The marketing mix: product (Product development ( Decide if the company…
The marketing mix: product
The marketing mix
Price - Ch 13
Place - Ch 15
Product - design and quality
Promotion - Ch 14
Types of product
Consumer services - produced for people
Producer goods - produced for other businesses to use
Consumer goods - consumed by people
Producer services - produced to help other businesses
Promotion will be different for each type(discussed in Ch 14) and good products have to have a right price.
The right quality for the right price consumers can pay
Price is set by production costs to produce a reasonable profit.
Needs to satisfy consumers' wants and needs
Design - reliability, performance and quality should be consistent with the product's brand image
Decide if the company will be able to sell enough for the product to be a success.
Develop a prototype
Select the best ideas for further research
Launch the product in one part of the country to test the market
(from e.g employees, customers' suggestions, competitors, products, Research and Development department, Sales department.)
Go to a full launch of the product to the whole market.
The costs and benefits of developing new products
Diversification of products
Expand into new markets
USP(unique selling point)
Expand into existing markets
Lack of sales if target market is wrong
Loss of company image if product fails to meet customer needs.
Costs of producing trial products including wasted materials
Costs of market research and analysing the findings
Importance of brand image
Selling a product to a customer directly makes it easy to inform the customer the product's qualities and good points.
When products are sold to retailers or other businesses, the product's unique features and reasons for buying it is conveyed through a brand name. Branded products are usually higher quality so it assures consumers.
Brands encourage customers to keep buying their products. Consumers may have brand loyalty.
Brand image is important and its image surrounds the brand while being reinforced by advertising.
The role of packaging
Packaging has to give protection to the product, allow it to be used easily and suitable for transportation
Has to appeal to the customer. It's usually the packaging that catches the customer's eye. Brand image is reinforced by the packaging and design varies depending on the price of the product.
Labels on products have to carry vital information about the product, such as how to store or use it and what ingredients it contains
Product life cycle
The product will decline as new products come or it has lost its appeal. Soon it will be withdrawn from the market.
Sales grow rapidly. Advertising is changed to persuasive advertising for brand loyalty. Prices are reduced to let new competitors in. Profits is being made.
It's then introduced to the market. Sales grow slowly because customers aren't aware. Informative advertising is used. Price skimming(Ch 13) may be used if it's in new development and has no competitors.
Competition becomes intense and pricing strategies are now promotional pricing(ch 13)
The product is developed, then tested and market research is carried out before it's launched.
Sales have saturated and reached their highest point. Competition is high but there are no new competitors. Profits fall.
Extending the product life cycle
Introduce new variations
Sell into new markets
Make small changes to the design
Use a new advertising campaign
Introduce a new and improved version of the old product
Sell through different retail outlets.