Please enable JavaScript.
Coggle requires JavaScript to display documents.
B207 Readings 6 - 10 (THE MARKETING MIX) - Coggle Diagram
B207 Readings 6 - 10 (THE MARKETING MIX)
Product
Failure or Success
New product development
Only a minority of new products are new inventions: Just under half are product replacements, which are improved versions of existing products.
Kotler and Armstrong (2016) & Dibb et al. (2016)
1 New product planning
– reviewing current product performance and identifying threats and new product opportunities.
Analysis of the micro and macro environment, competitive positions of the organisation and competitors, differential advantage and marketing information.
Tools that can help in new product planning are SWOT analysis and Ansoff's Matrix.
2 Idea generation
– generating product ideas in line with organisational objectives
Depending on the industry/size of a n organisation, ideas may come from any of the following:
Research labs, periodic reviews, open calls for product suggestions, serendipitous suggestions from staff or customer feedback etc, competitors or other organisations or collaboration.
3 Idea screening
– assessing how well product ideas match organisational objectives and resources.
Selecting the most promising ideas for further development and screening out less prominent ones using a set of criteria.
Real, Win, Worth it (R-W-W).
Day (2007)
Can we win?
Can the product be competitive?
3 more items...
Can the company be competitive?
3 more items...
Is it worth doing?
Will the product be profitable at an acceptable risk?
2 more items...
Does launching the product make strategic sense?
2 more items...
Is it real?
Is the market real?
4 more items...
Is the product real?
3 more items...
4 Concept testing
– testing the new product concept onasmall sample of potential buyers to assess their reactions to it.
Testing a more detailed idea as a product concept with target consumers to gauge their reactions to it. The product concept could be described with words/images and may sometimes include physical representations.
Gain feedback through a set of questions.
Questions could cover; product attractiveness, benefits, uses and purchase intentions.
Focus groups, Online forums, Online brand communities.
Allows products to be refined before expensive further development is pursued.
5 Market/business analysis
– evaluating the new product’s potential sales, costs and profits for the organisation.
Kotler and Armstrong (2016, pp.300-301)
Recommend developing a marketing strategy consisting of three parts:
The target market.
The planned value proposition - the planned price, distribution and marketing budget for the first year.
The sales, market share and profit goals for the first few years.
Dibb et al., (2016)
Costs include research and development, manufacturing, any new facilities, any additional staffing and marketing of the new product.
Jobber & Ellis-Chadwick, (2013)
Financial viability may be assessed using a break-even analysis - The number of sales needed to cover the costs.
6 Product development
– determining if the new product can be produced both technically and cost-effectively.
Entails translating the product concept into an actual prototype of the product.
This can be used to gauge consumer interaction of an actual product rather than a description/image.
7 Test marketing
– introducing the new product in limited geographic areas or a representative marketing channel to determine the reactions of potential buyers (sample launching of the entire marketing mix).
Doesnt just involve testing a prototype with a sub set of consumers.
Includes the full marketing mix.
Tested in laboratory, virtual stores, on a panel of consumers or in a limited real market setting.
Less costly than a full scale rollout
Allows elements of the marketing mix to be adjusted if needed based on the feedback received.
8 Commercialisation
– refining and settling plans for full-scale production and marketing.
Full scale launch of a new product having evaluated feedback from the test marketing and made any amandements to the marketing mix.
Costliest stage of NPD
Timing of the new products launch needs to be careful.
Product
The term product refers to services and ideas as well as physical goods.
Think of the term 'offering'
Dibb et al. (2016)
The product P does not include the physical manufacturing of the product. However, it does include a broad range of product considerations.
Packaging design
Branding
Specifying a product's development requirements to ensure they are informed by marketing research on customers' needs and expectations.
Aftercare and support
There are four main types of product
Shopping
- less frequently purchased, selected on price, quality and style eg; furniture, computers.
Specialty
- Special purchase, expensive, strong brand preferences eg; luxury items.
Convenience
- Frequently purchased, low investment and involvement eg milk, tissues.
Unsought
- Little knowledge eg; new invention. Or little interest eg; insurance.
Pricing
product mix pricing
Pricing in Business markets
Factors that affect pricing decisions
Approaches for informing pricing decisions
Types of pricing
Competitor based
Customer based
Cost based
Ethical considerations
The cost of an exchange in return for an offering.
Key purchasing consideration in relation to competing offerings.
most readily manipulated element of the marketing mix with pricing promotions used as an incentive to encourage purchasing behaviour.
Kotler & Armstrong, (2016)
Price is regarded as a means of creating value for customers and developing customer relationships.
Promotion (Marketing communications)
The promotion mix
AMA (2014)
The various communication techniques such as advertising, personal selling, sales promotion, and public relations / product publicity available to a marketer that are combined to achieve specific goals.
The communication process
Also referred to as 'marketing communications', representing the range of ways in which an organisation can communicate with its target audiences.
Fill and Turnbull, 2013, p.20
An audience centered activity, designed to engage audiences and promote conversations.
Place (Distribution channels)
An offering needs to be made available in such a way that customers are able to purchase it easily.
Cusomers are typicaly offered a range of channels through which to purchase an offering.
Kotler and Armstrong (2016, p. 177)
Value Delivery Network can be suppliers and distributors that enable an organisation to offer its products to customers.
Providing value through enabling greater efficiency, expertise and reach.
Other functions that some channel members may include:
Promotion
- Communicating promotions for a product
Matching
- Some channel members may influence aspects of a product enabling it to match customers needs more closely.
Contact
- Some channel members may be in contact with potential consumers and can influence purchasing decisions.
Negotiation
- Agreeing price or terms to facilitate exchanges.
Financing
- Providing funding for channel distribution.
Risk taking
- Taking on some of the risks involved in channel distribution.
Information
- Channel members can be a source of information about other stakeholders and forces within the marketing environment, helping with strategic planning.
Traditional distribution channel:
Manufacturer
Wholesaler
Retailer
Consumer
Under a traditional distribution channel, each channel member was independent and pursued their individual goals and could conflict as well as cooperate with other channel members.
VMS Vertical Marketing system
Manufacturer, Wholesaler, Retailer
Consumer
Channel members act as a unified system under the leadership of one channel member on the basis of the following;
Contractual VMS
- Having contractual arrangements with them - (Franchises) Mcdonalds, Subway, Holiday Inn, Hertz
Administered VMS
- Exerting control through superior size or power. - Walmart
Corporate VMS
- Owning the other channel members - Apple
Services and Nonprofit
Processes
Physical evidence
People
The Marketing Mix
One of the key concepts in marketing
Historically known as the 4p's
Product, Place, Promotion and Price
Additonal p's come into play with service offerings. (extended mix for services)
Process, Physical evidence and People
All of the elements play a part in meeting consumer needs