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Chapter 12: The marketing mix:product (The importance of brand image…
Chapter 12: The marketing mix:product
Marketing Mix
The four Ps of the Marketing Mix
Each part of the marketing mix has to be considered carefully to make sure that it all fits together and one part does not counteract the other
Promotion. This is how the product is advertised and promoted.
Place. This refers to the channels of distribution that are selected.
Price. This is the price at which the product is sold.
Product. This applies to the product itself - its design and quality (most important element in the marketing mix)
A term which is used to describe all the activities which go into marketing a product or service. These activities are often summarised as the four Ps - product, price, place and promotion.
Defining the type of product the business is producing is important when deciding how the product will be developed and marketed
The product needs to satisfy the customer wants and needs. If it does not then it will not sell.
The product also needs to be of the right quality so the price is what consumers are willing to pay
The costs of production must enable a price to be set that will produce a reasonable profit
Design of the product is very important. Not only does the quality need to be appropriate for the brand image, but it also has to last a reasonable length of time.
Types of product
Consumer goods. These are goods which are consumed by people
Consumer services. These are services that are produced for people.
Producer goods. These are goods that are produced for other businesses to use.
Producer services. These are services that are produced to help other businesses
Product Development
1) Generate ideas
2) Select the best ideas for further research
3) Decide if the company will be able to sell enough for the product to be a success
4) Develop a prototype
5) Launch the product in one part of the country to test the market
6) Go to a full launch of the product to the whole market
Benefits of the business when developing new products:
USP (unique selling point) -the special feature of a product that differentiates it from the products of competitors-
will mean the business will be first into the market with the new product
diversification for the business, therefore giving it a broader range of products to sell
it allows the business to expand into new markets
it may allow the business to expand into existing markets
Costs for the business when developing new products:
the costs of carrying out market research and analysing the findings
the costs of producing trial products including the costs of wasted materials
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
needs advertising to reinforce the brand's qualities
higher quality than branded products
always of the same standard (assure quality)
unique name (brand name - the unique name of a product that distinguishes it from other brands)
unique packaging
encourages customers to keep buying it (brand loyalty - when consumers keep buying the same brand again and again instead of choosing a competitor’s brand)
creates a brand image (an image or identity given to a product which gives it a personality of its own and distinguishes it from competitors’ brands)
higher price than unbranded products
Packaging (the physical container or wrapping for a product. It is also used for promotion and selling appeal)
protects the product
easy to open the container and use the product
easy to transport the product
promotes the brand image
carries information about the product
eye-catching
suitable for the product to fit in
Product Life Cycle (describes the stages a product will pass through from its introduction, through its growth until it is mature and then finally its decline)
Stages:
1) Product will be developed
2) It is then introduced or launched to the market
3) Sales start to grow rapidly
4) Maturity. Sales starts to increase slowly
5) Sales have reached saturation point and stabilise at their highest point
6) Sales of the product will decline as new products come along or because has lost its appeal
How stages of the product life cycle influence marketing decisions
It can help business with pricing and promoting decisions
Prices are likely to be higher in the growth stage than in saturation or decline stage
Spending on promotion will be higher at the introduction stage than in other stages
Extending the product life cycle
introduce new variations of the original product
sell into new markets
make small changes to the product's design, colour or packaging
use a new advertising campaign
introducing a new, improved version of old product