4.5.1 The 4Ps (Product)
The product Life Cycle
Marketing Mix
• help product managers make strategic decisions concerning a product’s marketing mix
• comprised of the 4ps - product, price, place, promotion • 5 stages: research and development, introduction, growth, maturity, decline
• product - anything relating to the design of a good or • Research and development
• all activities that take place before a product is released to the market
service, also includes packaging • 3 key areas: market research, product development, and preparing production
• price - the value at which a good or service is sold. Pricing • market research - gauging consumer requirements and assessing whether there is a gap in
strategies help businesses maximise revenue. the market.
• promotion - all interactions with a customer, includes • Product development - all activities involved in designing and testing the new product.
Prototypes are built, old ideas scrapped, innovative new ideas protected using copyright
advertising (above-the-line promotion) and special offers and patent laws
• Place - how a product is distributed from producer to the • preparing production - suppliers found, production facilities made or outsources, initial
final consumers, including intermediaries inventories are built up and shipped to distributors
• test marketing and commercialisation may be used prior to release
• test marketing - creating real situations in which the product is bought, but without letting
customers know they are part of the evaluation
• commercialisation - introduction of new products to the market
• Introduction
• when product is first released to the market and consumers have the opportunity to spend
their money purchasing the product
• coherent marketing mix is essential
Boston Consulting Group Matrix • awareness needs to be built up and promotional messages should communicate products
USP, which is reinforced by pricing strategies and distribution channels
• tool to help companies with multiple products decide their marketing • Growth
strategies. Products are placed onto the matrix depending on two
• new consumers may need to be targeted is sales are to continue growing which leads to an
variables: market share and market growth. Can also serve as a adaptation of the marketing mix
reminder for firms to build a portfolio of products that it can rely on for
• Pricing strategies like price penetration and skimming are no longer appropriate, whereas
growth and steady revenue streams price leadership or competitive pricing may be used.
• market share us the percentage of total market sales controlled by a • Distribution channels are widened to include mass market retailers
particular product
• promotional messages are adapted with the aim of raising awareness in the new target
• market growth is how fast the total demand for a product is segments
expanding or contracting within on year, the formula being: (total
market sales - total market sales last year)/ total market sales last • Maturity
year x 100 • a time of high and steady sales
• marketing objectives focus on building customer loyalty
• Product Classifications • below-the-line promotional messages such as loyalty schemes may be used
• Cash Cows (high market share, low market growth) • marketing budgets may be cut as the businesses are no longer attempting to create desire
• successful products in mature markets for new customers
• high sales revenue from an established customer base • combination of high sales and falling promotional costs lead to profits being maximised
• customer loyalty likely to be high so less money needed for • market is saturated meaning there is limited potential for further growth
marketing activities
• Decline
• promotion is likely to be focused on replacement products and • period of falling sales, marketing costs are also likely to be cut
maintaining loyalty
• prices are reduced to target value-conscious consumers, this is reinforced by shifting
• produce a significant positive cash flow distribution to discount retailers
• Dogs (low market share, low market growth) • When products begin to make a loss, they are withdrawn from the market
• may be at the end of their life cycle or perhaps niche products • Extension strategies may be used at this point to extend the life of the product through new
competing in mature markets promotions, limited editions, new packaging etc
• small positive cash flow • FADS
• Shooting Stars (high market share, high market growth) • group of products that do not follow the traditional product life cycle and experience very
• significant proportion of fast-growing markets high sales for a short period of time before consumers lose interest
• revenues equally fast growing
• requires significant investment to sustain growth
• marketing will focus on attracting new customers and establishing
brand image
• profitability depends on how much revenue invested in future Extension Strategies
growth Branding and Packaging
• high growth firms will be spending heavily to keep expanding their
operations and sales so it is possible for a shooting star to have a • a means of avoiding decline by • brand - a name, symbol or design that is
negative cash flow periodically updating the marketing mix used to identify a product or company
• Problem child (low market share, high market growth) to ensure they continue to meet their
• Importance of branding
• often recently launches in response to the rapidly growing customers needs • awareness - recognisable by
revenues of competitors • can be a cost-effective way of ensuring customers
• if they gain market share, considerable investment will be required long-term sales • development - allow a company to
