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Chapter 12

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12 views20 pages

Chapter 12

Uploaded by

roshanefarooq11
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The marketing mix:

Product
Chapter 12
The marketing mix
All activities which go into the marketing of products

Producer finds out what consumers want

Fulfill the needs of the consumers

Branding of goods and services done

Promotion and advertisement

Attempt made to differentiate their product with those of competitors

All these activities are part of the marketing mix


The FOUR Ps
• Product- the good/service itself
• Price- price at which the good/service is sold
to the customer
• Place- channels of distribution selected
• Promotion- how the good/service is promoted
or advertised
Role of product decisions in the marketing
mix

Nowadays
The most
most
important
businesses are
element of the
market
marketing mix
oriented

Consumer needs After deciding


and wants, habits the product,
and lifestyle are
researched and
the other Ps
then goods are would be
produced determined
Types of product
Consumer goods- goods bought by consumers for
their own personal use
Consumer services- services bought by consumers
for their own use for example education, car repair
etc
Producer goods- goods that are produced for other
businesses to use e.g. machinery, components
Producer services- services that are produced to
help other businesses e.g. advertising agencies,
banking, insurance, accounting
What makes a product successful

• It needs to satisfy consumer needs and wants


• The product also needs to be of the right
quality so consumers are willing to pay the
price for it
• Product must not difficult to make that the
costs of production are greater than the price
charged for it
• Design, brand image, reliability
Product development
The costs and benefits of developing new
products
Benefits
• Unique selling point (USP) will mean the
business will be the first into the market with
the new product
• Diversification for the business
• Allows the business to expand into new markets
• May allow the business to expand into existing
markets
Costs
 The costs of carrying out market research and
analysing the findings
 The costs of producing trial products
 Lack of sales if the target market is wrong
 Loss of company image if the new product
fails to meet customer needs
The importance of brand image
• Nowadays products sold mostly through
retailers
• Therefore it should have a unique brand name
and features
• Advertising and promotion
• Higher quality of the product
• Develops brand loyalty
The role of packaging
• It has to be suitable for the product to be put in
• Protects the product
• Easy to transport the product
• Easy to open the container and use the product
• Eye catching
• Packaging is also used for promoting the product
• Labels on some products carry vital information
about them
Development •No sales at this time
•Prototype tested

Introduction •Product launched in the market


•Sales grow slowly

Growth
•Sales grow rapidly
•Persuasive advertisement

Maturity
•Sales now increase but very slowly
•Intense competition

Saturation •Sales stabilize at their highest point


•No new competitors

Decline
•Sales decline as product loses its appeal
•Product is usually withdrawn from the market
How stages of the product lifecycle
influences marketing decisions
Pricing
• A branded product is likely to be sold at a higher price when
introduced in the market
• Prices likely to be higher than rivals in growth stage
• In the maturity or saturation stage, prices will have to be
lowered
• Discounts might be announced in the decline stage
Promotion
• Spending on promotion will be higher in introduction stage
• Advertising would probably be reduced in later stages
• Extension strategy- promotion will be increased again
Extending the product lifecycle
• When a product reaches a maturity or saturation stage, a
business may stop sales starting to fall by adopting extension
strategies
• These give sales a boost
• Introduce new versions of the original product
 Sell into new markets
 Make small changes to the product design, color
or packaging
 Use a new advertising campaign
 introduce a new, improved version of the product
 Sell through different, additional retail oulets
Product life cycle extension
• Do you think adding new features to a product is the best extension
strategy for a manufacturing business to use? Justify your answer.
• Points might include: • Product appears more appealing [k] attracting
new / more customers or sales [an] increasing revenue [an] • High cost
of development / market research [k] which the business may not be
able to afford [an] • Customers may dislike changes [k] reducing sales
[an] • Adds value to product [k] therefore can charge a higher price
[an]
• Other strategies might include: • Finding new markets [k] widening
customer base [an] • Adapt / change the packaging [k] improving the
appeal [an] but existing customers may not recognise the product [an]
• Increase advertising / marketing / promotion [k] remind customers
that the product still exists [an] • Sell through additional outlets [k]
• Adding new features involves high
development costs [k] which the business may
not be able to afford [an]. Finding new
markets [k] could increase sales revenue [an].
There is a risk that customers may not like the
new features [eval] so it’s safer and cheaper to
try to find new markets. [eval]

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