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The Marketing Mix - Product: Reading 6 - Coggle Diagram
The Marketing Mix - Product: Reading 6
The Marketing Mix
Product, Place, Promotion, Price
Additional P's - Process, Physical Evidence, People
Elements of the marketing mix constitute the offer made to customers and all of the elements play a role in meeting consumer needs
Product
Covers services and ideas as well as physical goods
Dibb 2016 - doesnt include the physical manufacturing of a product, does include a broad range of product related considerations such as
specifying a product’s development requirements to ensure they are informed by marketing research on customers’ needs and emerging expectations
packaging design
branding
after-care service and support.
Four main types of product
Convenience - frequently purchased, low investment and involvement
Shopping - less frequently purchased, selected on price, quality and style
Speciality - special purchase, expensive, strong brand preferences
Unsought - little knowledge or little interest
New product development
Crawford & Di Benedetto 2014 proposed a five step basic new products process -
Phase 1 Opportunity identification and selection
Phase 2 Concept generation
Phase 3 Concept/project evaluation
Phase 4 Development (includes both technical and marketing tasks)
Phase 5 Launch
Crawford 1991 extended the work from Crawford & Di Bendetto 2014 to include:
1 New product planning - reviewing current product performance and identifying threats and new product opportunities
2 Idea generation - generating product ideas in line with organisational objectives
3 Idea screening - assessing how well product ideas match organisational objectives
4 Concept testing - testing the new product concept on a small sample of potential buyers to assess their reactions to it
5 Market/business analysis - evaluating the new products potential sales, costs and profits for the organisation
6 Product development - determining if the new product can be produced both technically and cost-effectively
7 Test marketing - introducing the new product in limited geographic areas or a representative marketing channel to determine the reactions of potential buyers
8 Commercialisation - refining and settling plans for full scale production and marketing
Product planning in detail
Step 1: New product planning
Analysis of the micro and macro environment, competitive positions of the organisation and competitors, differential advantage and marketing information
Step 2: Ideas generation
Research laboratories with teams dedicated to developing new product ideas and prototypes (more likely in high-technology industries)
Periodic reviews of products and product portfolios
Open calls for product suggestions internally and externally
Serendipitous suggestions from staff members, suppliers, distributors, or customer feedback
Competitors or other organisations
Collaboration
Step 3: Idea screening
Idea screening involves selecting the most promising ideas for further development and screening out less promising ones, using a set of criteria
Step 4: Concept testing
Test a more detailed idea as a product concept with target consumers to gauge their reactions to it
The product concept might be described in words and/or images and sometimes using physical representations, with target consumers feedback sought to a set of questions
Step 5: Market/business analysis
Kotler & Armstrong 2016 recommended developing a marketing strategy consisting of three parts:
1) the target market
2) the planned value proposition - the planned price, distribution and marketing budget for the first year
3) the sales, market share and profit goals for the first few years
Step 6: product development
Product development entails translating the product concept into an actual prototype of the product which can be used to gauge consumer reactions to the physical product rather than just a description or image of it
Step 7: Test marketing
Includes testing not only a prototype product with a subset of target consumers but also the full marketing mix
Step 8: Commercialisation
Commercialisation if the full scale launch of the new product, having evaluated the feedback from the test marketing and incorporated any required amendments to the marketing mix
Failure or success?
Reasons for failure
Overestimation of the market size
Disregarding marketing research
Higher than expected product development costs
Poor product design
Incrrect positioning
Unsuitable launch timing
Inappropriate pricing
Poor promotion
Aggressive competition from competitors