12. The Marketing Mix: product

• • Marketing Mix: a term used to describe all the activities that go into marketing a product or service.
• • The marketing mix can be summed up as the 4 Ps:
  • Product - applies to the product or service. Design, features and quality.
  • Price - the price at which the product is sold, comparisons between prices of competitors.
  • Place - channel of distribution that is selected.
  • Promotion - how the productivity is advertised and promoted.
• Consumer goods: bought by consumers for their own use.
• • Consumer services: services bought by consumers for their own use. Ex. Cleaners
• • Producer goods: there are goods that are produced for other businesses’ use to help with the production process. Ex. Trucks
• • Producer services: services that are produced to help other business. Ex. Accountants.
• • Points to consider about choosing product:
  • Satisfying existing needs and wants of consumers
  • seasonal pricing
  • New and original idea
  • Unique selling point
  • Capable of stimulating new wants from their consumers.
• Development of New Products:

  1. Generate ideas
  2. Select the best idea for further development
  3. Decide if the company will be to sell enough for the product to be a success.
  4. Develop a prototype
  5. Launch the product in one area to test the market
  6. Go to a full launch of the product to the whole market.
• Development of New Products

  • benefits:
  • USP – a unique selling point: a special feature about a product that differentiates it from its competitors’ product.
  • Diversification
  • Allows businesses to expand into new and existing markets
• • Development of New Products
  • drawbacks:
  • Costs of carrying out market research and analysing the findings
  • Cost of producing trial products
  • Brand image is damaged if the product fails to meet consumer demand
  • The lack of sales if the target market is wrong
• • Brand name: the unique name of a product that distinguishes it from other brands.
• • Brand loyalty: when consumers keep buying the same brand again instead of choosing a competitor’s brand.
• • Brand image: an image or identity given to a product which gives it a personality of its own and distinguishes it from its competitors.
• • Good branding includes:
  • Brand name
  • Higher quality than unbranded products.
  • Unique packaging
  • Brand loyalty
  • Assured quality
  • Creates a brand image associated with consuming the product.
• • Packaging: the physical container or wrapping for a product.
  • 2 functions - protect and promote product
  • Protects the product and makes it easier to transport
  • Eye catching
  • Carries information about the product
  • Promotes brand image
• • Product life cycle: describes the stages a product will pass through from its introduction, though its growth until it is mature, and then finally its decline.
• 1. Development: First, the product is developed. The prototype will be tested in the market before its launch. There are no sales during this time.
• 1. Introduction: Then it is introduced or launched in the market. Sales are often slow. No profit made as development costs are not yet covered.
• Growth: The product gains more sales. Advertising is changed to persuade and encourage customer loyalty. Prices reduced due to competitors and profit starts to be made.
• Maturity: sales increase slowly. Competition intense and advertising is used to maintain sales growth and profit is at its highest.
• Saturation: sales have stabilized at their highest point. Competition and advertising is high and stable, but profit starts to fall as sales are stable and prices are reduced to be competitive.
• Decline: sale of product starts to decline as new products enter, or it has lost its appeal. Product is withdrawn from market and sales, prices and advertising low until it stopped.
• • Introduction –
  • Product – newly launched product
  • Price – price skimming or penetration pricing
  • Place – limited range of exclusive shops (if price skimming is used)
  • Promotion – informative advertising
• • Growth
  • Product – remains the same
  • Price – raise prices if penetration pricing was used
  • Place – increase the number of outlets, e-commerce
  • Promotion – establish a strong brand identity through promotional activities.
• • Maturity/Saturation
  • Product – plans for product changes begin
  • Price – lower prices to competitive
  • Place – full range of distribution channels used
  • Promotion – sales promotion techniques to encourage repeat purchases
• • Decline
  • Product – changes made to extend the life cycle
  • Price – lower prices
  • Place – sell through low-cost outlets
  • Promotion – re-launch the product as an extension strategy
• • Extension strategy: a way of keeping a product at the maturity stage of the life cycle and extending the cycle.
• Extending Product Life Cycle:

  • Introduce new variations into the original product
  • Sell into new markets
  • Make small changes to the product’s design, cover, colour
  • Sell through additional retail outlets
  • Introduce a new, improved version of the old product
  • Use a new advertising campaign