Marketing Principles

Anislag National High School Senior High School Anislag, Daraga, Albay

SUMMARY OF THE REPORT UNIT 4:DEVELOPING THE MARKETING MIX (LESSON 11: PROUCT)

Prepared by: Shella Dae Maño Diana Mae Mariñas Abegail Masayda Blessie Merilles

G12-ABM

PRODUCT Marketing Mix - important tool used in introducing and selling product to consumers - set of strategies that marketers use to effectively determine the needs of their target markets, and to sell products that will respond to those needs

4P’s - essential elements of the marketing mix - introduced by E. Jerome McCarthy in 1960 - refers to product, price, placement, and promotion - served as tools for marketers to determine how to develop and sell their products effectively - marketers can effectively entice consumers to purchase certain products or brands, and ensure their loyalty to these brands

4E’s - introduced by Brian Fetherstonhaugh of Ogilvy and Mather (well-known marketing agency) in 2009

- introduced the 4E’s as a way of updating the 4P’s - refers to experience, everyplace, exchange, and evangelism

Product to Experience - before, marketers used to be highly concerned solely with a product’s unique features and benefits for customers However, this approach may not guarantee a customer’s loyalty to a brand - instead, it is much more effective to also pay attention to the overallexperience or the “customers journey”. Customers journey starts from the time that a product is discovered and extends to the time that the customers purchases the product. - marketers should be aware of the external influences that drive customers to buy a product, and the consumption experience of customers. This will help marketers find out how customers will be enticed to make another purchase in the future.

Place to Everyplace - before, products used to be placed strategically in locations where they can be easily found. Distribution channels are also chosen to carefully in order for the products to reach customers at the soonest time possible. - However, a modern consumer is most likely always on the go; hence, he or she may have less time to look for distribution outlets to purchase products. This can also mean that a customers may have less time to actually examine a product’s feature before buying it. - it is more important to think of interactive and convenient alternative to engage customers. Products need to be made available anytime and anywhere at the customer’s convenience.

- Marketers can also utilize other outlets to communicate with customers about their products and brands. These outlets can include websites and mobile applications

Price to Exchange - traditionally, marketers used to solely consider the price of their products when selling them - Marketers used to focus on keeping the prices of products low so that customers are enticed to buy them. They bargain with suppliers to purchase raw materials at a lower price, thus making the final selling cost also lower - Mareketers should not only focus on the price of the products, but also consider the overall value that the product can provide customers. Customers must be guaranteed that a sufficient amount of effort, detail, and quality comes with purchasing the product

Promotion to Evangelism - product promotion should highlight certain features or benefits that one can gain form using it. This may still be considered important in marketing a product. However, it may be just as essential to extend the promotion of a product to evangelism - means marketers can associate their products with a mission or an ideal, such as fostering relationships or practicing determination in one’s life. Practicing evangelism in marketing can provide inspiration to the customers in one way or another, and further entice customers to purchase a certain product

Products

- are tangible objects that a company sells to a customers for their use or consumption. These products are expected to satisfy customers and business buyers. - examples of products include the goods bought in supermarkets such as fruits, vegetables, and cooking essentials; products can also include equipment such as machines, and raw materials such as textiles and metals

Services - are also sold by a company to a set of consumer - tend to be intangible, directly delivered to the customers by a company’s employees - delivering services, involve the use of products. Example of services are repairs and legal constitution

*These services and products all contributes to the customer’s overall experience with a company. When a company delivers a high quality services and products, it will most likely to ensure a favorable experience for the customers. In turn, this can lead to a continued patronage of the company by the consumer. The sales of the company’s product and services may also increase, thus strengthening its position in the market,

Levels of a Product 1. Core Product - this level refers to the benefit that a consumer can gain from using a product. It can thus be considered the main reason for purchasing a product - for example, as its core, a laptop is portable computer or device that can be used for office needs and communication. This will be the main benefit of using a laptop, and thus, will be the main motivation for a customer to purchase one

