Developing the Marketing Mix

• Product

• Pricing

• Placing

• Promoting

Product

• What?– Anything that can be offered to a market

for attention, acquisition, use or consumption and that might satisfy a want or need.

– Its include physical objects, services, persons, places, organisations, ideas, or mixes of these entities.

– Tangible Vs Intangible (such as service). – Services are products that consist of

activities, benefits, or satisfactions that are offered for sale (such as haircuts, tax preparation and home repairs). Services are essentially intangible and do not result in ownership of anything.

• Levels of Products– Core Product (benefit)

– Actual product (Brand name, Packaging, Features, Design and quality levels).

– Augmented Product (Installation, PSS, Warranty, Delivery & Credit)

• Classifications– Consumer Product ( Convenience,

Shopping, Specialty and Unsought)

– Industrial Product (Materials & parts, Capital items and Supplies & Services)

Product: Marketing Considerations for Consumer Products

Type of Consumer Product

MarketingConsiderations Convenience Shopping Specialty Unsought

CustomerBuyingBehaviour

Frequent, littleplanning, littlecomparison orshoppingeffort, low customerinvolvement

Less frequentPurchase, muchplanning andshopping effots, comparison ofbrands on price,quality, style

Strong brandpreference and loyalty, specialpurchaseeffort, littlecomparison of brands, lowprice sensitivity

Little product awareness,knowledge (or of aware,little or evennegative interest)

Price Low Higher High Varies

Distribution Widespreaddistribution,convenientlocations

Selective distribution infewer outlets

Exclusive distribution, only inone or a few outlets permarket area

Varies

Promotion Mass promotionby the producer

Ads, personalselling by boththe producerand resellers

More carefultargeted promotionby both producerand resellers

Aggressive adverstising,Personal selling byproducer andresellers

Examples Groceries,magazines,toiletaries etc.

Major appliances,tv, furniture,clothing

Luxury goods,such as Rolexwatcxhes

Life insurance, Charityclub, recreation club etc.

Product: Industrial Products

Product bought by individuals and organizations for further processing or for use in conducting a business

• Capital Products - Expensive items, used in business operations, but do not become part of any type of finished product. Used over long periods of time, their cost is normally depreciated or spread over some useful life rather than expensed completely in the year of purchase. E.g. Physical facilities (manufacturing plants, office building, major equipment, accessory equipments 0 desk fax machine, forklifts)

– Capital Items - Industrial Products that partly enter the finished product, including installations and accessory equipment.

• Production Products - Part of some finished products

– Materials & parts - Industrial products that enter the manufacturer’s product completely, including raw materials and manufactured materials and parts

• Operational Products -– Supplies & Services - Industrial products that do not enter the finished product at all. E.g. Office

supplies, maintenance, repairs, light bulbs etc.

Product: Decisions

• Product Decisions– Individual Product Decisions

• Product attributes (quality*, features & design) > Branding (Brand Equity **) > Packaging > Labelling > Product support services

Product Components

Product Components

Product Features• Quality• Design• Branding• Packaging

Customer Service• Purchase Services• Usage Services

Product Components(cont.)

• Product quality: The ability of a product to perform its functions. Includes the product’s overall durability, reliability, precision, ease of operations and repair, and other valued attributes. - Major positioning tools. Two dimensions: Level & Consistency

• Brand equity: Value of a brand, based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations, and other assets such as patents, trademarks and channel relationships.

Product: Decisions (Cont.)– Product Line Decisions

• Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

• Stretching Decisions: Downward, Upward and Both ways (Price Vs. Quality)

– Product Mix Decisions• Product Mix is the set of all product lines and items that a particular seller

offers for sale to buyers.

• Dimensions: Width, length, depth and consistency.

– International Product Decisions

Product (Cont): Product Strategies

• New-Product Development • Strategy

• Process– Idea Generation, – Idea Screening– Concept Development & Testing– Marketing Strategy Developments– Business Analysis– Product Development– Test Marketing – Commercialization– Speeding-up New-Product

Development

• Product Life-Cycle Strategies• Introduction

• Growth

• Maturity

• Decline