THE MARKETING MIX

VARIABLES
PRODUCT
PRODUCT DEFINED
• A product is anything that can be offered to a market for attention,
acquisition, use or consumption that might satisfy a want or a need.
• A product may be tangible (book, car, soap), or intangible (teaching,
banking).
• That is to say product can be a pure good (car), pure service (lawyers
advice), or a combination of these (meal delivery service, a company
that sells software products may also offer installation and technical
support).
• A product can also be an idea (plant a tree today)
PRODUCT DEFINED cont.
• Marketers view total product as having characteristics and benefits at
two levels
• Primary characteristics - providing essential benefits common to
most competitive offerings (here consumers expect some basic level
of performance)
• Auxiliary dimensions – providing supplementary benefits and include
special features, warranty, packaging, repair service contract etc
Comparison of Goods, Services and Ideas as
Products
• Goods
• Tangible Can be seen, touched or tasted (A bag)
• Permanent – Stored at least for a while (Basket)
• Standardised (Key soap)
• Not reliant on customer participation (they remain the same no
matter who buys it, You tend to see what you are getting for your
money)
Comparison of Goods, Services and Ideas as
Products cont
• Services
• Intangible (Barbering)
• Impermanent - They do not last and cannot be stored
• Non standardized the quality you receive in an exchange may be
considerable different from the quality another receives, (Extra
classes Teaching)
• Reliant on customer participation (Barbering)
Comparison of Goods, Services and Ideas as
Products cont.
• Ideas
• Intangible You cannot see (if you drink, don’t drive)
• Impermanent – Eg, the package on a drug is quickly read and
forgotten
• Standardised - Like a good, it is marketed in a standardized form
(Plant a tree)
• Reliant on Customer participation you have to act on the thought for
it to have value (Vote, Give blood)
DIFFERENCES BETWEEN GOODS AND
SERVICES
• 1. Intangibility – They cannot be touched, sensed, seen tasted heard
or felt in the same manner that goods can be seen. Services cannot
be stored and are often easy to duplicate
• 2. Inseperability – Goods are produced, sold and consumed. However,
services are often sold, produced and consumed at the same time,
• That is their production is inseparable from their consumption.
• Services cannot be produced at a centralized location and consumed
in decentralized location as goods typically are.
• Quality of services depends on the firms employees
DIFFERENCES BETWEEN GOODS AND
SERVICES cont.
• Heterogeneity – Services are less uniform than goods. A stylist in a
saloon’s performance may differ with the time of day, mood etc
• Consistency and quality control is hard to achieve in the service
industry
• 4. Perishability – Services cannot be stored or warehoused. An empty
hotel room produces no revenue that day, the revenue is lost.
However, during peak period, service organisations are often forced
to turn away customers
• Some airlines have adopted some pricing strategies during off-peak
and peak hours (eg discounts)
TERMS RELATING TO THE PRODUCT
CONCEPT
• 1. Product Item – A Specific version of a product that can be designated as a
distinct offering among an organisation’s product. Unilever key soap
• 2. Product Line – Closely related products items constitute a product line. Eg, Lux,
Rexona represents one of Unilever’s product lines.
• Different container sizes and shapes also distinguish item in a product line. Coca
cola is available in cans, and in various bottles and plastic containers. Each size
and container is a separate product item
• 3. Product Mix – Includes all the products that an organisation sells. All Unilever’s
products soaps, margarine, pepsodent, cooking oil etc constitute its product mix
• Product Mix Width refers to the number of product lines an orgnaisation offers
• Product Line Depth refers to the number of product items in a product line
BENEFITS OF ORGANISING ITEMS
INTO PRODUCT LINE (LAMB ET AL,
2002)
• Advertising economies – Product lines produce ecomomies of scale in advertising.
Several products can be advertised under the umbrella of the product line
• Package Uniformity – All packages in the line can have a common look and still
keep their individual identities
• Standardized components – A car manufacturer can use the same parts on many
of its makes and modules
• Efficient sales and distribution – A product line provides a full range of choices to
customers. Distributors and retailers are often inclined to stock a company’s
products if it offers a full line.
• Equivalent Quality – Purchasers usually expect and believe that all products in a
line are about equal in quality
CLASSIFICATION OF PRODUCTS
• Products are classified as either consumer or industrial based on the
purchasers of the particular item
CONSUMER GOODS
• Convenience
• Shopping
• Speciality
• Unsought
CONSUMER GOODS cont,
• CONVENIENCE GOODS
• They are products that consumers seek to purchase frequently,
immediately and with a minimum of effort. Newspapers, chewing gum,
soap, magazine, milk, bread etc

• SHOPPING GOODS
• These are products purchased only after the consumer has compared
competing goods in competing stores on bses such as price, quality,
style, colour etc
• Eg Furniture, clothing, major appliance, used cars etc
CONSUMER GOODS cont.