• Likely to have a negative cash flow • easier to reinvigorate an established launch secondary products with relative
• Product strategies brand than to launch a new one due to ease for example cadbury chocolate
• milk your cows - reinvest the surpluses from cash cows into other customer loyalty and established • loyalty - brand loyal customers require
products distribution channels little persuasion to try or purchase new
• help your stars shine - stars offer best chance of future profitability, products
therefore they should be the primary recipients of investment • Types of extension strategies
• finding a new target market • value - brand-loyal customers are more
• support your problem child - require considerable investment, likely to make repeat purchases and are
however this should not come at the expense of stars. Therefore, • may be possible to change the
less sensitive to price changes which
cash strapped firms may decide to cut their losses and let these marketing mix to target a new
can lead to high profit margins
products fail group of consumers
• limitations of branding
• keep your dog as a pet - as long as they remain profitable, dogs • money will need to be invested
should be maintained as the surpluses can be invested in the • takes time and money and if brands try to
into market research expand into unrelated markets it can
company’s stars and problem children. If dogs begin to experience
• this may find a new geographical damage brand value is consumers do not
a negative cash flow, they should be allowed to die
location or a new use for the value the link
• Evaluation product, for example red bull was • Packaging
• advantages initially targeted at tired bus • distinct packaging like pringles tube
• allows companies to identify the products of their product allows brand to stand out from
portfolio to maximise revenues drivers, but it is now also targeted
at the younger generation to help competition and encourages customer
• gaps in the current portfolio can be identified and targeted loyalty
• offers simple and clear guidance them study late
• Functions of packaging
• provides advice as to which products deserve financial support • product update
• protect the product, communicate
• disadvantages • could include new packaging or information, promote the product and
• placements of products is subjective as there is no guidance as new features, this allows communicate USP, make the product
to what high or low market share or market growth are businesses to keep up with rivals easy to sell
• external factors are not considered while creating desire from current • guerilla marketing and packaging
• limited use if corporate objective is not growth customers to invest in the latest • companies have developed unique,
• cannot be used as a forecasting tool functional packaging that helps to raise
models (iphone and car
• profitability and pricing strategies are not considered awareness and improve brand image,
• manufacturers)
for example SONY selling headphones
• promotion
for swimmers in water bottles
• BOGOF
The product Life Cycle
Marketing Mix
• help product managers make strategic decisions concerning a product’s marketing mix
• comprised of the 4ps - product, price, place, promotion • 5 stages: research and development, introduction, growth, maturity, decline
• product - anything relating to the design of a good or • Research and development
• all activities that take place before a product is released to the market
service, also includes packaging • 3 key areas: market research, product development, and preparing production
• price - the value at which a good or service is sold. Pricing • market research - gauging consumer requirements and assessing whether there is a gap in
strategies help businesses maximise revenue. the market.
• promotion - all interactions with a customer, includes • Product development - all activities involved in designing and testing the new product.
Prototypes are built, old ideas scrapped, innovative new ideas protected using copyright
advertising (above-the-line promotion) and special offers and patent laws
• Place - how a product is distributed from producer to the • preparing production - suppliers found, production facilities made or outsources, initial
final consumers, including intermediaries inventories are built up and shipped to distributors
• test marketing and commercialisation may be used prior to release
• test marketing - creating real situations in which the product is bought, but without letting
customers know they are part of the evaluation
• commercialisation - introduction of new products to the market
• Introduction
• when product is first released to the market and consumers have the opportunity to spend
their money purchasing the product
• coherent marketing mix is essential
Boston Consulting Group Matrix • awareness needs to be built up and promotional messages should communicate products
USP, which is reinforced by pricing strategies and distribution channels
• tool to help companies with multiple products decide their marketing • Growth
strategies. Products are placed onto the matrix depending on two
• new consumers may need to be targeted is sales are to continue growing which leads to an
variables: market share and market growth. Can also serve as a adaptation of the marketing mix
reminder for firms to build a portfolio of products that it can rely on for
• Pricing strategies like price penetration and skimming are no longer appropriate, whereas
growth and steady revenue streams price leadership or competitive pricing may be used.
