Key objectives The objectives of this chapter are to revise: the four elements of the marketing mix the role of product decisions in the marl the costs and benefits of developing new products brand image ~ impact on sales and customer loyalty the role of packaging the product life cycle: main stages and ext and interpret a product lite cycie diagram how stages of the product life cycle can influence marketing decisions, for example, promotion and pricing decisions ‘keting mix tension strategies; Key definitions Term Definition Marketing mix Aterm used to describe all the activities that go into marketing a product or service. ‘These activities are often summarised as the four Ps - product, price, place and promotion. Unique selling The special feature of a product that differentiates it from the point (USP] —_products of competitors, Brand name ‘The unique name of a product that distinguishes it from other brands. Brand loyalty When consumers keep buying the same brand again and again instead of choosing a competitor's brand Brandimage An image or identity given toa product that gives ita personality of its own and distinguishes it from its competitors’ brands. Packaging The physical container or wrapping for a product. Itis also used for promotion and selling appeal. Product tite The stages a product will pass through from its introduction, gycle through its growth until itis mature, and then finally its decline Extension Away of keeping a product at the maturity stage of the life cycle strategy and extending the cyclePAGES 158-165 ay The marketing mix: product Marketing mix: * promotion Process of developing new » market research —— 4 designing and creating new product + trallng sales in atest mare $ national launch = check sole Tevels against orignal objet Role of packaging: ‘ product protection promotional effect information helps consumer recyclable Marketing Benefits of developing new products: Branding + establish and develop brand name «help create USP ‘ create brand image and identity ‘keep products up to date + encourage brand loyalty enter new market + diversification PAGES 165-166 A typical product life cycle Sales volume Introduction Growth Maturity Saturation Decline Development TimeHow stages of the product life marketing decisions PAGES 166-168 Es | cycle influence ‘The stages of the product ite ‘cycle (se dagramt on page 56) Mean inpct on he merken ste Invoduction oecine ; esi penton etc ice selves ornate sive Sepi otto sates ew Pier BA stvoctve packaging ‘Tprepare for eventual product ges of the 1 place selection to reflect image placement | J _ product life cycle fluence marketing decisions Maturtysaturation * consider foreign markets competitive ping * prepare extension strateaies Grows ‘strengthen brans image ~ 2g, otginal promotion material + more place’ options to meet consumer demand Target your revision © There are four elements of a marketing mix. @ Product decisions will have an important impact on the other three P's. © Developing new products can be an effective way for a business to become more competitive. © Brand image helps to distinguish the products of one business from products produced by competitors. © Packaging performs several important func © Marketing mix decisions will change as a pr life cycle. © There are several ways the product life cyc! tions. oduct passes through its le can be extended. SW 1 Identify the four P's. 2. Distinguish between a consumer good and a producer good. 3 List two possible benefits to a business fr: product, ‘om developing a new 4 Suggest two reasons why businesses try to develop a brand image for their products, 5. List two functions of packaging. © Suggest two ways in which the marketing change as it passes through its life cycle. 7 Suggest two ways in which the product lf Answers on page 148 mix for a product might fe cycle can be extended.Common errors Po Error Why itis wrong = ‘A product always has to | Don't forget that the term ‘product’ includes services look good to sell well” | sold by tertiary sector businesses Some ‘cheap’ products sell well even though they might not look good’! ‘All products are Some products - Coca-Cola® is one example - have eventually withdrawn —_| been marketed for over 100 years; perhaps some from the market as they | products can be kept ‘fresh’ by constant use of enter the decline stage.’ | extension strategies. High tech products would be oo | unlikely to survive for more than a few years, though | Packaging is only there | Businesses often spend alot of money on clever, to protect the product.” | attractive and effective packaging asa form of promating product and helping to supportits brand image. | Sample questions and answers Ey | Chung is a limited company that makes mobile (cell) phones. It used to make them for well-known mobile phone retail businesses to be sold under their own brand names. Recently, Chung has started to sell its own brand of mobile phones directly to consumers. Promotion has focused on establishing a brand image that consumers can relate to and remember. There are many competing mobile phone manufacturers. Chung has three main mobile phone products ~ the oldest model is called the e-mobile. It has few modern features but it is still quite popular with low-income consumers. 1. Outline two benefits to Chung of establishing a brand image. [4] Student's answer Branding will help consumers identify Chung’ mobile phones [Ap] and, if they are of good quality, will help develop brand loyalty. (K] ‘As there are many competitors that manufacture mobile phones [Ap], a well recognised brand name can help a business stand out from these competitors. (K] Teacher's comments Two relevant points about branding ~ and both are sufficiently applied to Chung and the industry it operates in. Marks: 2; Ap2 = 4 in total. Full marks.2 Recommend the best way for a business manafacturing mobil phones to effectively extend the product life cycle ofa mobile phone. Justify your answer, (6) Student's answer Aaa product ages, its sales usually start to decline unless an extension strategy isused.(K] ‘business could change the product slightly to make it more appealing, Perhaps new colours could be used or a better box could be designed. Packaging can help to reate a good image for a product and make t easily recognisable (AN) ‘The business could use a new advertising campaign. This might encourage more people co buy the product [K] even though the design might-be quite old | think the business should advertise more as some consumers might have forgotten that the product exists. Teacher’s comments The student understands the PLC and extension strategies. There is no judgement in the answer for the best strategy - itis a general statement about what the student thinks might be the best extension strategy. Marks: K2; Ani = 3 in total. Exam-style questions SW produces four main confectionery products. The ChewBar has been ‘on the market for 15 years and sales are now falling. The FabChoc bar has just been launched but sales are disappointing. The two other products sell well even though there is now little promotion of them. We need products at different stages of their product life cycle, said Franc, the Managing Director. ‘SW has always thought it best to price products quite highly at all stages of their life cycles and promote them when they are first launched. a Define ‘product life cycle’. (2) b Identify two possible extension strategies for a chocolate bar. 2 © Outline at which stage of their product life cycle ChewBar and FabChoc seem to be. i 4 Explain ene benefit and one drawback of SW developing new products. © Do you agree that prices should not be changed as products go through the stages of the product life cycle? Justify your answer. (6) (6) Answers on page 148