3. Explain why the balance of the marketing mix is as important as any single element.

marketing objective and marketing mix vary across the PRODUCT TYPE and Product Life Cycle
PRODUCT LIFE CYCLE
Products pass through a series of stages. Successful products progress through four basic stages: (1)
Introduction; (2) Growth; (3) Maturity; and (4) Decline.
The product life cycle concept provides important insights about developments at the various stages of
the product's life. Knowledge that profits assume a predictable pattern through the stages and that
promotional emphasis should shift from product information in the early stages to product promotion
in the later stages should allow the marketing manager to improve planning.
=======================================
PRODUCT LIFE CYCLE BENEFITS

Here is a brief description of what is expected to take place in the stages of the life cycle:
1. Initiation starts with the initial conception or discovery of the product idea and runs until it has
been evaluated, has become specific, and has been approved for development.
2. Development covers the various activities that transform an abstract product idea into a concrete
prototype model of the product (if it is a tangible good) that can be manufactured.
3. Market plans and tests is our term for the final gestation phase, in which the product would pass
its last tests and everything be ready for commercialising it.
4. Introduction starts when the offering is made available to buyers, probably on a limited scale, and
continues as it is tried by innovators and experiences show slow sales growth.
5. Growth begins when numerous tryers like the product, word of its virtues spread, and the product
sales "take off". Since the product is not established until this takes place, we include it in this chapter
of "evolving products6. Maturity comes eventually, for the halcyon days of sharply rising demand
vanish when most potential buyers have become actual customers. This may be a very long period
during which demand decelerates and then reaches a plateau.
7. Decline sets in persistently when the product eventually becomes obsolete. When it actually starts
to toboggan, it is time to give the product a merciful death and burial.
The marketing strategist should never assume that the PLC operates inexorably, but should rather
examine a brand's or product's actual position carefully. Further a serious effort should be made to
find a winning strategy can revive a slumping demand, rather than summarily abandoning the
possibility. In that context, the PLC does pose a hypothesis of product or brand behaviour that is
useful for sales forecasting. It also enables us to clarify strategies in terms of their timeliness.
==============================================
WHY YOU SHOULD USE THE PRODUCT LIFE CYCLE CURVE
FOR ANALYSIS
The product life cycle curve can be extremely important in generating strategist, and it should be
monitored and controlled by the marketing manager. This is necessary due primarily to five reasons:
1 . Rapid Maturity of Products

2.
3.
4.
5.

Life Cycle Product Mix

Strategic Implications
Product Planning
Changing the Life Cycle Curve

=============================================
THE PRODUCT LIFE CYCLE
Successful products progress through four basic stages: Introduction. Growth. Maturity and Decline.
This progression is known as the Product Life Cycle.
1.INTRODUCTION
The company's objective in the early stages of the product life cycle is to stimulate demand for the
new market entry. Since the product is not known to the public, promotional campaigns stress
information about its features and benefits. They also may be directed toward marketing
intermediaries in the channel to induce them to carry the product.
In this phase, the public becomes acquainted with the merits of the product and begins to accept it.
Losses are common during the introductory stage due to heavy promotion and extensive research and
development expenditures.
However, the ground is being laid for future profits. Companies expect.to recover the costs and to
begin earning profits when the new product moves into the second phase of its life cycle the growth
stage.

2.GROWTH
Sales volumes rise rapidly during the growth stage as new customers make initial purchases and early
buyers re purchase the product. 'Word of mouthl and advertising induce hesitant buyers to make trial
purchases.
As the company begins to realise substantial profits from its investment during the growth stage, the
product attracts competitors.
Success breads imitation and other companies rush into the market with competitive products. The
majority of firms in a particular market enter during the growth stage.

3.MATURITY
Industry sales continue to grow during the early part of the maturity stage, but eventually they reach
a plateau as the backlog of potential customers is exhausted. By this time, a large number of
competitors have entered the market, and profits decline as competition intensifies.
In the maturity stage, differences among competing products diminish as competitors discover the
product and promotional characteristics most desired by the market. Heavy promotional outlays
emphasise subtle differences among competing products, and brand competition intensifies.
In this stage, often available products exceed industry demand. Companies attempting to increase
their sales and market share must do so at the expense of competitors.