2. Actual Product - corresponds to the tangible characteristics of the product, including its features and packaging and another characteristics that is part of this level is the product’s brand name - example, for a laptop, customers may look into its technical specifications such as its memory capacity and its processing power. Customers tend to associate certain brand with high and low product quality. With this, marketers are expected to ensure that their products have high quality in order to protect the image of their brands 3. Augmented Product - refers to the service- based add-ons that customers are entitled to upon purchasing the product - for instance, customers who purchase laptops are entitled to a warranty provision; free operating system that comes with the product; and in some cases a replacement period for the laptop’s parts

Classification of Products - product can be classified into consumer goods and industrial goods - these types of goods are primarily distinguishes based on (1) who purchases them and (2) why they are purchased

Consumer goods - products and services purchased by customers for their own use, and are thus frequently purchased - examples are detergent products, condiments, and food. Consumer goods can be highly specialized to a particular type of company, such as jewelry and signature clothes

Industrial goods - purchased by businesses and are used in the creation of a new product which shall be eventually sold to others - includes capital goods such as heavy equipment and raw materials which are further processed or modified in order to become a new product. Examples of raw materials are metal, mineral, fruits, and vegetables

New Product Development - process that involves the conceptualization and creation of innovative products that will catch the attention of customers and ensure their loyalty to a particular brand - developing new products often requires extensive research and labor on the part of a company or firm

Seven stages in the process of developing new product: 1. Idea generation - the company searches for and surveys new ideas to be used in developing a product. This can involve the company’s sales and executive teams to generate ideas based on market trend research - scientist also contribute to the generation of ideas. For instance, scientist from proctor and gamble helped developed a formula for synthetic detergents, which became one of the well-known features of Tide products - for example, the adhesive used for 3M Post-it were the first discovered in 1968 by Spencer Silver. However, the actual product was only developed after Art Fry, a fellow

scientist of Silver, further discovered its potential. The 3M Post-it notes were officially introduced to the market in 1980, and have become well-known ever since 2. Idea screening - the stage when the ideas generated by the company’s sales and science experts are carefully scrutinized to retain only those ideas which have the potential for a successful sales performance, and eliminate those which may fail 3. Concept development and screening - at this stage the product has at least a hypothetically high chance of succeeding in the market. The concept is expanded and tested with a group of customers. Their feedback then serves as the basis for enhancing the concept for the product 4. Market and business planning - the target market is concretely identified and characterized and the profit objectives are planned. - in addition the other components of 4P’s are identified- the price, placement and promotion of the product. - sales projections are made, as well as the costs and profit estimates from the product 5. Product development - the concept is developed into a product prototype - involves the efforts of both the marketing and research departments of companies - it may take months or years to create a product prototype and ensure that it will pass both technical and commercial standards 6. Test marketing - once a product prototype is developed, its marketability is tested with a particular group of customers in a specific location

- reaction of customers towards the product are then gathered and analyzed - this will help address any problem concerning the marketability of the product before it its officially introduced to potential customers 7. Commercialization - after the product prototype has been tested, the company or the firm will make its final decision on launching the product - commercialization can be a soft launch or a full scale launch

Soft launch - the product will be tested with a limited number of customers - it is not only the marketability of the product that is being tested, but also the usability and features of the product - involves one or two components of the 4P’s in the marketing mix - involve price discounts and lower-budget promotion schemes, like the use of flyers and brochures and the response of the potential customers are gain and analyzed - commonly practiced among restaurants and food businesses in the Philippines - for example, MetroPlate had its soft launch in 2013 which focused on delivering food products to customers. In this soft launch, MetroPlate saw that customers had insufficient time to contact the company for deliveries

Full -scale launch - serves as the official launching of the product - involves the extensive utilization of the components of the 4P’s - the product is sold at its official price, and it is marketed heavily through various means, such as posters and advertisements on television and online

- for example, MetroPlate then made a full-scale launch in 2014, and has since focused on improving the quality of its services and products for its customers

