The Marketing Mix Chapter Outline Chapter 8 THE MARKETING MIX ...

Marketing activities are heavily dependent on the stage in the product life cycle.Product development - begins with an idea.Preliminary analyses should be conducted to determine the product's technical feasibility andmarket potential.Many product failures could be prevented by researching the idea prior to marketing.Sales and Profits During the Product Life CycleStage One - IntroductionProduct is first marketed.1. Marketing decisions will initially focus on getting consumers to experiment andthen adopt the product.Stage One - Introduction2. Extensive promotional campaignsand special price incentives are used to launch new products.3. Small number of competitors.4. Profits are negative due to high costs of developing new product.Stage Two Market Growth High growth in sales.1. Competitors are preparing to enter the market.2. Whether or not firm faces competition will depend on how easily the product is copiedand any relevant patents or copyrights.3. Most profitable stage since sales are strong and the number of competitorsis small.Stage Three Market MaturityLeveling off of sales as only the latest adopters have not yet purchased the product1. Sales will consists mostly of repeat or replacement sales.2. Competition is likely to be strong since the market is no long growing and more firmsare competing.3. Heavy pro-+motion expenditures and price cutting occurs as firms attempt to solidifytheir market position and weak firms are driven out.Stage Four – Decline - Sales decline stage - length of product is unpredictable.1. Some product sales do not decline.2. Most products will eventually enter the sales decline stage and be replaced by a newproduct.3. Only the strongest firms will survive.Product Life CycleStages of product life cycle will not be obvious or clear cut.Life cycle should not be viewed as unchangeable and uncontrollableProduct DecisionA. Product accessories (instructions, warranties, packaging) may be what distinguish it from acompetitor's product.B. For a product to be successful, it must satisfy the needs of consumers in the chosen targetmarket better than any other product.Products with broad appeal are vulnerable to competition.C. Product accessories may offer an opportunity to differentiate the product by better tailoring theproduct to the needs of the target market.D. Some product accessories may be offered as options.E. Package decision is one of the most visible product decision areas, and often one of the mostimportant.1. Some products have become successful because of their package.2. Convenience has become a prime consideration in package as well as product design.F. Physical appearance of the package should not be overlooked.G. Products intended for intermediate customers should emphasize functionalityPrice PolicyA. Describes the mechanism by which prices are to be determined