• market share us the percentage of total market sales controlled by a • Distribution channels are widened to include mass market retailers
particular product
• promotional messages are adapted with the aim of raising awareness in the new target
• market growth is how fast the total demand for a product is segments
expanding or contracting within on year, the formula being: (total
market sales - total market sales last year)/ total market sales last • Maturity
year x 100 • a time of high and steady sales
• marketing objectives focus on building customer loyalty
• Product Classifications • below-the-line promotional messages such as loyalty schemes may be used
• Cash Cows (high market share, low market growth) • marketing budgets may be cut as the businesses are no longer attempting to create desire
• successful products in mature markets for new customers
• high sales revenue from an established customer base • combination of high sales and falling promotional costs lead to profits being maximised
• customer loyalty likely to be high so less money needed for • market is saturated meaning there is limited potential for further growth
marketing activities
• Decline
• promotion is likely to be focused on replacement products and • period of falling sales, marketing costs are also likely to be cut
maintaining loyalty
• prices are reduced to target value-conscious consumers, this is reinforced by shifting
• produce a significant positive cash flow distribution to discount retailers
• Dogs (low market share, low market growth) • When products begin to make a loss, they are withdrawn from the market
• may be at the end of their life cycle or perhaps niche products • Extension strategies may be used at this point to extend the life of the product through new
competing in mature markets promotions, limited editions, new packaging etc
• small positive cash flow • FADS
• Shooting Stars (high market share, high market growth) • group of products that do not follow the traditional product life cycle and experience very
• significant proportion of fast-growing markets high sales for a short period of time before consumers lose interest
• revenues equally fast growing
• requires significant investment to sustain growth
• marketing will focus on attracting new customers and establishing
brand image
• profitability depends on how much revenue invested in future Extension Strategies
growth Branding and Packaging
• high growth firms will be spending heavily to keep expanding their
operations and sales so it is possible for a shooting star to have a • a means of avoiding decline by • brand - a name, symbol or design that is
negative cash flow periodically updating the marketing mix used to identify a product or company
• Problem child (low market share, high market growth) to ensure they continue to meet their
• Importance of branding
• often recently launches in response to the rapidly growing customers needs • awareness - recognisable by
revenues of competitors • can be a cost-effective way of ensuring customers
• if they gain market share, considerable investment will be required long-term sales • development - allow a company to
• Likely to have a negative cash flow • easier to reinvigorate an established launch secondary products with relative
• Product strategies brand than to launch a new one due to ease for example cadbury chocolate
• milk your cows - reinvest the surpluses from cash cows into other customer loyalty and established • loyalty - brand loyal customers require
products distribution channels little persuasion to try or purchase new
• help your stars shine - stars offer best chance of future profitability, products
therefore they should be the primary recipients of investment • Types of extension strategies
• finding a new target market • value - brand-loyal customers are more
• support your problem child - require considerable investment, likely to make repeat purchases and are
however this should not come at the expense of stars. Therefore, • may be possible to change the
less sensitive to price changes which
cash strapped firms may decide to cut their losses and let these marketing mix to target a new
can lead to high profit margins
products fail group of consumers
• limitations of branding
• keep your dog as a pet - as long as they remain profitable, dogs • money will need to be invested
should be maintained as the surpluses can be invested in the • takes time and money and if brands try to
into market research expand into unrelated markets it can
company’s stars and problem children. If dogs begin to experience
• this may find a new geographical damage brand value is consumers do not
a negative cash flow, they should be allowed to die
location or a new use for the value the link
• Evaluation product, for example red bull was • Packaging
• advantages initially targeted at tired bus • distinct packaging like pringles tube
• allows companies to identify the products of their product allows brand to stand out from
portfolio to maximise revenues drivers, but it is now also targeted
at the younger generation to help competition and encourages customer
• gaps in the current portfolio can be identified and targeted loyalty
• offers simple and clear guidance them study late
• Functions of packaging
• provides advice as to which products deserve financial support • product update
• protect the product, communicate
• disadvantages • could include new packaging or information, promote the product and
• placements of products is subjective as there is no guidance as new features, this allows communicate USP, make the product
to what high or low market share or market growth are businesses to keep up with rivals easy to sell
• external factors are not considered while creating desire from current • guerilla marketing and packaging
• limited use if corporate objective is not growth customers to invest in the latest • companies have developed unique,
• cannot be used as a forecasting tool functional packaging that helps to raise
models (iphone and car
• profitability and pricing strategies are not considered awareness and improve brand image,
• manufacturers)
for example SONY selling headphones
• promotion
for swimmers in water bottles
• BOGOF