Product Line - group of similar products offered by the same company under the same brand - products in a product line may differ in their sizes, variants, or flavors and may differ in their specific types, but are all under a general class - for example, Johnson and Johnson;s line of baby products which includes baby lotion, baby bath, and baby shampoo products, These all correspond to different types of products, but are all under one general class, which is infant care -marketing a product line attracts more customers as they have varying preferences and needs - for example, a certain customers may specifically prefer anti- bacterial soap, a second customer may specifically prefer an anti-acne ointment, and a third customer may prefer a whitening deodorant - if a brand wants to cater all these types customers, it must be able to sell all three types of soap to the market. Through this, the probability for the product and the brand can be increased, and theses can have a higher chances of succeeding in the market - marketers are expected to closely monitor the performance of each product in then product line - unprofitable ones are eventually dropped from the line to avoid losses and to protect the image of the product’s brand -there are also instances when the product line is expanded meaning additional sizes and variants of the same product are also sold - for instance, Unilever and Procter and Gamble promotes different variants and scents of their shampoo and detergent brands

Product Life Cycle - defined as the period of time that a product is introduced, sold, and eventually removed from the market - composed of four stages: introduction, growth, maturity, and decline - some marketers classify their products according to their stages

4 Stages 1. Introduction - stage where product is launched in the market - companies spend great amounts of money to develop and introduce their products to customers - marketers are expected to find ways to launch products in the best way possible, without incurring large cost 2. Growth - stage when product gains acceptance in the market, and the profits for the firm or company start to increase - point when a product may be sold under different brands and theses brands attempt to make their own, distinct version of the product being sold - becomes the challenge for marketers and companies to maintain high sales and ensure loyalty of their customers 3. Maturity - the product has been in the market for a long period and competition has also increased

- marketers face the challenge of a possible decline in the sales of the product and they attempt to address this challenge through improving the features of the product or even cutting down its price 4. Decline - profits and sales for the product continue to decrease - consumers may begin to favor a new product which will eventually prevail in the market - companies and firm may be left with no choice bu to ultimately drop the product, in order to avoid incurring huge cost and low profits

History of Apple II

Introduction

The apple II was introduced in 1977 at the Wesr Coast Computer Faire, in San Francisco, USA. This was the first event where personal computers were shown to the general public. The Apple II was also marketed through advertisements. During that time, one of the selling points of the Apple II was its color monitor and graphics features, It was one of the first computers that had such features and was available to ordinary consumers

Growth

The Apple II later experienced a surge in sales with the introduction of the VisiCalc in 1979. The VisiCalc was the first ever computer spreadsheet program, and it was only compatible with Apple II. This convinced more customers to purchase Apple II units. By September 1980, 130,000 Apple II units have already been sold. During that time, the Apple II also faced competition from products such as the TRS-80 from Tandy Corporation and Commodore PET from Commodore International

Maturity

The Apple II eventually faced its toughest competition with the introduction of the IBM Personal Computer in 1981. Sales of Apple II and other Apple products started to decrease as more consumers started to take interest in the IBM Personal Computer. In order to improve the sales performance of the company, Apple introduced more advanced but less expensive versions of the Apple II

Decline

As the IBM Personal Computer became the leading competitor in the market, the sales for the Apple II continued to steadily decrease.

Eventually the product of Apple II units was discontinued, and Apple began to develop and market a new computer product known as the Macintosh

Marketing Strategies for Service Firms 1. Selecting and training employees - companies and firms must select employees who will help them deliver excellent services to their customers. These employees must then be trained and oriented to meet the needs of customers. 2. Associating effective customer service with employee motivation - training must be done in an environment that inspires employees and satisfies their needs. This will then lead to greater productivity and motivate employees to put more efforts in delivering services to customers. 3. Delivering high quality service - when employees are satisfied, aware of the company’s objectives, and knowledgeable about the needs of customers, they will most likely provide high quality services. This will ultimately lead to satisfaction of customers. 4. Building a strong and loyal customer base - when customers are satisfied with a service, they will most likely recommend it to other people. Eventually, the popularity of the service will increase. As long as the company and its employees maintain high quality of their service, they can build a loyal customer base that will continually patronized their service.