• SPECIALTY GOODS
• These are particular products desired by a purchaser who is familiar with the item sought
and is willing to make a special effort to obtain it. Eg Specific brands and types of fancy
goods, cars
• Buyers do not go about comparing prices, they only invest time to reach the dealers of the
product desired

• UNSOUGHT GOODS
• These are products that potential customers do not yet want or know they can buy, so
they do not search for them at all. Eg funeral services, fire extinguishers, disability
insurance
• Customers probably would not buy these products if they see them unless promotion can
show their value
MARKETING STRATEGY CONVENIENCE SHOPPING SPECIALTY
FACTOR
STORE IMAGE Unimportant Very important Important
PRICE Low Relatively High High
SALES TECHNIQUE Mass Advertising Mass Advertising and Highly Trained Sales Force
Personal Selling
CHANNEL LENGTH Many Wholesalers Relatively few Very few Wholesalers and
Wholesalers and Retailers Retailers
NUMBER OF RETAIL Many Few Very Small number
OUTLETS
INDUSTRIAL GOODS
• The industrial or organizational market comprises of manufacturers,
government agencies, mining firms, contractors, wholesalers,
retailers, and institutions such as schools and hospitals that buy goods
and service to use in producing other item for sale.
• Industrial goods can be classified as capital or expense items.
• Capital items are industrial products that are relatively long lived and
that usually involve large sums of money, such as factories, machinery
• Expense items are usually less costly than capital item and are
consumed within a year of their purchase. Light bulbs, pencils and
lubricating oils etc
INDUSTRIAL GOODS cont.
• Industrial goods can be further classified into six additional categories
• Installation
• Accessories
• Component parts and materials
• Raw materials
• Supplies
• Professional Services
Installations
• These includes major capital goods such as production machinery,
building and land right. Installations are boom or bust business.
When sales are high, businesses wants to expand capacity rapidly.
And when the potential return on a new investment is very attractive,
firms may accept any reasonable price. But during a downsizing,
buyers have little or no need for new installations and sales fall off
sharply
Accessories
• These are tools or equipment that have a fairly short life span and are
used in the production of a firm’s product or in its offices such as
computers, fax machines, desks. They do not become part of the
finished products
Component Parts and Materials
• These are manufacturers goods a firm buys for inclusion in a product
it makes. Automobile manufacturers, for example, buy tyres from
tyre producers
Raw Material
• Are unprocessed items that become a physical part of a firm’s
product. This group would include wheat bought by a flourmill and
iron-ore purchased by a steel-producing firm.
• We can break raw materials into two types
• Farm products and Natural products
• Farm products are grown by farmers, eg oranges, maize and cattle.
• Natural products are products that occur in nature, such as fish,
timber, gold and crude oil
Supplies
• These are items for maintenance, repair, and operations. Eg would be
light bulbs, paper clips and paint. They are expense items that do not
become part of a finished product
Professional Service
• These are specialized services that support a firms operations. They
are usually expensive items. Engineering and management consulting
serves can improve the plant layout and or the company’s efficiency.
Computer services for example, can process pay will, and advertising
agencies can help promote the firm’s product.
NEW PRODUCT DEVELOPMENT
• According to Guiltinan and Paul (1991) new products from
management perspective are those which are new to the company
and may include modifications of existing products, products acquired
from other firms, or innovative original products. From the buyers’s
perspective, a new product is any addition to or change in the
assortment of available choices.
• A product can new to the world, to the market, to the producer or
seller, or to some combinations of these
• There are six categories of new products:
• New to the world product – These are product inventors such as the first car, television
computer and fax
• New Category entries – These are new to the firm but not to the world. Eg Ecobank visa
card
• Addition to the product lines – This includes new products that supplements a firm’s
established lines. Eg Geisha soap, sunlight powdered soap
• Product improvements – These are improvements on an existing products. This can be
significantly or slightly changed. Eg New smooth milo from Nestle Ghana Limited
• Repositioning – Existing products targeted at new markets or market segments
• Lower-prices product – Products that provides performance similar to that of competing
brands but at a lower price. Hewlet Packard develop the Laser Jet 3100, a combination
of scanner, copier, printer and fax machine. This was priced cheaper than the combined
price of the four items purchased separately
NEW PRODUCT DEVELOPMENT cont.
