Marketing Mix
Marketing Mix
• The marketing mix is the four key decisions that a business must take in order to
market products effectively.
• These four decisions are often called the Four Ps.
• describes all the activities which go into marketing products
Product
• This applies to the good or service itself – its design, features and quality.
New Product Development
Branding
• A brand is the name given by a business to its product or range of products.
• It allows a business to distinguish its products from those of its competitors.
• Brand image: the general impression of a product held by consumers.
• brand loyalty: customers they keep buying the same brand of a product instead of
trying other similar products.
• Branding Like A Boss (10 Best Brand Strategy Examples)
Benefits of branding
• consumers recognise their product more easily when looking at similar products
• their product can be priced higher than less well-known brands
• it is easier to launch new products onto the market because consumers already
know and trust the brand and so are more likely to try it than if it was from an
unknown brand – they have customer loyalty.
• It is the assurance of a standard quality that makes consumers confident in buying
branded products.
Packaging
• to protect the product
• to provide information about the product
• to help consumers recognise the product.
• The packaging might have a use once the product has been used up, for example a
coffee jar might be a storage jar.
• To keep the product fresh once the packaging has been opened, for example the
inside packaging of breakfast cereals.
• Increase business costs, firms increasingly moving towards use of recycled
materials to package the product.
The product life cycle
• the pattern of sales of a product from introduction to its withdrawal from the market.
Stages
• Research and development - First, a product is developed. The prototype is tested and
market research carried out before the product is launched on to the market. There are no
sales at this time.
• Introduction stage – the product is introduced into the market.
• Sales are low.
• The product might be making a loss in this stage because of the cost of heavy advertising
to gain product recognition.
• Informative advertising is used until the product becomes known.
• Price skimming may be used if the product is a new development and there are no
competitors.
• No profits are made at this point as development costs have not yet been covered.
Stages
• Growth stage – the product is becoming better known to consumers.
• Sales are increasing.
• The product usually starts to earn profit during this stage.
• The advertising is changed to persuasive advertising to encourage brand loyalty.
• Prices are reduced a little as new competitors enter the market and try to take some
customers.
• Profits start to be made as the development costs are covered.
Stages
• Maturity stage – sales are no longer growing fast but are not falling.
• This is the most profitable stage in a product’s life cycle
• Sales now increase only slowly.
• Competition becomes intense and pricing strategies are now competitive or
promotional Pricing.
• A lot of advertising is used to maintain growth.
Stages
• saturation point
• Sales stabilise at their highest point.
• Competition is high but there are no new competitors.
• Competitive pricing is used.
• A high and stable level of advertising is used
• profits start to fall as sales are static and prices have to be reduced to be
competitive.
Stages
• Decline stage – sales are falling.
• The product eventually becomes unprofitable and is withdrawn from the market.
• prices have been reduced so far that it becomes unprofitable to produce the product.
• Advertising is reduced and then stopped.
hi-tech product life cycle
product life cycle for
fashion clothing
Extension strategies
•
• Finding new markets for the product –
• Finding new uses for the product –
• Adapting the product or the packaging to improve its appeal to consumers
• Increased advertising and other promotional activities
How stages of the product life cycle influence marketing decisions
How stages of the product life cycle influence marketing decisions
Practice answer
• XYZ produces popular chocolate bars and sells them to supermarkets. Its best-selling
brand is ChocDelight. It is wrapped in expensive packaging and is sold as a luxury
chocolate product. This best-selling chocolate bar has had high and steady sales for the
last five years. However, recently sales have started to fall as it has now reached the
decline stage of the product life cycle.
• Define ‘brand’. [2]
• Identify two elements of XYZ’s marketing mix other than product. [2]
• Outline two characteristics of the packaging of the chocolate bars. [4]
• Explain two possible reasons why XYZ’s chocolate bars are successful. [6]
• Recommend to managers how to respond to the falling sales of a product. Justify your
answer. [6]