently shown that customer purchasing habits are affected by branding to a very large extent; and in many cases branding is more important to customers than prices
• Perrier and Evian

  • Perrier claims there are 50 million bubbles in its bottled water
  • Evian spelled backwards is ‘Naive’
• Brand Awareness


  • About the extent to which potential and existing customers know about, recognize, and remember an individual brand
  • Important aspect of any product strategy
  • Knowledge, awareness, and familiarity of a brand can lead to increased sales
  • Long brand names are harder for people to remember
  • Promotional strategies are used to enhance brand awareness
• Jeff Bezos: '“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well”'
• Brand Development

  • Firm’s marketing strategy in communicating the value of a brand and what the brand stands for
  • Increasing sales by making more people attracted to the brand
  • Common steps in the development of a brand include conducting relevant market research and identification of the target audience
• Many brands are simply named after their founder
• Some brands become so well-known and successful that the brand name and product become interchangeable
• Ensure a brand name is recognized or well-known to its potential market audience
• Brand Development

  1. Conducting relevant market research

  2. Identification of the target market / market segments

  3. Creating and selecting an appropriate brand name, logo, and slogan

  4. Developing a distinctive or unique selling point (USP) for the brand

  5. Consideration of the brand in relation to the overall business strategy

  6. Creating a focused marketing mix and marketing strategy for the brand
• Brand Development

  • It is a firm’s marketing strategy in communicating the value of a brand and what the brand stands for
  • Increasing sales by making more people attracted to the brand
• Brand development can create an image or perception of a business or its products


  Enables it to have a competitive advantage over its rivals