Marketing basics – the marketing mix and product lifecycle
By Joanne Mansell.
You may have “built a better mousetrap” but if people don’t know about it – no one will buy it. The idea of marketing is to encourage the customer to make a buying decision to purchase your product. This consists of a number of parts, depending on how well known your industry, product and business are. The parts or decisions a customer must make are:
Do I need to buy a product (or can I do it myself)?
Which one will I buy? How much (if anything) will I pay for it?
For example - a product like Coca-Cola has
less decisions to overcome or be involved in.
Once the consumer has decided they want a drink and will buy a beverage,
for many consumers it then becomes a question about whether to buy a coke or an
alternative (Pepsi, Lemonade, water…).
Marketing generally refers to the
identification and fulfilment of customer needs – for the coke this is
“I’m thirsty” or “I want a drink”.
Marketing also involves the creation and/or
addition of value – the Coca-Cola company might say not only does it stop your
thirst but you’ll look “cool” drinking one.
The marketing also centres around fun and weekends or holidays (and other
desirable things) and not the office where many a caffeinated beverage is
Marketing, may also cover creating a need
(demand) for a product or service that the business can produce or procure and
distribute cost effectively. “Aren’t you hungry?” is a marketing phrase
designed to create a need.
is the marketing mix?
The marketing mix is commonly known as “the 4 P’s” that is product, price, placement and promotion. These are the points you could emphasise in marketing messages (including brochures, business cards, advertisements etc).
PRODUCT. What is the business
selling? This should relate to
customer needs and wants rather than what R&D [research and development] can
(or has) developed.
PRICE. How much does the product
or service cost? In fixing or
creating or determining your product price, you need to consider the cost of raw
materials, fixed and variable costs, R&D costs, quality improvements,
quantity discounts (if applicable) scarcity/demand and competitors pricing.
PLACEMENT. How is the product
delivered or made available to the consumer or customer?
This can include location of stores if applicable, or online purchasing
and distribution. How convenient is
it to order, or purchase this product.
PROMOTION. How the products
existence, price and availability is made known to the target market – also
called “advertising”. Promotion
also includes packaging, image, name/trademark/branding.
Promotions can be done by samples or by discounting and special offers or
The marketing mix is about how you use these
four P’s. All four will be
included in the marketing “story” (advertising) but different emphasis may
be placed on any of the P’s depending on the product and business as well as
the industry in particular how competitive the industry is and on what the
competition is based (often price).
Applying the marketing mix aims to make you
memorable to your customer, and give them a reason to buy your product or
service, when they are “looking to buy”.
One way to determine the mix of the P’s
is to categorise your SWOT elements (Strengths, Weaknesses, Opportunities and
Threats) as related to Product, Price, Placement or Promotion and use that in
the advertising story. Make the
strengths known and be sure to mention all of the P’s.
Consumers notice omissions as well as claims!
way to determine the mix of P’s in your marketing is by using the product life
The life cycle can be considered for a product,
company/business or an industry as a whole.
When launching new product lines the business owner or manager should be
mindful to space out the launch so that the decline of one product will be
offset by the growth of another which can help create a more even and dependable
The product life cycle has 4 distinct
phases, which are not usually of equal length.
Introduction is when the product is new and customers need to be made aware of its
existence. Advertising is largely
informative. At this stage money is
being spent (on R&D and perhaps advertising) and very little is being
recovered in sales.
Growth is where the product sales are increasing and the profit may be starting
to recover the costs of introduction. This
is the beginning of breaking even.
Maturity is where the product has become accepted. Sales are likely to be repeat business or new customers
willing to try it now that it is common, accepted or more affordable.
Advertising may be more persuasive (to create brand loyalty) and present
an image of “value for money”.
Decline is where sales are dropping off. Demand
is dropping because customers already have all they need, are bored with the
product or want something different. At this stage the product is likely to be redeveloped
(changed colors, sizes, features etc) or repackages to maintain interest or a
reason to buy. An example of this
is the repackaging (new line) or breakfast spreads such as “Nutella” and
“vegemite” into snack packs. Advertising
may resort to being comparative with competitors to win back market share or
sales. Advertising may be as a
reminder to encourage consumers to keep thinking of buying the product or that a
new (and improved) version will be on its way soon.
marketing mix and product life cycle are
related. In the life cycle
descriptions above the 4 P’s have been notes in capitals.
The mix and emphasis of product, placement, price and promotion is
determined by where in the life cycle the product is, that is what elements
should be emphasised to the consumer. Similarly
the advertising scope and purpose is tailored to the life cycle.
Ultimately the consumer is in charge (or should be given the illusion
that they are!) that the product, it’s price and availability should suit the
In summary - key points to consider in your Advertising Budget:
The stage in
the product life cycle for each of the product, business and industry.
New products typically need large advertising budgets to build awareness
and gain consumer trial.
High market share requires higher advertising spend (related to sales) to
maintain market share.
clutter. In a crowded market a
brand must be advertised to be heard. McDonalds
advertises the brand “McDonalds” to get people in the door, they do not
promote individual products like a “Fillet
o fish” or “Big Mac”. Please
note that I am using McDonalds and coke as examples of brand marketing
strategies – and not as a diet I would encourage!
frequency. Repetitions require
differentiation requires advertising. Advertising
can be used to point out the USP.
Marketing can be
easy. The points in this article
should give you some starting points on what to say. My October article should have given you ideas on who to say
it to (market research). The most
important thing is to say or do something.
As I said at the start of this article – you may have a better
mousetrap (or a better, faster, cheaper, etc ANYTHING) but if your potential
customers don’t know, you won’t sell many!
more information on these concepts, or to book a business or life coaching
session with the author, Joanne Mansell please phone 0416 181 654.
The first half hour consultation is complimentary.
For more articles (including business planning basics) see www.kaizencoaching.com.au
Mansell, Kaizen Coaching – “Mind, Body, Life Fitness”
(c) Kaizen Coaching 2000-2014. Trademarks Kaizen Coaching, Building an Extraordinary Business and Sportsmind are used with permission of their respective owners.