The Marketing Mix: Product

What is the marketing mix?

The marketing mix refers to the different elements involved in marketing. It describes all the activities that go into marketing a product or service. These elements are often called the four Ps.

The 4 Ps of the marketing mix

• Product: The product is the good or service being produced and sold in the market. This element consists of all the features of the product and its packaging.
• Price: The price element refers to the amount of money a producer is willing to sell a product.
• Place: The place element refers to where the product is sold and the whole distribution channel.
• Promotion: The promotion element refers to how a producer or firm will educate the consumers about their product. This element revolved around the advertising and ‘promotion’ of that product.

Importance of the marketing mix

The marketing mix is significantly important to a business. Understanding and correctly structuring the market mix of a product helps a business understand the consumer’s wants, and the market in great detail. This helps the producer make the right decisions. If the business correctly structures the marketing mix so that none of the elements contradict one another is key to a successful product launch and growth. If each element of the marketing mix is correctly aligned, then the product has a high chance of being successful.

What is a successful marketing mix?

• It satisfies the existing needs and wants of the customers
• It can stimulate new wants from consumers
• Its design – performance, reliability, quality, etc. should all be consistent with the product’s brand image
• It is distinctive from its competitors and stands out
• It is not too expensive to produce, and the price will be able to cover the costs

Types of products

• Consumer Product: A consumer product is a product that satisfies a direct consumer’s wants. It is bought by the consumers for their own use. These may be durables or non-durables.
• Consumer Services: A consumer service is a service that satisfies a direct consumer’s want. It is bought by consumers for their own use. Example car cleaning
• Producer Products: A producer product is a product that is bought by businesses to be employed as factors of production to produce other products or services.
• Producer Services: A consumer service is a service that is bought by businesses to produce products and services. 

The Production Process

Product development is the process of developing a new product.

The process begins with the generation of ideas. This is when a firm brainstorms ideas for new products, the business evaluates market research, to identify gaps in the market and think of products to create.

The next step is the selection of the best idea for further research. The best ideas are chosen for further evaluation and more analysis.

After all final research has been completed, the business must decide whether or not the product will be successful, and whether the business will be willing to produce the product.

After the product idea has been accepted by the business, a prototype is developed, this gives guidance to the operation department to see how to go about manufacturing the product.

A prototype also helps a business to understand what could be possible drawbacks of the product and what may be ways to tackle these drawbacks.

After manufacturing starts, the business launches the product in a small part of the market to see how well the product does, how successful it is. This is done so that the business does not overcommit to its production only for it to be unsuccessful.

Finally, the business establishes a full launch for the product in the target market.

Brand Image and Loyalty

What is a brand image (and why is it important)?

Brand image is an identity given to a product that differentiates it from competitors’ products. A brand image often consists of a brand name or unique name given to the product that distinguishes it from other brands. A strong brand image assures the customers of a high-quality, reliable, useful product. This increases the possibility that consumers would opt for that product.

What is brand loyalty?

Brand loyalty is when consumers keep buying the same brand again and again instead of choosing a competitor’s brand. 

What is packaging (and why is it important)?

Packaging is the physical container or wrapping for a product. It is also used for promotion and selling appeal. Selling a product in the right packaging is quite important. Packaging has several important functions. A product’s packaging protects the product, it provides valuable information about the product, and helps consumers to recognize the product.

The Product Life Cycle

What is the PLC?

The product life cycle refers to the stages a product goes through from its introduction to its retirement in terms of sales. The product life cycle of a product is made up of 4 stages:

1. The introduction: This is when the product is first launched to the market, sales are not sky-high as not all consumers are educated about the product. Price skimming is often used here. No profits are made as initial development costs need to be refurbished.
2. The Growth: In the second stage of the PLC, the sales begin to grow quickly, large advertising campaigns are often seen here. Brand loyalty is created here, prices drop here because more competitors enter the market, and profits begin to be generated with initial costs being covered.
3. The Maturity: The increase in sales slows down, the market becomes more competitive, leading to promotional prices, and advertising is still prevalent, but profits slowly reduce.
4. The Decline: This is the last stage of a standard PLC, the sales of the product begin to drop(this may be due to lose in appeal or introduction of new products). Advertising is slowed and eventually stopped, and if no extension strategy is used, the product is finally withdrawn.

How does a PLC influence marketing decisions?

Analysing the sales of a product can help a business understand at what stage of the PLC the product is at, this helps a business take the right marketing decisions to improve the product’s success. The following are ways in which the stages of the PLC affect marketing decisions:

1. Pricing strategy may be formed in regards to competitiveness. During the maturity stage, as more competitors enter the market, a business often decides to lower prices in order to keep brand loyalty, while during the growth and launch stages, prices may be kept high(price skimming) to maximise profits and cover initial costs.
2. Promotion strategies may be chosen. Promotion expenditure will be at its highest during the introduction, but as sales reflect that the product has started its growth and maturity, the business may choose to lower the gear in annual promotion expenditure. Furthermore, during the decline stage, a business may decide whether or how to continue a product. A common extension strategy is a price reduction to attract more customers.

What is an extension strategy?

An extension strategy is a way of keeping a product at the maturity stage of the life cycle and extending the cycle.