Marketing - Saint Roch's Secondary School

Report
Today…
 Product
 Product Life Cycle
 Brands
Product/Service
Product
The good or service which the business is trying
to sell. Most important element a it determines
what the price will be (Price), how it is
promoted(Promotion) and where it is sold
(Place).
Core Product provides a basic need
Augmented Product is made more attractive
to the customer by having additional features.
Product Life Cycle
Products have a natural ‘lifespan’. Some are
very short others are around for decades.
The life of a product can be prolonged by
using extension strategies. However all
products go through a number of distinct
phases.
Stages in Cycle
Development Stage – many products will never
progress past this stage. Development of new products
is essential but can be very costly. Before launching it
may be test-marketed. Modifications can then be made
based on feedback.
Introduction Stage – heavy advertising at this stage to
make consumers aware of the product. Sales are slow
and costs are high.
Growth Stage – consumers more aware of the product
and sales start to grow rapidly. It is during this stage that
the product begins to become profitable.
Stages in Cycle
Maturity Stage – sales reach their peak. Advertising
costs are lower and development costs should have been
repaid. The product is at its most profitable. The
business will work to keep the product in this stage for as
long as possible. This can be done by using extension
strategies.
Decline Stage – Sales and profits start to fall. Mobile
phone sales are beginning to decline if firms wish to stay
in business they will have to create new phones or new
demand for phones.
Product Life Cycle
Extension Strategies
Reducing Price Therefore Promoting More
Frequent Use of Product – reduce cost of
texting to mobile phones.
Developing New Markets for Existing Product
– Computer were originally manufactured for the
business market, moved into home market.
Finding New Uses for Existing Products – fire
lighters now used for barbeques.
Extension Strategies
Develop a Wider Range of Products – new
versions of same product can produce new
interest from consumers. Irn Bru – range of can
and bottle sizes, fruit chews, ‘alco-pop’ market.
Developing Styling Changes – introducing
slightly different product – football strips.
Effects of Extension
Strategies
Branding
Branding is used to create USP’s (unique
selling propositions) and ESP’s
(emotional selling propositions)
The business chooses a word or symbol,
or both, then registers them so that they
can only be used on its products.
Baxter’s, Oxo, Cadbury’s and Heinz are
all well-known brand names.
Benefits of Branding
Instant recognition of the product by the customer.
Brand loyalty – repeat purchases
Higher prices can be charged
Quality is associated with it
Easier to launch new products
Good after sales service
May lead to purchases of other products with same
brand name
Drawbacks of Branding
Time is taken to establish a brand
Promotion costs will be high
Bad publicity for one product can affect the whole
range of same-brand products
Fake products may appear. These imitators are very
difficult to stop. (Burberry, Rolex and Calvin Klein
who can charge premium prices for their products
suffer most at the ands of the forgers.)
Own Brands
Most of the supermarket chains, and large
retailers such as Boots, offer a wide range of
products under their own brand names.
These can be produced by the supermarket or
by a manufacturer who is contracted to produce
goods for the supermarket.
Advantages of Own Brands
Own brands will attract more customers
and more sales within the store.
Producer will have guaranteed sales
Products are cheaper
Disadvantages of Own Brands
Some customers believe ‘own brands’ are of
lower value than established brand names
(although this is not necessarily true).

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