3.3 marketing mix productprice promotion place p p pp

3.3 MARKETING MIX

PRODUCT PRICE

PROMOTION PLACEPP

PP

MarketingMix

Product Price Promotion

AppearanceFunction

Cost

Cost basedCompetitor basedConsumer based

AdvertisingSales promotionPersonal selling

Place

RetailersWholesalersDistribution

3.3.1 Product

Central Question

What factors are crucial in

developing a successful product?

Learning Outcomes

• To be aware of the costs and benefits of developing new products

• To understand the concept of Brand Image and how this can impact sales and customer loyalty

• To be able to appreciate the role of packaging in the success or failure of a product

• To understand the stages of the Product Life Cycle and possible extension strategies

• To understand how marketing strategies and decisions can differ at each stage of the product life cycle

Successes

Failures

Video – Why did these products fail?

Can you think of any Business which sells only

ONE product?

Costs & Benefits of Developing New Products

COSTS BENEFITS

R&D can be expensive and takes time. Research data could be misleading.

Spread risks by developing product portfolio

Risk – no guarantee of success if completely new e.g. 3D TV’s

Additional Revenue streams which potentially could increase profits

If not well received – could affect Company image e.g. Google Glass

Could enhance Company and Brand image if successful

How to compete with similar products – on price, quality, branding?

Could increase customer loyalty

Economies of Scale, more competitive and more consumer choice.

Brand Image

• Look at these products. Write down any words that you associate with them.

• Have we all used similar words?• Do you think these words are what the Business

wants you to think of?• How does this relate to Brand Image?

Watch the Video and Consider…

• So what is Brand Image?• Is it important?• Are you influenced by brands – which ones, why?• Can you place a Value on a brand image e.g. on a

Balance sheet?• Can Brand image be positively or negatively

affected by external factors?• What Brand Image do you want to present for

YOU personally?

So How Can Brand Image…

• Impact on sales

Positively? Negatively?

So How Can Brand Image…

• Impact on customer loyalty

Positively? Negatively?

Brand Image

• Giving the product, a product range or the business, an identity or personality.

• Develop name and personality of brand through promotion

• Customers FEEL attached or connected in some way to that company.

Packaging

Choice of PackagingDepends on:

Protection Environment

Cost Effective

InformationDesign

Convenience

What packaging factors should be considered for these

products?

• Chocolate bar• Ice Cream• Computer• Crystal glassware• Fruit & Veg• Perfume

Product Life Cycle

Shows the different stages in the life of a product and sales that can be expected at each stage.

Sales

TimeIntroduction Growth Maturity DeclineDevelopmen

tSaturation

• Similar products enter the market

•Price lowered

•Some businessesmy be forcedout of the market

• Sales falling• Profits continue to fall

•Sales reach its highest point

•Rate of growth Slows

•Competitors enterthe market

• Sales increasingrapidly

• Profits will reach their highest at the end of this stage

• Sales are low

• Profits will be negative

• Product may be unknown

• Product is being designed

The Product Life Cycle Diagram

Use of the PLC

• Illustrate the broad trends in sales revenue• Identify points at which the business may need to

consider launching new products as older ones are in decline

• Help business identify when and where spending is required e.g. advertising

• Assists financial planning – cashflows, Profits or Losses

Different life cycles• Products with long life cycle?

• Products with short life cycle?

Extending the life cycle – How & Why? Discuss

Extension Strategies• Adapt the marketing mix e.g. price,

packaging

• Finding new markets for existing products

• Develop a wider product range

• Aiming the product towards specific target markets

• Changing appearance or packaging

Reflection Time – Have we met our objectives?

• To be aware of the costs and benefits of developing new products

• To understand the concept of Brand Image and how this can impact sales and customer loyalty

• To be able to appreciate the role of packaging in the success or failure of a product

• To understand the stages of the Product Life Cycle and possible extension strategies

• To understand how marketing strategies and decisions can differ at each stage of the product life cycle