1. The Marketing Mix
"The 7 P's"

2. PRODUCT

3. PRODUCT
Product involves the factors that influence our purchases – appearance, performance, fashions, etc. Customers won’t buy something they don’t want. Every product has a lifespan (from conception to demise) which is unique. The stages/phases a product lives through are:

4. The PRODUCT LIFE CYCLE

5. Stages – n5 recap Development
Market research, test marketing, prototype developed
Introduction
Product is launched, heavily advertised and sales begin to increase
Growth
Greater awareness of product and sales are growing rapidly

6. Stages - continued Maturity
Sales peak and product is well known. Extension strategies may be used.
Saturation
everyone has the product – no longer demanding it
Decline
Sales decline, product is no longer wanted and is eventually withdrawn

7. Profitability in the Product life cycle
Stage
Profit Levels
Development
No profit
Introduction
Very little, if no, profit
Growth
Profits begin to increase
Maturity
High profits
Saturation
High profits before they drop
Decline
Profits fall and losses may be made

8. Extension strategies
Products need to be kept at the maturity stage for as long as possible (most profitable at this stage)
Extension strategies are used to inject new life into products to keep it selling

9. Extension strategies Change the packaging
Change the size, variety and shape of product
Improve the quality of the finished product
Change the method of promotion
Change the method of advertising – reach a larger number of people
Change the price – appeal to different segments

10. Think of products examples where extension strategies have been used
Continued …
Change the place the product is sold
Change the name of the product
Change the use of the product
Think of products examples where extension strategies have been used

11. Product Change the product ingredients Change the packaging Rebrand
Limited time reductions
Credit deals
Encourage more frequent use
New use for a product
Develop a product range
Introductory offers

12. Promotion – Extension Strategies
Competitions
Celebrity endorsement
Create a new advert
Sponsorship
Target a new segment

13. Place – Extension Strategies
Globalisation
Internet – e-commerce
Agents
Catalogues

14. PRODUCT PORTFOLIO
Many organisations sell more than one product – this a product portfolio
What’s in Cadbury’s product portfolio?
Why do they have a product portfolio?

15. Why? Reduce the risk of failure Appeal to a number of market segments
To increase sales/profits – customers will buy a variety of products from the organisation
Introducing new products is easier
Increase awareness
To cope with seasonal products

16. Boston matrix
This is used to plot the range of products an organisations offers. It looks at the market share and market growth of a product.
It identifies when products might need to be introduced or changed
An organisation wants as many “stars” as possible

17. THE BOSTON MATRIX Market Growth Market Share Problem Child/ Star
HIGH
LOW
Market Share
Market Growth
Problem Child/
Question Mark
Star
Dog
Cash Cow

18. Problem Child/Question Mark
New product (introduction stage)
Needs money to ensure success (usually taken from a cash cow)
Will grow into a star only if looked after properly
Needs promotion
Loss making
The future of the portfolio?

19. Star
In growth stage
Earning revenue - reinvested to support new products
Gaining customer loyalty
Still requires promotion
Potential cash cow

20. Cash Cow In maturity stage
Earning constant revenue to support other products
Extension strategies needed?
Has customer loyalty – less promotion required
Without careful planning – dog!

21. Dog In decline stage Losing customer interest – tired product
Loss leader?
Decision-making time – let die or revive?

22. Analyse and comment on the following combinations:
BAD
Star, star, dog
Problem child, star, cash cow
Cash cow, cash cow, dog
Problem child, problem child, cash cow
GOOD
BAD
BAD

23. Disadvantages of a product portfolio
What are they?
Cost of promoting and advertising a number of products can be high
One products bad reputation may tarnish the others
High research and development costs
Production costs for a range of products may be high
Staff training needed to deal with different products