Marketing mix -Product

Product life cycle

The theory that a product moves through different stages; Introduction, growth, maturity and decline.

Stage one - Research and development

This is when the product is not on the market yet meaning that research and development and testing is being taken place.

Prototypes are built and modified before a product is ready for launch.

No sales are being made.

Development costs will need to recover later.

Stage two- Introduction

Product is launched on the market.

Advertising costs will be high in order for the product to get noticed.

Stage three- Growth

Sales begin to rise.

Advertising costs are still high

A profit may be made if all research and development and advertising costs have been recouped.S

Stage four- Maturity and saturation

Sales are at their peak.

Advertising can be reduced as product is now well known.

Stage five- Decline

sales begin to fall.

Extending the product life cycle

When a product reaches the decline stage a business can act to extend its life cycle:

Change product

Change price

Change place

Change promotion

Change packaging

Change usage

Change name

Product portfolio

A product portfolio is the range of items sold by a business.

Advantages

Having a range of products can lead to greater brand awareness.

Easier to launch new products due to greater brand awareness.

Can meet the needs to different market segments.

Disadvantages

Increased research due to development costs due to multiple products being produced.

Marketing and advertising costs may be high due to the promotion of a large range of products.

Bad publicity incurred by one product may affect sales of all products within the portfolio.

Boston Matrix

A diagram that allows a business to analyse its product portfolio or product mix.

Star

Products have a high market share in a fast growing market.

Cash Cows

Have a high market share in a slow growing market.

Question marks/ Problem children

Products have a low market share in fast growing market.

Dogs

Products with a low market share in slow growing markets.