bsbmkg502 b – session i ib

BSBMKG502B – Establish and adjust the marketing mix

ProductFirst of the Four P’s

Product (and service)PricePromotionPlace(ment)

Product/Service• Variety• Quality• Design• Features• Brand Names• Packaging• Sizes• Add-ons• Warranties• Returns

Products (services)•What is a product?•Classifications & Levels•Characteristics•Product Decisions•Branding•Packaging•Labelling

What is a product?

Anything that can be offered to market that might satisfy a want or need. Includes: objects,services, persons, places organisations & ideas

ClassificationsConsumer & Business

Consumer : bought by final consumers for personal consumption.

Business: bought by business to streamline operations.

Characteristics of Products

• Physical products• durable - many uses over extended period e.g. Mobile

phone• non-durable - consumed rapidly or only designed for a few

uses e.g. tissues

• Pure servicesDistinguished from physical products on the basis of:

• intangibility• inseparability• variability• Perishability e.g. Facials, massages

Levels of Products• Core product

• the problem-solving service or core benefit that consumers are buying when they obtain the product to satisfy a specific need

• Actual Product• parts, styling,features, brand name, packaging and other

attributes that deliver core benefits

• Augmented Product• includes any additional consumer services and benefits

built around the core product e.g. Cars now also have CD/MP3 player, air-conditioning, seat warmers etc.

Consumer productsAre classified as :• Convenience goods - purchased frequently with a minimum of

comparison and buying effort e.g. shampoo• Shopping goods – are compared on the basis of suitability,

quality, price and style e.g. shoes• Specialty Goods - have unique characteristics and are

specifically sought by the consumer e.g. Coffee machines• Unsought goods – may be unknown to buyer or not normally

considered for buying e.g. Cosmetic procedures

Industrial Business to Business (B2B) products

Are classified as:

• Materials & Parts – that enter a product in manufacturing (are transformed)

• Capital Items – (installations or accessories) indirectly contribute to production - enter finished product partly

• Supplies & Services – do not enter production at all

Product DecisionsDecisions need to be made about a product’s:

•quality•features•design

BrandingFour levels of meaning•attributes•benefits•values•personalitymore on branding later

PackagingThe activities of designing & producing the container or wrapper for the product. Has links to the placement/distribution mix.

LabellingRange: simple tags to graphics that are part of packaging. They:-

• identify•grade•describe•promote

New Product Development

The development of original products or improvements through organisation’s own Research & Development efforts

Product Life Cycles (PLC)

The course of a product’s sales & profits during its lifetime

5 Stages in a PLC•Product development•Introduction•Growth•Maturity•Decline

Services Classification

• A service is any benefit or activity that one party can offer to another that is essentially intangible and does not result in ownership of anything (hairdressing, financial advice, air travel)

Brand • Attributes – a brand elicits certain product activities in the

mind of the consumersE.g. what do you imagine when you hear the brand – Ferrari

• Benefits – objective needs satisfiers

• Values – The benefits of the brand indicates that these things are important to the customer

• Personality – people personify brands and products• E.g. Bollywood

Branding (cont)

• Brand Equity – brands create awareness, build preference & command loyalty

• Branding Decisions – Brands usually command higher profit margins than unbranded

• Brand Sponsors - organisations who sponsor the brand

• Brand Repositioning – re-evaluation in relation to competitive & market changes

• Brand Name Selection - see next slide

Brand Name Selection

• Should suggest product’s qualities & benefits• Easy to use - pronounce, recognise & remember• Distinctive• Translatable• Capable of registration/legal protection

Brand Strategy

• Brand Extensions – using a successful brand to launch new or modified products

• Multibranding – establish different features and appeal to a range of consumers

• New Brands - to enter new product category• Line Extensions – introduction of additional items in a given product category

• Brand Repositioning – change of product image

Packaging• Design & production of the container or wrapper of a

product to support the marketing objectives• Labelling – promote the product & meet legal

requirements – price, weight, contents, washing instructions, nutritional requirements

Product Support Units

• Support services through;• electronic media• web sites• mobile service representatives• 1800 phone numbers• agencies

Product Line Decisions

• Product Line – group of products closely related because they function in a similar manner, are sold to the same customer groups, marketed through the same types of outlets or fall within a given price range

• Product Line Decision – do we add or drop lines?• Product Line stretching decisions – extend product line downwards, upwards or to either side

Product Line Decisions (cont)

• Product Line filling decision – increasing the product line by adding more items within the current range

• Product Line modernisation decision – decision concerning look or feel of a product range

• Product Line Featuring Decision – decision on what features to promote

Youtube: no more bad tasting “Mother” energy drink

http://www.youtube.com/watch?v=trFBxyC1T74

Product Mix Decisions• Also called product assortment

• The set of all product lines and items that a particular seller offers

• Described in terms of breadth, length, depth and consistency

More later

26

Activities

• Activity: Find-a-word puzzle

From the find-a-word you will be allocated a marketing related term. You need to research this term and provide a definition and example of how it is applied in industry and present it to your fellow students.

Conclusion• Product and Service are treated as the same thing but as two ends of a spectrum or continuum

• Product has many properties that can all affect the overall marketing effort

• It is normally the most basic or first marketing mix element to be managed by marketers (except in more mature markets)