As competition intensifies, the competitors tend to cut prices in an attempt to attract new buyers.
Even though a price reduction may be the easiest method of inducing additional purchases, it is also
one of the simplest moves for, competitors to duplicate.
Reduced prices result in decreased revenues for all firms in the industry unless the price cuts produce
enough increased purchases to offset the loss in revenue on each item sold.

4.DECLINE
In the final stage of the product's life, innovations or customer preferences bring about an absolute
decline in industry sales.
Sales and profits decline and companies begin to leave the industry in search of more profitable
products.
========================================================
FOR EFFECTIVE MARKETING EFFORTS YOU
WORK WITH
PRODUCT LIFE CYCLE

1.INTRODUCTION
**ORGANISATION CONDITIONS
-High Costs
-Inefficient Production Levels
-Cash Demands HIGH
-----------------**ENVIRONMENTAL CONDITIONS
-Few or No Competitions
-Limited Product Awareness and Knowledge
-Limited Demand
-------------------------**MARKETING EFFORTS
-Stimulate Demand
-Establish High Price
-Offer Limited Product Variety
-Increase Distribution
-----------------------------===============================
2.GROWTH
**ORGANISATIONAL CONDITIONS
-Smoothing Production

-Lowering Costs
-Operation Efficiencies
-Product Improvement Work
---------------------------------**ENVIRONMENTAL CONDITIONS
-Expanding Markets
-Expanded Distribution
-Competition Strengthens
-Prices Soften a Bit
--------------------------------**MARKETING EFFORTS
-Cultivate Selective Demand
-Product Improvement
-Strengthen Distribution
-Price Flexibility
-----------------------------------=====================================
3. MATURITY

**ORGANISATIONAL CONDITIONS
A. EARLY MATURITY
-efficient scale of operation
-production modification work
-LOW profit
B. LATE MATURITY
-product standardization
-Decreasing Profits
-----------------------------**ENVIRONMENTAL CONDITIONS
A. EARLY MATURITY
-slowing growth
-strong competition
-expanded market
-heightened competition
B. LATE MATURITY
-Faltering demand

-fierce competition
-shrinking number of competitors
-established distribution pattern
----------------------------------**MARKETING EFFORTS
A.EARLY MATURITY
-Emphasise Market Segmentation
-Improve Service and Warranty
-Reduce Prices
B. LATE MATURITY
-ultimate in market segmentation
-competitive pricing
-retain distribution
-------------------------------===================================
4.DECLINE
**ORGANISATION CONDITIONS
-Permanently Declining Demand
------------------------------**ENVIRONMENTAL CONDITIONS
-Reduction of Competitors
-Limited Product Offerings
-Price Stabilisations
---------------------------**MARKETING EFFORTS
-Increase Primary Demand
-Profit Opportunity Pricing
-Prune and Strengthen Distribution
-------------------------------=======================================
EXAMPLE OF MARKETING PROGRAM FOR
STAGES IN PRODUCT LIFE CYCLE

A.INTRODUCTION.
1.MARKETING OBJECTIVE
-successful entry in the market.
2.SALES
-increase sales.
3.CUSTOMERS

-identify customer segments

4.ENVIRONMENT
-Comply With External Regulations
& Accepted Values
5.PRODUCT
-Assure High Quality
6.PRICE
-use cost plus strategy
7.PROMOTIONS
-build product awareness
8.DISTRIBUTION
-build and channels
==================================
B. GROWTH.
1.MARKETING OBJECTIVE
-gain market share
-increase profitability
2.SALES
-increase / maximize sales volume.
3.CUSTOMERS
-determine customer acceptance.
4.ENVIRONMENT
-determine channel responses.
5.PRODUCT
-offer extensions or value added like service.
6.PRICE
-penetrate deeper into the market
7.PROMOTIONS
-induce trial.
8.DISTRIBUTION
-use selective distribution
-------------------------------------------------------====================================
C.MATURITY.
1.MARKETING OBJECTIVE
-consolidate market share
-maximize profit.
2.SALES
-maximize sales.

