Chapter 12 Marketing mix: product Flashcards
What is the marketing mix
Describes all the activities which go into marketing a product or service. Includes the product, price, place and promotion
4Ps of the Marketing mix
Product
Price
Promotion
Place
What is product (marketing mix)
Applies to the good/service itself.
Addresses the design, features and quality of the product.
Most imp P
What is price (marketing mix)
The price of the product/service itself.
Must cover all costs
What is place (marketing mix)
Refers to the channels of distribution which are selected.
How and where your products get sold
What is promotion (marketing mix)
How the product is advertised/promoted.
How people are made aware of the product.
Types of product
Consumer good
Consumer service
Producer good
Producer service
What is a consumer good
Goods used to satisfy individual wants and needs which are consumed by the consumer themselves.
What is a consumer service
A service that is directly consumed by the consumer themselves.
Eg: house cleaning
What is a producer good
Goods that are produced for the production of other goods.
Eg: Machinery:
What is a producer service
Services that a business provides for other businesses.
Characteristics of a successful product
Shouldn’t be difficult/expensive to produce.
The quality of the product should be appropriate for the brand image
The product should be unique or have a unique feature.
The product needs to satisfy consumer wants and needs.
Stages of product development
Generate ideas
Select the best ideas for further research
Decide if the company would be able to sell enough
Develop a prototype
Launch the product in a small area
Large scale launch if the small one was successful
Ideas, selection, sell, prototype, test, launch
ST LISP
Generate ideas stage (1) - product dev
Brainstorm within the firm
Decide if company can sell enough (3) - product dev
Compare the price of the product to the cost of production
Develop a prototype (4) - product dev
Gives insight into the processes of production, the requirements, etc.
Launch product in a small area (5) - product dev
Small scale launch/pilot test to see the reaction of the customers
Full launch of product (6) - product dev
Large scale launch
Benefits of creating a new product
if the product has a USP - can lead to more market share in new or existing markets.
Allows business to diversify
What is a USP
Unique selling point, a special feature of a product that differentiates itself from the products of competitors.
Costs of creating a new product
Market research cost
Trial costs
If the target market is wrong then wont make much money
Company image may take a hit if product fails to satisfy customer needs and meet expectations
What is a brand name
Unique name of a brand that distinguishes it from other brands
What is brand loyalty
Consumers keep buying the same brand again and again instead of choosing a competitor’s brand
What is a branding
Process where a business makes itself known to the public and differentiates itself from competition
What is a brand image
Identity given to a product which gives it a personality of its own and distinguishes it from competitors.
Imp of branding
Influences the public perception of a firm and its products
People may purchase the brand and the lifestyle along with the product
What is packaging
Physical container or wrapping for a product. Used for promotion and selling appeal
Characteristics of good packaging
Protects the product Easy to transport Easy to open and use Suitable for product to fit in Eye-catching Innovative Carries info about the product Promotes the brand image
What is the product life cycle
Describes the stages a product will pass through. Includes the development, introduction, growth, saturation, maturity and decline stages
Stages of product life cycle
Development Introduction Growth Maturity Saturation Decline
What is the development stage
sales at this stage
The product is developed. Prototype is created and market research is carried out before product is launched.
No sales
What is the introduction stage
Initial launch of product in the market.
Consumers are discovering the product
Almost no sales
What is the growth stage
Stage at which sales grow rapidly, profits grow rapidly
Business can cover the cost of development and production now
Use more informative advertisements since customers are finding out about the product.
Competition starts to enter the market
What is the maturity phase
Sales will grow at a slower pace now. By now there's a lot of competition Competitive or promotional pricing is used Profits are at their peak Informative advertising is used
What is the saturation phase
Sales stabilize at their highest point.
What is the decline phase
Sales start to reduce
Product has lost its appeal and is withdrawn from the market
What is an extension strategy
Way of keeping a product at the maturity stage and extended in the product life cycle
Some extension strategies
Introduce new variations of the same product
Small changes in colour, design, packaging
Sell through additional, different retail outlets
Sell into new markets
Introduce a new and improved version of the same product
Use a new ad campaign
