Marketing Mix Products Management of Marketing Higher Business
Marketing Mix - Products Management of Marketing Higher Business Management
Marketing Mix In order to market or sell its products successfully, a business must develop a strategy based on seven key elements. How these elements are combined in the marketing strategy is called the marketing mix.
Product ) e c i v r e s r o d o o g a ( m e t i l a u t c a d e n h a s s e n i s This is t u b e h t y b d e c u d o r p s i t a h t. t e k r a m a then sold in Products are at the heart of marketing The product needs to exist for other elements of the mix to happen
Product Differentiation • How do businesses make their product stand out? – Distinctive design – eg Dyson, Apple – Branding – eg Nike, Adidas – Performance – eg Mercedes, BMW
Branding involves choosing a word or symbol (or both) then registering them so that they can only be used on your products. • Branding distinguishes a product from its competitors (product differentiation) • Instantly recognisable by consumers • Often linked to quality and reliability • Can command a premium price • Aims to create an emotional selling proposition (ESP)
Brand Extension • When a business uses a brand name on a new product that has some of the brand’s characteristics • Examples include: – Dove soap and Dove shampoo – Mars Bar and Mars Ice Cream – Lucozade and Lucozade Sport
Task 1: What about Brands?
Product Life Cycle Products have a natural ‘lifespan’. Some are very short others are around for decades. The life of a product can be prolonged by using extension strategies. However all products go through a number of distinct phases. https: //www. youtube. com/watch? v=ob 5 KWs 3 I 3 a. Y
Product Life Cycle All products have a life span - just life us SALES Introduction Growth Maturity Decline • Sales are low • Profits will be negative • Sales increase rapidly • Profits will reach their highest point at the end of this stage • Sales reach their highest point • Profits will begin to fall as competition increases • Sales are falling • Profits continue to fall and may become negative TIME
Task 2: Product Life Cycle
Effects of Extension Strategies SALES Introduction Growth Maturity Extension TIME
Change the price Expand the range Add new features Extension Strategies New Advertising Find new markets Improve the product Change the packaging
Summary of Extension Strategies • Changing the product - size, colour, taste • Providing variants - Mars: funsized, yoghurt, ice cream, minisized, giant-sized • Altering the packaging for different market segments • Changing the price • Place - Altering the channels of distribution • Special promotions - offers, gifts, competitions
Case Study - Barbie Watch the film Product Life Cycle of Barbie. Identify the following: • Sales and profits of Barbie • How have Mattel kept Barbie relevant? • How have PESTEC factors impacted on Barbie? • What steps are involved in the development stage of an updated Barbie product? • How has Mattel used outsourcing? • How much profit is gained from each doll? https: //www. youtube. com/watch? v=_lv. M 8 v 36 k. Ts 10 mins
Product Portfolio or Product Mix is the range of products an organisation creates. Having a range allows: • Products or brands are fresh • Keep up-to-date with new trends • Bring out new products • Retire products in decline
Product Portfolios Product Line Portfolio • • • When one products success is then used to introduce “spin-off” products or closely related. These tend to be in the same market, eg clothing. Eg Disneys’ Frozen Diversified Product Portfolios • • Allows organisations to “test the water” in other markets that are separate from their core original business. Eg Virgin, Tesco
Diversification Product Portfolio • Involves having product for sale across completely different market segments • Spreads risk across the different markets
Boston Matrix
Task 3: Boston Matrix
PLC and Boston Box
Advantages of having a product portfolio • Businesses can spread risk over different markets. • Can meet the needs of different market segments and appeal to more customers. • Newer products can replace those at the end of the life cycle. • A range of products increases the awareness of the brand as a whole. • Easier to launch new products with a large existing portfolio. • Cash cows can fund other, riskier, ventures such as the marketing of Stars. • Stars allow a business to be market leader in one area which will improve the brand image overall. • Question mark products give businesses an opportunity to invest and grow in them. • Dogs can be divested to reduce losses
Disadvantages of having a product portfolio • High costs to research and develop so many products. • High marketing costs to promote so many products. • Bad publicity surrounding one product can affect the whole portfolio. • Resources assigned to new products may affect the performance of existing products. • Dogs can drain a business of profits unless they are sold off
Product Summary • New Product Development – steps in development and differentiation • Branding – brands, own brand, brand extensions • Product Life Cycle – stages (sales, profits, market share) & related business activities. Also extension strategies to extend the life of the product • Product Portfolio – Product line portfolio, diversified portfolio, Boston Matrix
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