Marketing Mix Elements
WEEK6
Marketing Mix
• These are tactical tools used to implement
strategies, engage customers and deliver
superior customer value
• The set of controllable tactical marketing
tools that the firm blends to produce the
response it wants in the target market ,
otherwise known as the 7 Ps
Marketing Mix – Traditional 4 ps
Modern Marketing
Customer value Cost
Communication
Convenience
Product
• Definition: anything that can be offered to a
market for attention, acquisition, use, or
consumption that satisfies a need or a want.
• Broad definition includes services
• Services – form of product that consists of
activities, benefits or satisfactions offered for
sale, essentially intangible and do not in
ownership of anything physical
Product
• Definition: anything that can be offered to a
market for attention, acquisition, use, or
consumption that satisfies a need or a want.
Needs, Wants
& Demands
Product levels
Product Levels
Core benefit/ customer value
• What is the customer really buying?
• Fundamental reason for purchasing
• Beyond the actual product, offers competitive
advantage
Actual product
• Benefits turned into an actual product and
service
• Product and service features, design, quality
level, brand name, packaging.
• i.e. Apple brand, IOS operating system,
features, packaging deliver the customer value
of staying connected
• It is the physical product a customer buys to
get the CORE BENEFITS.
Augmented product
• Additional products and services offered
around the core benefit actual product
• These are value-added services.
• Ways that create value and an overall
satisfying brand experience (after-sale
service, warranty ,installation ,return
opportunities, delivery and credit )
• i.e.. Apps, warranties and accessories
(dealers), iCloud , iTunes
Product Classifications
• Products differ according to purpose for
which they are purchased
• Consumer products – bought by final
consumers for personal consumption
– Convenience, shopping, specialty, unsought
products
Product classifications
Industrial products
• Products purchased for further processing or
for use in conducting a business.
• The distinction between a consumer product
and an industrial product is based on the
purpose for which the product is bought.
• There are three groups of industrial products
classified in terms of how they enter the
production process and their relative
costliness.
Industrial products
1. materials and parts - goods that enter the
manufacturers production completely
2. capital items- long-lasting goods that facilitate
developing or managing the finished product.
(Installations and Accessory equipment)
3. supplies and business services- short-term goods
and services that facilitate developing or managing
the finished product.
(maintenance and repair items and operating
supplies)
New Product Development
• New products are made in two ways:
1. Acquisition – buying a whole company, a
patent or a license to produce someone
else’s product .
2. New product development – development
of original products, product improvements
,product modifications and new brands
through the firm’s R&D efforts
New Product Development
• bring new solutions to consumers problems
• are a source of growth to companies
New Product Development
New Product Development
(1) Idea generation
• It is the systematic search for new
product- ideas .
• Major sources of new product ideas
include internal sources and external
sources such as customers, competitors,
distributors and suppliers .
New Product Development
(2)Idea screening
• screening new-product ideas in order to
spot good ideas and drop poor ones as
soon as possible .
New Product Development
(3) Concept development and testing.
• Product concept is a detailed version of the
new-product idea stated in meaningful
consumer terms .
• Concept testing calls for testing new-product
concepts with a group of target consumers to
find out if the concepts have strong consumer
appeal .
• For some concept tests, a word or picture
description might be sufficient .
New Product Development
(4) Marketing strategy development:
• It is designing an initial marketing strategy for
a new product based on the product concept .
(target market ,product positioning ,sales
market share, profit goals )
(5) Business analysis
• Involves a review of the sales, costs ,and profit
projections for a new-product to find out
whether these factors satisfy the company’s
objectives .
New Product Development
(6) Product development
• Developing the product concept into a physical
product in order to ensure that the product idea
can be turned into a workable product .
(7) Test marketing
• the stage of new product development in which
the product and marketing program are tested in
more realistic market settings .
(8) Commercialization
• Introducing a new product into the market .
Product Lifecycle
• The course that a product’s sales and
profits take over its lifetime
• Products are born, grow, mature and
decline
Product Lifecycle
Product Lifecycle
(1) Introduction stage :
• A stage in which the new product is first
distributed and made available for purchase .
• It is a period of low sales growth.
• Profits are nonexistent because of the heavy
expenses of product introduction.
• Examples of products at introduction??
• Implication to marketer??
Product Lifecycle
(2) Growth stage.
• It is a period of rapid market acceptance and
increasing profits.
• The early adopters will continue to buy and later
buyers will start following their lead.
• Profits increase during the growth stage as
promotion costs are spread over a large volume of
sales and as unit costs fall.
• Examples of a product at growth stage
• Implication to marketer?
Product Lifecycle
(3) Maturity stage
• It is a period of slow down in sales growth because the
product has achieved acceptance by most potential
buyers.
• Profits level off or decline because of increased
marketing outlays to defend the product against
competition.
• The maturity stage normally lasts longer than the
previous stages
• Examples of products at maturity??
• Implication for marketers??
Product Lifecycle
(4) Decline stage
• It is the period when sales fall off and profits drop
• Sales may drop to zero or they may drop to a low level
where they continue for many years .
• Sales may decline for many reasons, including
technological advances , shifts in consumer tastes and
increased competition .
• As sales decline ,some firms may withdraw from the
market .
• Examples of products at decline stage?
• Implication to marketers?