• Products do not remain economically viable forever, so new ones
must be developed to assure the survival of the enterprise
• A new product goes through the following stages
• Idea generation
• Product screening
• Business analysis
• Prototype development
• Test marketing
• Commercialisation
Idea Generation
Generating ideas for the new offering is the starting point of the new
product development process. This is the continuous systematic search
for new product opportunities. These ideas can come from different
methods and sources. These includes:
1. Analysing products offered by competitors – This can be a source of
innovation or improvement on existing products
2. Observing customers use of existing products, technological
development and suggestions from employees
Product Screening
• After the firm has identified a set of potential products, it must screen
them. This step is also known as idea screening. At this stage, poor
unsuitable or unattractive ideas are taken out from further
consideration
• Attributes such as marketability, durability, productive ability and
growth potential
Business Analysis
• Another screening is done at this stage.
• Does the idea fit with the company’s product, distribution and
promotional resources?
• The business analysis stage calls for preparing initial marketing plans
for the product
• It requires developing tentative marketing strategy and estimating
demand projections, cost, competition, investment requirements and
profit
Prototype Development
• At this stage, the idea is converted into a physical form
• This involves product construction, packaging, branding, product and
brand positioning and attribute and usage testing
• New product cost begins to escalate at this stage because developing
prototype normally requires a considerable investment
Test Marketing
• This involves placing a product for sale in one or more selected areas
and observing its sales performance under proposed marketing plan
• The purpose of the test is to evaluate the product and pretest the
firm’s marketing plan prior to a full-scale introduction of products
Commercialisation
• After testing, the firm is ready to introduce the product to its full
target market. This is known as commercialization and correspond to
the introductory stage of the product life cycle
• The level of investment and risk is generally the highest at this stage
• Investment in production, distribution, and marketing support ban be
extremely high.
• Successful commercialisation requires understanding consumer
adoption, trimming decisions and coordinating efforts
Why do New Products Fail
• Inadequate product superiority or uniqueness – If the product is
merely an imitation of products already on the market and does not
offer the consumer relative advantage
• Inadequate or inferior planning – Failure to conduct proper marketing
research about consumer’s needs and failure to develop realistic
forecasts of market demand and accurate estimates of the
acceptance of the products
• Poor execution – No matter how good the plans, adequate resource
must be allocated so that strategies can be properly executed.
Why do New Products Fail cont.
• Technical Problem – Problems may stem from the product itself,
failures in production or design
• Poor timing – The market may have changed before the new product
was introduced, or the company may have entered the market too
early or too late in the product life cycle
Product Life Cycle
• Product life cycle consists of the stages through which a product
passes from its birth or introduction to its death or abandonment.
• A product’s life passes through four stages

• Introduction
• Growth
• Maturity
• Decline
Diagram of the Product Life Cycle
Introduction
• This is the first stage. During this stage, sales rise slowly.
• Competitors are few
• The product is subject to frequent technological improvement in
production and distribution
• Cost are high and experimental production cost are common
Growth
• This is where sales of a new product accelerate.
• Early adopters continue to purchase the products, whilst late adopters
are also buying the product for the first time
• Production methods become established, with product improvement
increasing quite frequently
• Even though demand is increasing rapidly at this stage, profits might
still be low because firms are spending heavily on product
refinements or additional promotion to attain or retain a dominant
position
Maturity
• Sales continues to increase at a declining rate
• Competition becomes quite significant, forcing marginal producers
and dealers out of the market. The firm can adopt any of these
strategies:
• Intensify brand promotion by heavy advertising to customers
• Add more variety in features, flavours, designs, packages etc
• Increase product availability by getting into different channels and
expanding point of sale service
Decline
• As time passes consumer needs changes and other companies
introduce substitute for the product.
• Consumer loyalties decline and so do sales and profits
• Decline can b every abrupt or slowly
• The firm can use the following strategies
• Selectively cut down market efforts by narrowing target market
• Modify the product to give it greater appeal in different market segment
• Reintroduce through repackaging, or repositioning
• Drop the line
Marketing Strategy Implication of the Product Life
Cycle
Strategy Introduction Growth Maturity Decline
Dimensions
Basic Objectives Establish a market Build sales and Defend Brand’s Limit costs or seek
for the product market share; share of market; ways to revive sales
type; persuade early develop preference seek growth by and profits
adopters to buy for brand luring customers
from competitors
Product Provide high quality; Provide high quality; Improve quality; add Continue providing
select a good brand; add services to features to high quality to
get patent and /or enhance value distinguish brand maintain brand’s
trademarks from competitors reputation; seek
protection ways to make
product new again
Pricing Often high to Somewhat high Low, reflecting Low to sell off
recover because of heavy heavy competition remaining inventory
development costs; demand or high to serve a
sometimes low to niche market
build demand
rapidly
Place Limited number of Greater number of Greater number of Limited number of