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3.3 MARKETING MIX
PRODUCT PRICE
PROMOTION PLACEPP
PP
MarketingMix
Product Price Promotion
AppearanceFunction
Cost
Cost basedCompetitor basedConsumer based
AdvertisingSales promotionPersonal selling
Place
RetailersWholesalersDistribution
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?
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
Choice of PackagingDepends on:
Protection Environment
Cost Effective
InformationDesign
Convenience
What packaging factors should be considered for these
products?
• 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.
Sales
TimeIntroduction Growth Maturity DeclineDevelopmen
tSaturation
• Similar products enter the market
•Price lowered
•Some businessesmy be forcedout of the market
• Sales falling• Profits continue to fall
•Sales reach its highest point
•Rate of growth Slows
•Competitors enterthe market
• Sales increasingrapidly
• Profits will reach their highest at the end of this stage
• Sales are low
• Profits will be negative
• Product may be unknown
• Product is being designed
The Product Life Cycle Diagram
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