4.5 The 7 Ps - Product

product

refers to any good or service that serves to satisfy the needs + wants of customers + can be tangible + intangible

consumer products

these are purchased by private individuals for their personal use

producer products

these are industrial goods that are purchased by businesses to use in their production process

product portfolio analysis

it looks at market growth + market share to assess the market potential for new + existing products

strategic business units (SBUs)

ex: KFC, Pizza Hut, Taco Bell

the boston matrix - dogs

low/low - generate little revenue as markets declining + products should be dropped

the boston matrix - question marks

high/low - products that have high potential but require large investment to develop into stars + they generate low revenue

the boston matrix - stars

high/high - successful products that generate large revenue + become cash cows as market growth slows but require large investment to develop + promote

the boston matrix - cash cows

low/high - products that are mature + established, require minimal investment, + are used to maintain stars + grow question marks from sales revenues

the boston matrix - uses

• identifies the need to rebalance portfolio

• it is a dynamic model as products can change categories

the boston matrix - limitations

• high market share does not always lead to profits

• does not identify causes of product positions

• should be used with other planning tools

product life cycle (PLC)

shows the different stages that a product is likely to go through from its initial design + launch to its decline

product portfolios

refers to the collection of all the products owned by a business at a point in time

features of the research and development stage

lot of money invested on a new idea, no sales revenue, no product for sale yet, high research + development costs, prototypes + test markets used

features of the launch stage

product introduced to the market, sales increase slowly, extensive promotion, products are not profitable yet, goal is to move to the growth stage asap

buyers in the launch stage are known as…

innovators

features of the growth stage

rapid increase in sales, sold in more places, strong profits, more opps, product differentiation strategies are used

buyers in the growth stage are known as…

early adopters

features of the maturity stage

sales increase + peak, economies of scale are possible, heavy promotion, more variations of product, unsuccessful opps drop from the market

buyers in the maturity stage are known as…

majority

features of the decline stage

sales + profits fall, demand is low, promotion stops

buyers in the decline stage are known as…

laggards

extension strategies to extend the length of the maturity stage

price reductions, redesigning, repackaging, new markets, new promotional activities

branding

refers to a name or trademark that is identifiable with a business or product

brand awareness

the extent to which potential customers (the public) recognize a particular brand

brand development

refers to the marketing process of improving + enlarging the brand name

brand loyalty

occurs when customers buy the same brand time + time again + have preference for one brand over others

brand value

refers to the premium that customers are willing to pay for a brand name over + above the value of the product itself

marketing ____ exists when a business becomes complacent about its product strategy.

myopia

____ brand names become synonymous with the name of the product itself due to their popularity (ex: BandAid, Jacuzzi).

genericize

_____ are the consumers who first own a certain product, usually due to the prestige associated w being first / loyalty.

innovators

____-brand strategy involves a business developing more than one brand as part of its overall product strategy.

multi

a _____ is a trial product, used during the pre-launch stage of the product life cycle, to evaluate product potential.

prototype

_____ marketing is when a business trials a new product with a small number of customers.

test

a ____ is a form of legal protection for intellectual property (IP) that gives the biz owner exclusive use of the name.

trademark

____ is a term used by the Boston Consulting Group to refer to any product that generates significant income.

cash cow

____ are products in a BCG matrix that compete in high market growth industries, but have low market share.

question marks

____ are products in the Boston Matrix that have high or rising market share in a high growth market.

stars

____ are products in the BCG matrix that have low market share and operate in low growth or stagnant markets.

dogs