4.5-marketing mix-product

what is the marketing mix?

The marketing mix is the 7 elements businesses combine to successfully market a product or service.

Product Life Cycle

Development → Introduction → Growth → Maturity → Decline

Extension strategies

An extension strategy is something a business does to extend a product's life beyond its natural life cycle, particularly when it has reached decline.

Product-related extension strategies

and

Promotion-related extension strategies

What generally happens at each PLC stage?

Development = no sales, high costs
Introduction = low/slow sales, high promotion
Growth = rapidly increasing sales
Maturity = high sales but slowing growth
Decline = falling sales

What are extension strategies?

Techniques used to extend a product's life beyond its natural life cycle by boosting sales and maintaining profitability.

Product-related vs promotion-related extension strategies?

Product: improvements, line extensions, repositioning.
Promotion: advertising changes, price promotions, sales promotions.

What does the BCG Matrix analyze?

A business's product portfolio according to market share and market growth.

	High market share	Low market share
High market growth	⭐ Star	❓ Question Mark / Problem Child
Low market growth	🐮 Cash Cow	🐶 Dog

What is a Star in the BCG Matrix, and what are its implications?

• High market share + high market growth

• Strong position in a rapidly growing market

• Generates significant positive cash flow, but usually requires continued investment

• Business invests to maintain/increase market share

• Marketing focuses on brand recognition and continued growth

• Strategy: HOLD → continue investing in product development, marketing and innovation; potentially expand into new markets

• Goal = maximize its growth potential

What is a Cash Cow in the BCG Matrix, and what are its implications?

• High market share + low market growth

• Usually an established product in a mature market

• Generates significant positive cash flow

• Has limited growth potential

• Requires relatively little additional investment compared with growing products

• Marketing focuses on maintaining market share, profitability and customer loyalty

• Strategy: HARVEST → improve efficiency/reduce costs and maximize the cash generated

• Cash generated can be used to fund Stars or promising Question Marks

What is a Question Mark in the BCG Matrix, and what are its implications?

• Low market share + high market growth

• Product is weak currently, but operates in an attractive/growing market

• Has the potential to become a Star

• Often creates negative cash flow because significant investment may be needed to increase market share

• Marketing focuses on building market share and brand recognition

• Strategy: BUILD selectively → invest in marketing, R&D/product development if the product has strong potential

• If investment fails to increase market share → business may withdraw resources/discontinue it

Key idea: High potential, but high risk/uncertainty.

What is a Dog in the BCG Matrix, and what are its implications?

• Low market share + low market growth

• Weak position in a market with little growth potential

• Usually generates little revenue/cash

• Business normally minimizes further marketing/investment

• Strategy: DIVEST → sell, discontinue or gradually withdraw the product and redirect resources elsewhere

• However, don't automatically divest: it could still generate cash or serve a profitable niche

Key evaluation: A Dog today could potentially become more valuable if market conditions change.

What is a possible progression of a successful product through the BCG Matrix?

Question Mark → Star → Cash Cow → Dog

• Question Mark gains market share → Star

• Market growth eventually slows while share remains high → Cash Cow

• Product eventually loses market share in the low-growth market → Dog

⚠ Not guaranteed — products do not have to follow this exact path.

Why might a business want a mixture of products across the BCG Matrix?

• Different products have different cash-flow and investment needs

• Cash Cows generate cash

• Cash can fund Stars and promising Question Marks

• Stars may become future Cash Cows

• Reduces reliance on one product

• Helps the business allocate resources strategically across its portfolio

Limitations of BCG

Too simplistic — only share/growth
Present-focused — doesn't predict future changes
Ignores interdependencies — products can support each other
Time-consuming — accurate/current data required

What is branding?

The process of creating a unique and identifiable name, design, symbol, or feature that differentiates a product/service or business from competitors.

What is corporate/manufacturer branding? What are its main advantages and disadvantages?

• Uses the company name/logo across its products/services

• Builds strong company-wide recognition, trust and loyalty

• Existing reputation can make new products easier to launch

• Marketing multiple products under one brand can reduce marketing costs

• BUT a problem with one product can damage the reputation of the whole brand/product portfolio

What is product branding? What are its main advantages and disadvantages?

• Creates a unique name/design/symbol for a specific product

• Creates distinct product identity and differentiation

• Allows different products to target different market segments

• Can create loyalty around a specific product's quality/benefits

• BUT separate brands are costly to create/promote

• New products cannot necessarily rely as strongly on an existing brand identity

What is own-brand/private-label branding? What are its main advantages and disadvantages?

• Retailer uses its own name/brand to sell products

• Can differentiate retailer through exclusive products

• Often allows lower prices than established branded alternatives

• Exclusivity can increase retailer loyalty

• BUT consumers may perceive own-brand products as lower quality

How can strong branding affect price elasticity of demand?

Strong branding → customer loyalty → fewer consumers willing to switch to competitors after a price increase → demand becomes less price elastic → business may have greater ability to charge higher prices.