Summary
Summary Marketing - 4Ps
- Module
- Marketing - 4Ps (MARKETING)
- Institution
- OCR
This is a summary of the 4Ps of Marketing
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4 PsProduct
Anything made by a business to meet a gap in the market or
satisfy customer needs
Unique selling point (USP) – a feature that separates a product from its
competitors – usually an extra feature or function
Brand – a name, symbol, design or slogan linked to a particular product or
service in order to differentiate from the competition
Product life cycle
Shows the phases a product goes through
from idea to potential decline / exit from
the market
Different depending on product
Market research can not fully predict
future – external factors
Changing strategies often is vital – promotion, pricing
Departments must communicate for success
Stages
Research & development
o No sales
o High costs incurred from R&D as well as opportunity cost
o Being first in market has major competitive advantage
Introduction
o Launch of product
o Focus on attracting early adopters
o Needs heavy spending on promotion
o Negative cash flow
Growth
o Rapid sales as product gains mass appeal
o Needs sufficient capacity for production from rapid growth
o Needs efficient distribution to maintain momentum
o Threat of competition – adapt promotion and pricing strategies
o Begins to make profit
o May improve in quality
o Possibility to target new audiences
Maturity
, o Sales peal due to greater competition and market saturation
o Brands which adapt to customer needs more likely to survive
o Cash cow on Boston matrix
Decline
o Caused by changes in tastes, fashion and change in levels of
competition
o Decisions must be made
Expand life of product
Minimise losses and close production of product
o Other products in portfolio take its place
Extension strategies
o Product successor – better than last product however fits same purpose
– common in technology markets
o Websites and e-commerce – constantly changing
o Must avoid reacting too late
o Examples:
New packaging
Rebranding – changing logos and designs
Facebook -> META
Marathon -> Snickers
Problems
Exact lifespan of a product is never known
Different markets are more / less stable – easier / harder to predict
Hard to decide whether launch is feasible
Business must be able to operate at a loss before making a profit
Measures of product and strategy
Product life cycle
Boston matrix – aids analysis of products at different stages of life cycle to
make decisions – e.g. cash cow at maturity = keep unless profit falls
Ansoff’s matrix
Product portfolio analysis
Product positioning and market mapping
Value analysis
Product portfolio analysis
Examine the existing position of a firms products
Better for larger businesses with many products, product life cycle for smaller
businesses
Plan what to do next
o Building (problem child) – invest in promotion and distribution to boost
sales
o Holding (rising stars) – spending on marketing to maintain sales
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