Impact of Product Decisions on Marketing Mix

8/3/2019 Impact of Product Decisions on Marketing Mix

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Session : 6

PRODUCT

Impact on Marketing Plan


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It can be said that a product is acombination of several characteristics-

physical and psychological. How

people personally feel about, orperceive the product is just as

important as the actual physical

characteristics of it.

What is a Product:


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A product is really a bundle of potential

benefits offered to a purchaser.

To make their product distinct from others

the manufacturers identify them to thecustomer, that is, `differentiate', by using

different packaging, colouring etc. and by

emphasizing different benefits oradvantages in their promotion.

Product Differentiation:


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A manufacturer can use the need-oriented segmentation.

Positioning is used for bringing about

differentiation in a manufacturer's

product.

This concept of product positioning canbe done in terms of pricing, contents

and in many other ways.

Product Positioning:


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a toothpaste manufacturer may appealto prevention of `tooth decay', while

another might offer `sociability' in the

sense of preventing bad breath. Stillanother may provide the need to be

`attractive' by emphasizing the

whiteness of the teeth which hisproduct, toothpaste, gives.

For example


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Who is the product aimed at?

What benefitwill customers expect?How does the firm plan toposition

the product within the market?

What differential advantage will the

product offer over their competitors?

When an organization introduces a product

into a market they must ask themselves a

number of questions.


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Kotler suggested that

a product should be viewed in three levels.


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When placing a product within amarket many factors and decisions

have to be taken into consideration.

Product Decisions


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Product designWill the design be the

selling point for the

organization as we have

seen with the iPod, the

new VW Beetle or the

Dyson Ball vacuum

cleaner.

Product Decision


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Product quality

Quality has to

consistent with

other elements of

the marketing

mix. A premium

based pricing

strategy has toreflect the quality

a product offers

Product Decision


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Product features

What features will you

add that may increase

the benefit offered to

your target market?

Will the organization

use a discriminatory

pricing policy foroffering these

additional benefits?

Product Decision


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Product branding

One of the most important decisions a

marketing manager can make is about

branding. The value of brands intodays environment is phenomenal.

Brands have the power of instant sales,

they convey a message of confidence,quality and reliability to their target

market.

Product Decision


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concerned with the combination of

individual products offered within a givenline. The product-line manager supervises

several product managers who are

responsible for individual products in the

line. Decisions about a product line are

usually incorporated into a marketing plan

at the divisional level. Such a plan specifies

changes in the product lines.

Product-line decisions


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(1) considering expansion of a givenproduct line;

(2) evaluating the effects of product

additions and deletions on the

profitability of other items in the line;and

Product-line managers responsibilities:


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(3) considering candidates for deletion

from the product line;

(4) allocating resources to individual

products in the line on the basis of

marketing strategies recommended byproduct managers.

Product-line managers responsibilities:


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Decisions at the first level of product

management involve the marketing mix

for an individual brand/product. These

decisions are the responsibility of abrand manager (sometimes called a

product manager). Decisions regarding

the marketing mix for a brand arerepresented in the product's marketing

plan.

Product-line decisions


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price level,

advertising expenditures for the coming

year,

coupons,trade discounts,

distribution facilities, and

a five-year statement of projected sales

and earnings.

The plan for a new brand would specify


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The plan for an existing product would

focus on any changes in the marketing

strategy. Some of these changes mightinclude the

product's target market,

advertising and promotional expenditures,

product characteristics,

price level, and

recommended distribution strategy.


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Product Decisions


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The width of a product mix refers to

the total number of different productlines of the company. For example,

width = 2 (pasta and pasta sauces).

The length of a product mix refers tothe total number of brands in all of the

companys product lines.

A companys product mix refers to the total

number of products that are offered for

sale. The product mix has certain width,

length, depth and consistency.


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The depth of a product mix refers to the

average number of variants of the

companys products. For example, depth = 4 (threepasta brands, each marketed in two sizes: 3 2 = 6 and 2

pasta sauce brands, each marketed in 1 size:

2 1 = 2 means 6 + 2 = 8/2 = 4).

The consistency of a product mix refers

to how closely related are the companys

productlines in terms of characteristics,

production process, distribution channels

to name just a few.


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Product Service Decisions


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Branding is more than just a businessbuzzword. It has become the crux of

selling in the new economy. Brand in

its simplest form, a brand is a noun.

Brand is a collection of feelings andperceptions about quality, image,

lifestyle and Status .

Branding


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Professor David Jobber identifiesseven main factors in building

successful brands, as illustrated in the

diagram below:

What factors are important in

building brand value?


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Quality is a vital ingredient of a goodbrand. Remember the core benefits

the things consumers expect. These

must be delivered well, consistently.The branded washing machine that

leaks, or the training shoe that often

falls apart when wet will never developbrand equity.

Quality


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Quality

Research confirms that,

statistically, higher quality

brands achieve a highermarket share and higher

profitability that their inferior

competitors.


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Positioning is about the position a

brand occupies in a market in theminds of consumers. Strong

brands have a clear, often unique

position in the target market.

Positioning


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Positioning can be achieved throughseveral means, including brand name,

image, service standards, product

guarantees, packaging and the way in

which it is delivered. In fact,

successful positioning usually requires

a combination of these things.

Positioning


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Masoom Pears


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Repositioning occurs when a brand

tries to change its market position to

reflect a change in consumers tastes.This is often required when a brand

has become tired, perhaps because

its original market has matured or hasgone into decline.

Repositioning


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Pulsar Definitely Male to Digital Biking


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Communications also play a key rolein building a successful brand. We

suggested that brand

positioning is essentially aboutcustomer perceptions with the

objective to build a clearly defined

position in the minds of the target

audience.

Communication


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All elements of the promotional mix

need to be used to develop and

sustain customer perceptions.Initially, the challenge is to build

awareness, then to develop the

brand personality and reinforce theperception.

Communication


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Business strategists often talk aboutfirst-mover advantage. In terms of

brand development, by first-mover

they mean that it is possible for thefirst successful brand in a market to

create a clear positioning in the minds

of target customers before the

competition enters the market.

First Mover advantage


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This leads onto another important factor

in brand-building: the need to invest in

the brand over the long-term. Building

customer awareness, communicating

the brands message and creating

customer loyalty takes time. This means

that management must invest in abrand, perhaps at the expense of short-

term profitability.

Long term perspective


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Finally, management should ensure that

the brand is marketed internally as well

as externally. By this we mean that the

whole business should understand the

brand values and positioning. This is

particularly important in service

businesses where a critical part of the

brand value is the type and quality of

service that a customer receives.

Internal Marketing


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Brands represent enormously valuablepieces of legal property, capable of

influencing consumer behavior, being

bought and sold, and providing thesecurity of sustained future revenues to

their owner. The value directly or

indirectly accrued by these variousbenefits is often called brand equity.

Brand Equity


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A basic premise of brand equity is thatthe power of a brand lies in the minds

of consumers and what they have

experienced and learned about thebrand over time. Brand equity can be

thought of as the "added value"

endowed to a product in the thoughts,words, and actions of consumers.

Brand Equity?


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The sources of brand equity help

managers understand and focus on

what drives their brand equity; the

outcomes of brand equity help

managers understand exactly how

and where brands add value.

Brand Equity

BRAND

Brand Position


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BRANDIMAGE

How the brand

is now perceived BRAND IDENTITY

How strategists want thebrand to be perceived

BRAND POSITION

The part of the brand identity

and value proposition to beactively communicated to atarget audience

Brand Position


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T

HANK

YO

U

Impact of Product Decisions on Marketing Mix

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