The Marketing Mix

 Product: Variety, features, brand name, quality,

design, packaging and services.
 Price: List price, discounts, allowances, payment
period, and credit terms.
 Place: Distribution channels, coverage, logistics,
locations, transportation, assortments, and
inventory.
 Promotion: Advertising, sales promotion, public
relations, and personal selling.
 Important Terms
 Product Item
A specific version of a product
 Product Line
A group of closely related product items viewed
as a unit because of marketing, technical, or end-
use considerations
 Product Mix
The total group of products that an organization
makes available to customers
 Product Life Cycle
Introduction, growth, maturity, and decline
 Product Mix
The total group of products that an organization
makes available to customers
 Width
The number of product lines a company offers
 Length
The total number of items within the lines.
 Depth
The total number of versions of each product.
 Consistency
 Design Decisions: Will it be a supplement to
the features or will the features be designed
around a unique design.
 Quality Decisions: The quality of the product
needs is kept with the other elements of the
marketing mix. A high price can be charged if
the product has superior quality.
 Features Decisions: What will be the final
features of the product? Will they add to the
perceived and actual benefits of the product?
 Branding Decisions: As a brand can have the
power to generate instant sales as well cement
confidence in the product’s quality and
reliability.
 Creation of a new or different product that
offers innovative new benefits to the end user.
 This includes both the creation of an entirely
new product and modifications to an existing
product.
 These changes or new introductions may be
targeting a newly defined customer
requirement or a niche category in the
market.
Product development traditionally includes
the following steps:
 Alpha Tests / Evaluate Product Quality
 Beta Tests / Evaluate Customer Satisfaction
 Field Tests / Evaluate Feature Adoption
 Product Life Cycle

The progression

of a product
The Four Stages of the Product Life Cycle

R
u
p
e
e
s
 Stages of the product lifecycle
Development – high costs but no sales
Launch – high expenditure on promotion and
product development, low sales
Growth – sales increase and product should break
even
Maturity – sales stabilise, less expenditure on
promotion needed, revenue & profit should be
high
Decline – sales decline, extension strategies can be
adopted or the product withdrawn
 Extension strategies should maintain or increase sales.
 They include:
 Modifying the product
 Reducing the price
 Adding a feature
 Promoting to a
 different market
 or sector
 Managing Existing Products

 Developing New Products

 Product Differentiation Through Quality,

Design, and Support Services

 Product Positioning

 Product Deletion

 Organizing to Develop & Manage New Products

 Line Extension
 Development of a product that is closely
related to existing products in the line but
meets different customer needs
 Is a less expensive, low risk alternative
 May focus on the same or a new segment
 Can be used to counter
 competing products
 Many “new products” are
 really line extensions.
 GO Venture is an old game that let’s you
strategize your own business in terms of the
four P’s
 You will start a business selling a product of
your own choice
 Set your own prices
 Chose your location
 Chose to promote your items at certain times
of the week etc.
 Product Modifications
 A change in one or more characteristics of the
product and the elimination of the original
product from the product line.
 Product must be modifiable.
 Customer must be able to perceive
 modification has been made.
 Modified product more closely
 satisfies customers’ needs.
 Quality Modifications
 Changes in material or production processes related
to a product’s dependability and durability
 Reducing quality to offer a lower price to
customers
 Increasing quality to gain a competitive advantage

1st
 Functional Modifications
 Changes affecting a product’s versatility,
effectiveness, convenience, or safety; usually
requiring redesign of the product
 Visual Modifications
 Changes to the sensory appeal of a product such as
altering taste, texture, sound, smell, or appearance
 Benefits
 Enhances product mix
 Increases depth in product line
 Attracts new customers
 Increases market & Customer share
 Risks
 Expensive to develop
 Creates risk of market failure
 Loss of market share without new products
New product development
 High risk / high return
 Technological innovation
 Creative destruction
 What characteristics do you innovate
 location,
 flavor,
 price,
 size,
 experience
 ?????????
 Business analysis
 Commercialization of Product
 Concept development and testing
 Idea generation
 Market testing
 Marketing strategy development
 Product development
 Screening of Ideas
1. Idea generation
2. Screening of Ideas
3. Concept development and testing
4. Marketing strategy development
5. Business analysis
6. Product development
7. Market testing
8. Commercialization of Product
Seeking product ideas to achieve objectives
 Internal sources: marketing managers,
researchers, sales personnel, and
engineers
 External sources: customers, competitors,
advertising agencies, consultants, and
new-product alliances
Choosing the most promising ideas for further
review
 Concerns about cannibalization of existing
products
 Company capabilities to produce and
market the product
 Nature and wants of buyers
Seeking potential buyers’ responses to a
product idea
 Low cost determination of initial reaction
to product idea
 Identification of important product
 attributes and benefits
Assessing the potential of a product idea for the
firm’s sales, costs, and profits
 Does product fit in with existing product mix?
 Is demand strong enough to enter the market?
 How will introducing the product change the
market?
 Is the firm capable of
 developing the product?
 What are the costs for
 developing & marketing?
Determining if producing a product is feasible
and cost effective
 Construction of a prototype, or working
model
 Testing of the prototype’s overall
functionality
 Determining the level of product quality
 Branding, packaging, labeling,
 pricing, and promotion decisions
Introducing a product on a limited basis to
measure the extent to which potential
customers will actually buy it
 Sample launch of entire marketing mix
 Lessens risk of larger market failure
 Is expensive; simulated test marketing
 is an alternative
Deciding on full-scale manufacturing and
marketing plans and preparing budgets
 Modifications indicated by test marketing
are incorporated into the production
design.
 Marketing, distribution, and servicing
plans are finalized.
 Product roll-out occurs in stages to lessen
the risks of introducing the new product.
Product Quality
 The overall characteristics of a product that
allow it to perform as expected in satisfying
customer needs
 Level of quality is the relative amount of
quality a product possesses.
 Consistency of quality is the degree to which
a product
 has the same level of quality over time.
Product design
 How a product is conceived, planned &
produced
 Good design provides a strong competitive
advantage.
 Customers typically desire products with good
designs and that function well.
 Styling (physical appearance)
 Product features - specific design
 characteristics
(allow a product to perform certain tasks)
Customer services
 Human or mechanical efforts or activities
 that add value to a product
 Delivery and installation, financing,
 customer training, warranties &
guarantees, repairs, online product
information
 A competitive advantage
 when all other product features
 are equally matched by competitors
For any product to be successful, it needs to:
 Satisfy TARGETED customer needs or wants
 Be of the right quality -- higher price
 Be low cost --- in production and delivering
– to ensure better profit margins
 Be durable and attractive -- match the price
and the brand image
 Able to stimulate new needs
 What does the customer want from the
product?
 What hidden need does it address?
 What features does it need to have to meet
these wants and needs?
 Are there any overlooked features that can
add value?
 Are there any added features that add no
value?
 How will the product be used by the
consumer?
 Where will the product be used?
 What does the product look like? How big or
small? Colors and materials?
 What should the product be named?
 What the branding strategy will be?
 What will be the product’s USP?
 How will it be communicated to
customer/s?
 What will the cost of production be? Can the
features, benefits and branding bring in a
logical price to offset the cost and make a
profit?