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Marketing Mix Strategy I: Product and Service - Coggle Diagram
Marketing Mix Strategy I: Product and Service
Level of Consumers Product
Level 1: Core Customer Value
What is the buyer really buying?
Addresses the problem the customer is trying to solve
Level 2: Actual Product
Turns the core benefit into a tangible product
Includes features, design, quality, brand name, packaging
Level 3: Augmented Product
Additional services and benefits around the core and actual product
Creates additional value and a full brand experience
Classifications of Consumer Product
Convenience Products:
Frequently purchased with minimal comparison (e.g., laundry detergent, soft drinks)
Low-priced and readily available
Marketing strategy: Widespread distribution, easy access
Shopping Products:
Purchased less frequently with careful comparison (e.g., furniture, clothing)
Consumers invest time in research
Marketing strategy: Targeted distribution, focus on product features and comparisons
Specialty Products:
Unique characteristics or strong brand identity
Consumers willing to make special efforts to purchase (e.g., luxury cars, designer clothes)
Marketing strategy: Limited distribution, focus on brand image and exclusivity
Unsought Products:
Consumers may not be aware of or consider buying (e.g., life insurance, blood donations)
Requires significant marketing and promotion
Individual Product Decisions
Product Quality :
A cornerstone of product positioning, quality influences performance and satisfaction.
Performance Quality:
How well a product fulfills its functions (e.g., Rolls-Royce vs. Chevrolet)
Conformance Quality:
Consistency in delivering targeted performance (e.g., B&B Hotels' reliable service)
Quality Level:
Matching target market needs and competitor offerings
Quality Consistency:
Minimizing defects and delivering consistent performance
Product Features:
Enhancements that differentiate a product from competitors.
Product Style and Design:
Goes beyond aesthetics to impact usability.
Focuses on customer needs and product-use experience
Example: PopSockets - enhanced phone grip and functionality
Branding:
The essence of a product, creating value and distinction.
Benefits for Consumer:
Product identification
Quality assurance
Benefits for Sellers:
Legal protection for unique features
Market segmentation (e.g., Toyota's Lexus and Toyota brands)
Storytelling and building brand image (e.g., Avocados From Mexico)
New Product Development Process
Idea Generation
Internal Idea Sources:
Establishing R&D Research Centers
Harnessing Internal Creativity
Conducting Focused Hackathons
Recognizing “Hidden” Ideas
Using Technology to Generate Ideas
Repurposing Existing Products
Unbundling Existing Offerings
External Idea Sources:
Unbundling Existing Offerings
Learning from Competitors
Learning from Innovation Leaders outside the Industry
Learning from Customers
Idea Screening
Product/Service Description:
What is it?
Value Proposition:
What problem does it solve for the customer?
Target Market:
Who will buy it?
Competition:
Who are the rivals?
Market & Financial Estimates:
How big is the market? What's the pricing strategy? How long and how much will development cost?
Market Need:
Does it address a genuine customer need or problem?
Competitive Advantage:
Does it stand out from the competition?
Profitability:
Can it generate a healthy return on investment?
Feasibility
: Can it be realistically developed and produced within budget and time constraints?
Alignment with Company Strategy: Does it fit the company's overall goals and direction?
Concept Development and Testing:
Product Idea: A general notion of a potential product offering.
Product Concept: A detailed elaboration of the idea, presented in a way that resonates with the target audience.
Product Image: The consumer's perception of the actual or potential product.
Marketing Strategy Development
Balancing Potential and Resources:
Multiple Strong Concepts
Strategic Decision
Key Considerations for Moving Forward:
Market Potential
Resource Allocation
Competition
Synergy
-Brand Alignment
Choosing the Right Path:
Single Concept
Multiple Concept
Prioritization
Business Analysis:
Sales Forecasts
Cost Estimates
Profitability Analysis
Product Development:
R&D Takes the Lead:
The research and development department takes charge of developing the product concept into a physical form.
Prototyping:
One or more physical versions of the concept are created. These prototypes can be basic or elaborate, depending on the product's complexity.
Testing and Refinement:
Prototypes are rigorously tested to ensure functionality, user experience, and manufacturability.
Balancing Act:
The goal is to create a product that meets customer needs, is producible within budget, and excites the target market.
Test Marketing:
Identify Product Flaws:
Test marketing uncovers any functionality, usability, or design issues before mass production, saving time and money.
Optimize Marketing Mix:
It allows companies to test different elements like pricing, advertising, and distribution channels to create the most effective marketing program.
Gauge Market Potential:
Test marketing provides real-world insights into consumer demand and purchase behavior, helping to predict success in a wider market.
Reduce Launch Risk:
By identifying potential problems early on, test marketing mitigates the risk of failure in a full-scale launch.
Commercialization:
Targeting and Positioning
Marketing Communications
Distribution Channels
Pricing Strategy
Branding and Packaging
Marketing Budget
Product Life-Cycle Strategies
Introduction Stage:
Slow Sales Growth
Limited Profits or Losses
High Promotional Costs
Inventory Building
Basic Product Offerings
Targeting Early Adopters
Growth Stage:
Product Innovation
Market Segmentation
Distribution Expansion
Shifting Marketing Focus
Pricing Strategies
Maturity Stage:
Market Modification
Find New User and Segments
Increase Consumption
Product Modification
Enhance Features and Benefits
Update Styling and Packaging
Marketing Mix Modification
Refine Customer Service
Optimize Pricing Strategies
Enhance Advertising and Promotions
Explore New Distribution Channels
Decline Stage:
Recognizing the Decline Stage
Falling Sales
Reasons for Decline
Technological Advancements
Shifting Consumer Preferences
Increased Competition
Strategic Decisions in the Decline Stage
Maintain
Harvest
Drop
The Cost of Holding Onto Weak Products
Management Time
Inventory and Pricing Issues
Marketing Inefficiency
Brand Reputation
Future Innovation
Services Marketing:
Standardization Benefits
Consistent Brand Image
Cost Efficiency
Adaptation Needs
Market Variations
Meeting Local Needs
Growth of Global Service Industries
Banking
Retail