3.CUSTOMERS
-determine re-purchase rates.
4.ENVIRONMENT
-monitor competitive activities
5.PRODUCT
-diversify the brands or models
6.PRICE
-price war with competitors
7.PROMOTIONS
-stress favourable evaluations
8.DISTRIBUTION
-more intensive distribution
What is Marketing Mix?
Description
The Marketing Mix model (also known as the 4 P's) can be used by marketers as a tool to assist in
implementing the marketing strategy. Marketing managers use this method to attempt to generate the
optimal response in the target market by blending 4 (or 5, or 7) variables in an optimal way. It is
important to understand that the Marketing Mix principles are controllable variables. The Marketing
Mix can be adjusted on a frequent basis to meet the changing needs of the target group and the other
dynamics of the marketing environment.
P 1 --- Product
Product
Marketing is about identifying,
anticipating and satisfying customer
needs. You need to be sure that your
products and services continue to meet
your customers. needs.
1. Carry out simple research by
asking your customers .
_ What they think of each
product/service
_ How satisfied are they
with the quality
_ How satisfied are they
with any support services
you may provide
_ How effective it is in
meeting their needs
_ How they see their needs
changing in the short and
long term future
2. Carry out step 1 for each product
or service you offer
3. Have a system for collecting and
analysing feedback from your
customers so that ideas are fed into
a new product development process

that is ongoing.
4. Ask yourself what stage of the
product life cycle your products or
services have reached. The .product
life cycle. is one way of looking at
how the marketing mix links
together. Products are said to go
through stages . an introductory
stage, a growth stage, a mature
stage and a decline stage. At each
stage a slightly different mix is
appropriate . see the .What you
need to know. section of this
material for more information.
5. Analyse the profitability of each
product/service you offer. For more
information on calculating this, take
a look at the 10-minute 80/20 Rule.
Which products/services make the
biggest contribution or provide the
highest profitability? What support
services do you offer with each
product? Could it be improved,
adding value with little cost?
Historically, the thinking was: a good product will sell itself. However there are no bad products
anymore in today's highly competitive markets. Plus there are many laws giving customers the right to
send back products that he perceives as bad. Therefore the question on product has become: does the
organization create what its intended customers want? Define the characteristics of your product or
service that meets the needs of your customers.
Functionality; Quality; Appearance; Packaging; Brand; Service; Support; Warranty.
--------------------------------------------------------------------------------------------------------------P 2 --- Price
Price
Price generates profit so is an
important element of the mix. You
need to consider 1. What your target group of
customers will be prepared to pay
for your product or service. It is
important not to set the price too
low as customers may think there is
something wrong with the product.
Equally, if you set the price too
high, customers may think that it
is too expensive for the benefits
offered. Think about how you have
.positioned. your product in terms
of quality. This will help you to
assess how to price it.
1. What it costs you to produce it.
This will show you what you need
to charge and not what you could
or should charge. However, if you

do not calculate what it costs you

to produce your product correctly,
the more you sell, the more you
will lose. Don.t forget to make an
allocation for costs such as selling
which are usually treated as fixed.
(See item 1 for more information.)
3. What your competitors charge.
Look at your competitors. web sites,
or simply phone them and ask for
a price list or quotation.
How much are the intended customers willing to pay? Here we decide on a pricing strategy - do not let
it just happen! Even if you decide not to ask (enough) money for a product or service, you must
realize that this is a conscious decision and forms part of the pricing strategy. Although competing on
price is as old as mankind, the consumer is often still sensitive for price discounts and special offers.
Price has also an irrational side: something that is expensive must be good. Permanently competing
on price is for many companies not a very sensible approach.
List Price; Discounts; Financing; Leasing Options; Allowances.
---------------------------------------------------------------------------------------------------------------------------P 3 --- Place
Place
.Place. is the means of distribution
you select depending on the type of
product or service you are marketing.
Your choice will impact on your pricing
and your promotion decisions.
1. Are the customers for your
products and services consumers or
businesses? If they are consumers
you will have three main options .
_ Selling to wholesalers who will
sell to retail outlets who will sell
on to the consumer
_ Selling direct to retail outlets
_ Selling direct to the customer
If your customers are businesses you
will probably sell to them direct
through your own sales force.
2. If you sell through wholesalers and
retailers, remember when you price
your products that they will each
want their own mark-up to cover
their overheads. You will also need
to promote your products and
services to all members of the
channel. Wholesalers and retailers
will have to be persuaded to stock
your product and end customers
to buy them.
3. If you are selling to businesses you
will have to cover the cost of a sales
force. This can be an expensive
overhead and will again impact

