Product & the

Tuesday 27. Sep 2016

marketing mix
Learning
objectives:
£ I can explain how
'Product' fits into the
marketing mix

££ I can analyse what

make a product 'value
for money'

£££ I have used product

portfolio analysis to
make judgments about
specific products
The marketing What were the most valuable brands
mix is made up of worldwide in 2011?
several elements.
The product itself
is a crucial
element of the
mix. Many
marketing
specialists argue
that the product
is
the most
important
element of the
marketing mix
because is it the
product that
directly meets
customer
needs.You need
to be aware of:
* The influences
on the
development of
new goods and
services
* Unique Selling
Point/Propositions
(USP)
* Product
Portfolio Analysis
* The product life
cycle
Analysing Beauty products
the product
The product can
be analysed on
three levels:

1. The core
benefit it
provides - what
does it actually
do?
Link to BBC article
2. The
tangiable
product - the
physical
dimensions,
what does it
look like, is it
reliable?

3. The
additional
benefits - what
guarantees are
given to the
customer, what
are the brand
values and
what do they
convey to the
buyer?

Why is product
differentiation
important?
USP - is a feature of
a product that
makes it distinctive

Making a successful
product
A successful product is designed to
meet customer requirements.
These requirements may be
identified through market research.
The design of the product should
take into account the production
process. A well designed product
can save on costs, can be made
easily to a consistent quality and
meets the needs of customers very
precisely.
If a firm takes its time to develop a
product the chances are that it will
have longer term success.
Ben & Jerry's have had their fair
share of failures over the years,
click the picture on the right to see
their full 'graveyard' of flavours.

Analysing the existing position

When deciding on what marketing actions to take, such as whether to invest
in developing a new product, a firm will want to examine its existing position.
Only by assessing how its products are doing will it be able to decide what to
do next.
To analyse its position, a firm may make use of techniques such as the
product life cycle and product portfolio analysis (PPA)
The
product
life cycle
The product
life cycle
traces the
path of the
sales of a
product over
its life. The
typical path
for a product
can be divided
into five
stages.

1. The
research and
development
stage

2. The
introduction
(launch)
stage
 3. The
growth
stage

4. The
maturity and
saturation
stage

5. Decline

Definition: Product life cycle shows the sales of a product over its lifetime
The Segway, too fast for the pavement but not safe
enough for the road!
Capacity measures the
maximum possible output a
business can produce with its
given resources. An extension
strategy occurs
Capacity utilisation when marketing
measures the existing output activities are changed
as a percentage of the to prevent sales from
maximum possible output falling
What do you
think?
Can you remember
any products that are
not on sale anymore?
Why do you think they
were taken off the
market?
What new products
have been launched
recently? Do you think
they will be
successful? How long
do you think they will
be onsale? Why?

For example...
The Cadburys Wispa,
origionally launched in
the 1980s was
eventually
discontinued due to
falling sales and loss
to customers to
competitors such as
Aero.
However following an
internet campaign and
large public demand,
in 2007 Cadburys re-
launch the Wispa.
One step
further...
the PLC

The
cashflow of
a business
at the start
of a
Revenue, profit and cost during the product life cycle
product's
life cycle is
likely to be
negative.
This is
because
cash has to
be spent
researching
and
developing
the product
before any
sales have
occured.
Even when
the product
 is launched,
the firm is
likely to be
spending
more
money at
first to
promote it
than is
coming in
as revenue.
This means
the
business
will need to
monitor its
cashflow
effectivly in
the earcly
stages to
make sure
it does not
run out!

Do you know what these brands have in common?

 Product portfolio
analysis
Most firms have more than one
product, some have hundreds.
The range of products and
services a firm has is called its
'product portfolio'.
As part of the planning
The Boston Consulting Group Matrix (BCG), one of the most famous
process, a business will
models for product portfolio analysis examine the position of these
products in their markets.

Product portfolio analysis

examines tha market position
of a firm's products.
The Boston matrix is a method
of product portfolio analysis
that examines the products of
the business in terms of their
market share and market
growth.
One step
further...
the Boston
matrix
With an
appropriate mix
of products, the
cash cows can
be used to
finance the
development of Profits generated from cash cows can be used to fund products in other areas

question marks
and turn them
into stars: this
way the firm
uses money
from established
markets to enter
new markets
and so protects
its future.
Product portfolio
analysis,
therefore,
provides a good
basis for
effective
marketing
planning:
*Dog products
can be sold off
or production
and sales
halted.
* Star products
may be invested
in to maintain
their position.
* Cash cows
may be 'milked'
to provide
funds.
* Question
marks may be
protected
The new
product
developmen
t process

As you can see

from the
diagram
opposite,
developing a
new product
requires many
different skills,
including
marketing and
operations.
Often, new
product
development
teams will be
cross functional,
meaning that
they include
employees from
different
departments so
that the idea is
examined from
different
perspectives.
Discontinued
products
There are plenty of 'epic
failures' in the business
world. click the picture
right to bring up a list of
discontinued products.

Why are they no longer on

sale?

Was it the product its self

or a combination of other
Some businesses fail to see the flaws in their marketing
elements of the marketing
mix?

What could you have done

differently to save these
products from extincion?

Exam practice
BUSS2 Jan 2010 - Q1c