Monday, 15 September 2014

Product in your Marketing Mix

This week – fruitsofsuccess- is featuring a Marketing Week. There will a new post on a marketing related topic each day. Today’s subject is....

Nestle Nespresso's VertuoLine
 at Macy's East Pearson St., Chicago a week ago.
VertuoLine was launched in Feb 2014
especially for the large cup American and Canadian markets
No company's products, policies or forward product planning can remain static.  The needs of your consumers are constantly evolving, technological changes will make many of your existing and successful products obsolete, your competitors enter your successful markets and economic factors can modify consumer purchasing behaviour.

Product planning is vital so that

·         your products are continuing to meet changing consumer needs

·    your sales results can be monitored against forecasts

·        your new marketing ideas can be evaluated and introduced if they are acceptable

·         your profits today can finance tomorrow's new products.

Product Life Cycles
All products pass through five stages in their life, although the length of the cycle varies according to each individual product.






A Flip chart exercise: where delegates have plotted
 on a generic product life cycle diagram various
products in their range
Each of these five stages has distinct characteristics.

DEVELOPMENT STAGE - Based on evaluation of Marketing Research, products are designed, prototypes originated and tested, financial and human resources are allocated to the product's development.  Investment is relatively high and income is zero.  Many product ideas will be eliminated at this stage.

INTRODUCTION STAGE - When the product is launched, considerable marketing effort and promotional expenditure will be necessary.  Income at this stage is minimal, but future profits should offset these early losses.

GROWTH STAGE - By this time, the investments made in the development and introductory phases should begin to pay off.  The cumulative effect of the promotional mix should stimulate an upward growth for the product.  Profits will be at their highest during this stage, paying back a high proportion of the preceding investment.  If the product is proving successful, competitors will begin to enter the market.

MATURITY STAGE - When a product reaches this stage there are generally a number of competitors, and promotional expenditure to defend market positions will tend to reduce profits, but sales will start to peak out.

SATURATION and; DECLINE STAGE - As the market becomes saturated a downward trend in sales and market size will occur and profits will markedly shrink at this stage.  The product is approaching its period of phasing out.

Product Types

Products fall into three distinct categories:

1.       INNOVATIVE            -    i.e. totally new products


2.       ADAPTIVE       -    existing product being modified to stretch its life cycle
3.       IMITATIVE  -    products which are very close to those already on the market ('Me Too' products).
Centre Shelf with Nescafe pods versus other me too 


Although many firms will develop their own products, there are three other methods by which they can enter a market:

          -    by ACQUISITION   take-over of other companies to enter alternative markets
          -    by MERGER          where two or more companies will effectively
              or JOINT             merge, either in terms of companies as a whole or
              VENTURE            a merging of specific product marketing.

product mix

Delegates decide on the elements within the marketing mix
Effective product planning should aim to develop a satisfactory mix of products to ensure a wider market base.  This can be done either by DIVERSIFICATION into different products or by ADAPTATION of an existing product to enter new segments of the market.

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