3. Marketing mix
• The set of marketing decisions that
management make to implement their
positioning strategy and achieve the
organisation’s objectives
• “The set of marketing tools that the firm uses
to pursue its marketing objectives in the
target market” (Kotler)
4. The four Ps
• Product - collection of features and benefits
that provide customer satisfaction
• Price - value perceived in the mind of the
consumer
• Promotion - marketing communications
• Place - covers location ,distribution, channels
and logistics
5. Alternatives to The 7 Ps
• The 4 Ps of product, price, promotion and place
PLUS
• People
• Process
• Physical evidence
• The 7Ps are more appropriate than the 4 Ps in the
marketing of services.
6. Products, Services & Experiences
Product is anything that can be offered in a
market for attention, acquisition, use, or
consumption that might satisfy a need or want
Service is a product that consists of activities,
benefits or satisfaction that is essentially
intangible and does not result in the ownership
of anything
Experiences represent what buying the product or
service will do for the customer
7. What is a Product?
• Anything that can be offered to a market for
attention, acquisition, use or consumption.
• Satisfies a want or a need and Includes:
Physical Products
Services
Persons
Places
Organizations
Ideas
Combinations of the above
12. Industrial products
products purchased for further processing or for
use in conducting a business
• Classified by the purpose for which the product is
purchased
– Materials and parts
– Capital
– Raw materials
Product and Service Classifications
14. Product line decisions
A product line is a group of products that are
closely related because they function in a similar
manner, are sold to the same customer groups,
are marketed through the same types of outlets,
or fall within given price ranges.
For example, Nike produces several lines of
athletic shoes and apparel, and Marriott offers
several lines of hotels.
15. Product mix
An organization with several product lines has a
product mix. A product mix (or product
portfolio) consists of all the product lines and
items that a particular seller offers for sale.
Colgate’s product mix consists of four major
product lines: oral care, personal care, home
care, and pet nutrition.
16. Product mix
An organization with several product lines has a
product mix. A product mix (or product
portfolio) consists of all the product lines and
items that a particular seller offers for sale.
Colgate’s product mix consists of four major
product lines: oral care, personal care, home
care, and pet nutrition.
17. Width - number of
different product
lines
Length - total number
of items
within the lines
Depth - number of
versions of each
product
Product Mix -
all the product
lines offered
Product Mix Decisions
Consistency
19. 19
New Products
A product that is essentially new.
Different from company’s existing products
Different from competitors
Minor improvements
Basis for meeting customer changing
needs.
20. 20
Why New Products Fail
• “Over Championing”
• Overestimated Demand
• Poor Design
• Poor Marketing Execution
• High Development Costs
• Strong Competitive Reaction
21. 21
New Product Development Process
Idea
Generation
Concept
Development
and Testing
Marketing
Strategy
Development
Idea
Screening
Business
Analysis
Product
Development
Market
Testing
Commercialization
22. 22
Customers Competitors Distributors Suppliers
Idea Generation is the Systematic Search for New
Product Ideas Obtained Internally From Employees
and Also From:
New Product Development Process
1: Idea Generation
23. New Product Development Process
Step 2. Idea Screening
• Process to spot good ideas and drop poor ones as soon
as possible.
• Many companies have systems for rating and screening
ideas which estimate:
– Market Size
– Product Price
– Development Time & Costs
– Unit Costs
– Rate of Return
• Then, the idea is evaluated against a set of general
company criteria.
24. 24
1. Develop New Product Ideas
into Alternative Detailed
Product Concepts
2. Concept Testing - Test the
New Product Concepts with
Groups of Target Customers
3. Choose the One That Has the
Strongest Appeal to Target
Customers
Step 3. Concept Development
25. 25
Part Three Describes Long-Term:
Sales & Profit Goals
Marketing Mix Strategy
Part Two Describes First-Year:
Product’s Planned Price
Distribution
Marketing Budget
Part One Describes Overall:
Target Market
Planned Product Positioning
Sales & Profit Goals
Market Share
Step 4. Marketing Strategy
26. 26
If No, Eliminate
Product Concept
Business Analysis
Review of Product Sales, Costs,
and Profits Projections to See if
They Meet Company Objectives
Step 5. Business Analysis
Step 6. Product Development
If Yes, Move to
Product Development
27. 27
7. Market Testing
Sales-
Wave
Research
Test offering trial to
a sample of
consumers in
successive
periods.
Simulated
Test Market
Test in a simulated
shopping environment
to a sample of
consumers.
Standard
Test Market
Full marketing campaign
in a small number of
representative cities.
Controlled
Test Market
A few stores that have
agreed to carry new
products for a fee.
Where the Product
and Marketing
Program are
Introduced into More
Realistic Market
Settings.
30. 30
Product life Cycle
• The stages of growth and sales in the life of a product.
or The various stages a product goes through from the
time of introduction until its eventual withdrawal from
the market.
Introduction
Growth
Maturity
Decline.
31. 31
Sales & Profit Life Cycles
Introduction Growth Maturity Decline
Time
Sales
&
profits
($)
32. 32
Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative or low
Create product awareness and trial
Offer a basic product
Usually is high; use cost-plus formula
Distribution High distribution network
Advertising
Create awareness among early
adopters and dealers
Summary of Characteristics, Objectives, & Strategies
Introduction Stage
33. 33
Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising sales
Average cost per customer declines
Rising profits
Maximize market share
Offer new product design (fighter brands),
extensions, service, and warranty
Increase Price
Distribution Increase number of distribution outlets
Advertising Build awareness and preference in the
mass market
Summary of Characteristics, Objectives, & Strategies
Growth Stage
34. 34
Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak sales
Low cost per customer
High profits, then lower profits
Maximize profits while defending
market share
Diversify brand and models
Price to match or beat competitors
Distribution Build more intensive distribution
Promotion Rely more on sales promotion
Summary of Characteristics, Objectives, & Strategies
Maturity Stage
35. 35
Maturity Stage
Company tries to increase consumption of
the current product.
Changing characteristics such as quality,
features, or styles to attract new users.
Company tries to improve sales by changing
one or more marketing mix elements.
36. 36
Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining sales
High cost per customer
Declining profits
Reduce expenditure and maintain,
reposition, harvest or drop the product
Phase out weak items
Cut price
Distribution
Go selective: phase out unprofitable
outlets
Advertising Reduce to level needed to retain
hard-core loyal customers
Summary of Characteristics, Objectives, & Strategies
Decline Stage