on your pricing.
Available at the right place, at the right time, in the right quantities? Some of the recent major
changes in business have come about by changing Place. Think of the Internet and mobile
telephones.
Locations; Logistics; Channel members; Channel Motivation; Market Coverage; Service Levels;
Internet; Mobile.
----------------------------------------------------------------------------------------------------------------------------------------P 4 --- Promotion
Promotion
The promotional mix is made up
of 5 elements:
_ advertising
_ sales promotion
_ public relations
_ direct marketing
_ personal selling
The combination of tools you use
depends on the budget you make
available, the message you wish
to communicate and the group of
customers you are targeting
(How) are the chosen target groups informed or educated about the organization and its products?
This includes all the weapons in the marketing armory - advertising, selling, sales promotions, Direct
Marketing, Public Relations, etc. While the other three P's have lost much of their meanings in today's
markets, Promotion has become the most important P to focus on.
Advertising; Public Relations; Message; Direct Sales; Sales; Media; Budget.
---------------------------------------------------------------------------------------------------------P 5 --- People
People
The people employed in your
organisation will determine the quality
of service your customers receive. This
is truer for services, but also impacts on
businesses making tangible products.
Happy, skilled and motivated staff make
happy customers. They are more likely
to think about the customer and deliver
good customer service if they are well
trained and are recruited for their
positive attitude to customers.
You can achieve a competitive
advantage over your competitors
through offering a high level of
pre-sales and after-sales support and
advice. Again, this can impact on the
price you set, as customers are likely to
be prepared to pay more for the service
they receive but there may be a higher
cost for you to take into account.
Identify those staff who come into
contact with customers, either face-toface
or by phone.

1. Carry out a task analysis of what

they do in terms of customer
contact.
2. Involve your staff in setting
standards for customer service.
For more information on customer
service, look at the 10-minute
Customer Service Programme.
3. Prioritise training needs
for these staff and provide
appropriate training
An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting
the right staff and training them appropriately in the delivery of their service is essential if the
organisation wants to obtain a form of competitive advantage. Consumers make judgements and
deliver perceptions of the service based on the employees they interact with. Staff should have the
appropriate interpersonal skills, aptititude, and service knowledge to provide the service that
consumers are paying for. Many British organisations aim to apply for the Investors In People
accreditation, which tells consumers that staff are taken care off by the company and they are trained
to certain standards.
----------------------------------------------------------------------------------------------------------P 6 --- Process
Process
The processes involved in delivering
your products and services to the
customer have an impact on the way in
which your customers perceive you.
1. Look at all the processes involved in
getting your products to the
customer. Start with the
identification of prospects and work
through to after-sales support. Does
any stage cause a delay? How can
you improve this?
2. Are your customers kept informed
about what is happening?
3. Do your staff keep their promises to
customers?
4. How effectively are you handling
customer complaints?
Refers to the systems used to assist the organisation in delivering the service. Imagine you walk into
Burger King and you order a Whopper Meal and you get it delivered within 2 minutes. What was the
process that allowed you to obtain an efficient service delivery? Banks that send out Credit Cards
automatically when their customers old one has expired again require an efficient process to identify
expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer
loyalty and confidence in the company.
-----------------------------------------------------------------------------------------------------------P7 --- Physical Evidence
Physical Evidence
Physical evidence is a term used to
describe the type of image that your
business portrays through its physical
presence, namely its premises, the
appearance of its staff, its vehicles, etc.

When customers do not have anything

that they can touch, see or try before
they buy, they are more likely to assess
you by the image you put across. It is
therefore particularly important if you
offer services rather than tangible
products.
1. How tangible is the product you
market? If it is heavily dependent on
the service element (for example, a
restaurant, or hotel, or window
cleaning service, or hairdressing)
then you should pay particular
attention to this element of the mix.
Even if you are a manufacturer, this
element is important if customers
visit your premises.
2. Ensure that the image portrayed by
your organisation is consistent with
the type of product or service you
offer.
3. Look at your reception area, your
car park (are there spaces for
visitors near to the entrance), the
appearance of your delivery staff or
customer service staff, that
condition of your vehicles, etc.
Where can you make
improvements?
Where is the service being delivered? Physical Evidence is the element of the service mix which allows
the consumer again to make judgements on the organisation. If you walk into a restaurant your
expectations are of a clean, friendly environment. On an aircraft if you travel first class you expect
enough room to be able to lay down!
Physical evidence is an essential ingredient of the service mix, consumers will make perceptions based
on their sight of the service provision which will have an impact on the organisations perceptual plan
of the service.
==========================================================