3.3 Marketing Mix : Product Flashcards
Product
Good or service being produced and sold in the market
Process of developing new products
- Generate ideas
- Best ideas selected for market research
- Decide if it will be successful
- Develop prototype
- Test launch
- Full launch
Four P’s of the marketing mix
Place
Product
Price
Promotion
Disadv and adv of developing new products
Adv
USP (Unique selling point)
Risk is spread
Charge higher prices
Increased bran image
Disadv
Expensive research
Expensive investment
Customer may not want, fail in the market
Waste of resources if fail
Role of packaging
Protects product
Provides information
Helps customers recognise brand
Easier to store and transport
Suitable for the product
Eye-catching
Break-even Analysis
Shows the total costs and total revenue to see the profit made over time
Break-even is the point where there is neither profit or loss
Search up an image of it!
Role of product decisions in marketing mix
Product and packaging is the most important element in marketing mix
The looks, properties researched
Fulfil customer desires
Importance of branding
Higher quality
Better consumer confidence
Brand loyalty
Encourages repeated purchases
Consumer good and services
Purchasable items or services for people of the public
e.g. food, furniture, hairdresser, education
Producer goods and services
Goods produced or services made to help other businesses
e.g. machinery for other factories, advertising, office cleaning
Product Life Cycle (PLC) stages
Development
Introduction
Growth
Maturity
Saturation
Decline
Development (1st stage of PLC)
Prototype testing and research
No promotion
No sales
No advertising
Developed in secret usually
Growth (3rd stage of PLC)
Over time sales start to grow rapidly
High promotion
High advertising
Establish and maintain brand image
Prices reduced to compete with new competitors in market
Saturation (5th stage of PLC)
High competition but no new competitors as the market is saturated
Competitive pricing used
High stable levels of advertising
Pricing reduced for competition
Introduction (2nd stage of PLC)
Initial launch where sales grow slowly
High levels of promotion for new product
High advertising to attract
Establish brand image
Price skimming used if no competitors in market
Maturity (4th stage of PLC)
Sales slow and competition intensifies
Pricing strategies change to competitive
Lots of advertising for sales growth and profit
Decline (6th stage of PLC)
Sales decline as product lost appeal
Product may be withdrawn from market
Prices already reduced
Advertising reduced until stopped
How can businesses extend PLC?
Extension methods are
Introducing variations of product
New advertising campaign
Sell into new market/countries
Changing packaging
Small changes in product design
Sell through different retail outlets
