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The Marketing Mix

The Marketing Mix. Product Strategy. Goods Services Experiences Events Persons. Places Properties Organizations Information Ideas. What is a Product?. The Product and Product Mix. Components of the Market Offering. The Product and Product Mix. Five Product Levels.

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The Marketing Mix

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  1. The Marketing Mix Product Strategy

  2. Goods Services Experiences Events Persons Places Properties Organizations Information Ideas What is a Product?

  3. The Product and Product Mix Components of the Market Offering

  4. The Product and Product Mix Five Product Levels

  5. Consumer Product Classifications Convenience Products Shopping Products Specialty Products Unsought Products Business Product Classifications Raw Materials, Component Parts, Process Materials, MRO Supplies, Accessory Equipment, Installations, Business Services Common Product Classifications

  6. Product Lines and Mixes Strategic decisions Product Lines and Mixes Product Mix Width Product Mix Depth Product Mix Length Product Mix Consistency

  7. Product Lines and Product Mixes at Gillette

  8. Benefits of offering a wide variety and deep assortment of products: Economies of Scale Package Uniformity Standardization Sales and Distribution Efficiency Equivalent Quality Beliefs Product Lines and Mixes

  9. New Product Development • New Product Failure is Rampant: • 95% of new U.S. consumer products • 90% of new European consumer products • Reasons for failure include ignoring unfavorable market research, overestimating market size, marketing mix decision errors, and stronger than anticipated competitive actions

  10. Six product development options: New-to-the-world products (discontinuous innovations) New product lines Product line extensions Improvements or revisions of existing products Repositioning Cost reductions New Product Development

  11. Consumer Adoption Process Steps in the Adoption Process Awareness Interest Evaluation Trial Adoption

  12. Consumer Adoption Process Adopter Categorization on the Basis of Relative Time of Adoption of Innovation

  13. Consumer Adoption Process Five product characteristics influence the rate of adoption Relative Advantage Compatibility Complexity Divisibility Communicability

  14. Development Stage Introduction Stage Growth Stage Maturity Stage Decline Stage The Product Life Cycle

  15. Marketing Strategy at the Product Development Stage • No sales revenue during this stage • Components of the product concept: • An understanding of desired uses and benefits • A description of the product • The potential for creating a complete product line • An analysis of the feasibility of the product concept • Customer needs should be discerned before developing marketing strategy

  16. Stages of the Product Life Cycle

  17. Introduction Low sales High costs per customer Negative profits Innovator customers Few competitors Stages of the Product Life Cycle • Objective: to create awareness and trial • Offer a basic product • Price at cost-plus • Selective distribution • Awareness – dealers and early adopters • Induce trial via heavy sales promotion

  18. Growth Stages of the Product Life Cycle • Objective: maximize market share • Offer service, product extensions, warranty • Price to penetrate • Intensive distribution • Awareness and interest – mass market • Reduce promotions due to heavy demand • Rising sales • Average costs • Rising profits • Early adopters customers • Growing competition

  19. Maturity Stages of the Product Life Cycle • Objective: maximize profit while defending market share • Diversify brands/items • Price to match or beat competition • Intensive distribution • Stress brand differences and benefits • Increase promotions to encourage switching • Peak sales • Low costs • High profits • Middle majority customers • Stable/declining competition

  20. Decline Stages of the Product Life Cycle • Objective: reduce costs and milk the brand • Phase out weak models • Cut price • Selective distribution • Reduce advertising to levels needed to retain hard-core loyalists • Reduce promotions to minimal levels • Declining sales • Low costs • Declining profits • Laggard customers • Declining competition

  21. Marketing Strategy & the Product Life Cycle

  22. Brand Decisions • The AMA definition of a brand: “A name, term, sign, symbol, or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from the competition.”

  23. Brand Decisions • Brand equity refers to the positive differential effect that a brand name has on customers. • Brand equity: • is related to many factors. • allows for reduced marketing costs. • is a major contributor to customer equity.

  24. Packaging and Labeling Shipping Package Primary Package Packaging Aspects Secondary Package

  25. Packaging and Labeling • Developing an effective package: • Determine the packaging concept • Determine key package elements • Testing: • Engineering tests • Visual tests • Dealer tests • Consumer tests

  26. Packaging and Labeling Functions of Labeling Identifies the Product or Brand May Identify Product Grade May Describe the Product May Promote the Product

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