The Marketing Mix: Product
The Marketing Mix
A term used to describe all the activities which go into marketing a product
The four Ps of the marketing mix
Product
Price
Place
Promotion
Design and Quality
The price at which the product is sold
Comparison with the prices of competitor's products
Price should, in the long run, cover costs
The channels of distribution that are selected
How the product is advertised and promoted
The Role of Product Decisions in the Marketing Mix
The product itself is probably the most important element in the marketing mix
Types of product
Some products are sold to consumers and some can be sold to other businesses
Consumer Goods
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
They are bought to help with the production process.
Producer services
These are services that are produced to help other businesses
Promotion of a producer good will be quite different to promotion of a consumer good
Producing the right product at the rice price is an important part of the marketing mix
The product needs to satisfy consumer 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
The product also needs to perform to a standard expected from it
Product Development
The process:
Generate Ideas
Select the best ideas for further research
Decide if the company will be able to sell enough
Develop a prototype
Launch the product in one part of the country to test the market
Full launch of the product to the whole market
The costs and benefits of developing new products
Benfits
USP (Unique Selling Point) 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
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
Selling a product directly to the customer makes it easy to inform the customer of the products's qualities and good points
The sales person can persuade the customer to buy the product
It is the assurance of a standard quality that makes consumers confident in buying branded products
Businesses use brands for their products to encourage consumers to keep buying their products and not those of their competitors
Consumers may have brand loyalty, which means they will keep buing the same brand of a product instead of products from other brands
The Role of Packaging
It has to be suitable for the product to be put in
Packaging has to give protection to the product and now allow it to spoil.
It also has to allow the product to be used easily
It has to be suitable for transporting the products
Promoting the product
It has to appeal to the consumer, eyecatching
The brand image will be reinforced bu the packaging in which the product is sold
The labels on products sometimes have to carry vital information about the product
The Product Life Cycle
First a product will be developed
Then introduced or launches on to the market
Sales start to grow rapidly
Maturity
Sales now increase only slowly
Competition becomes intense and pricing strategies are now competitive
Sales have reached saturation point and stabilize at their highest point
Sales of the product will decline
New products come along
The product has lost its appeal
Advertising is reduced and the stopped
Extending the product life cycle
Introduce new variations of the originals product
Sell into new markets
Make small changes to the product's design
Use a new advertising campaign
Introduce a new improved version of the old product
Sell through additional, different retail outlets