Transcript 3.3.1 Product

3.3 MARKETING MIX
PRODUCT
P
PRICE
P
PROMOTION
P
PLACE
P
Marketing
Mix
Product
Price
Appearance
Function
Cost
Cost based
Competitor based
Consumer based
Promotion
Advertising
Sales promotion
Personal selling
Place
Retailers
Wholesalers
Distribution
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?
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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
Environment
Protection
Choice of Packaging
Depends on:
Cost Effective
Convenience
Design
Information
What packaging factors should
be considered for these
products?
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•
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•
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•
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.
The Product Life Cycle Diagram
Sales
• Sales
• Sales are low
• Product is
being designed
• Profits will be
negative
• Product may
be unknown
Development
Introduction
increasing
rapidly
•Sales reach
its highest point
• Similar
products enter
the market
• Sales falling
• Profits continue
•Price lowered to fall
•Rate of growth
• Profits will
Slows
reach their
highest at the
end of this stage •Competitors enter•Some
the market
businesses
my be forced
out of the
market
Growth
Maturity
Saturation
Decline
Time
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