NickelsCore3e_ch12

Managing the Marketing Mix: Product, Price, Place, and Promotion

Learning Objectives

  • 12-1 Explain the concept of total product offer and summarize the functions of packaging.
  • 12-2 Contrast brand, brand name, and trademark, and discuss the concept of brand equity.
  • 12-3 Describe the product life cycle.
  • 12-4 Identify various pricing objectives and strategies, explain why nonpricing strategies are growing in importance.
  • 12-5 Explain the concept of marketing channels and the value of marketing intermediaries.
  • 12-6 Discuss the differences between wholesale and retail intermediaries and explain the various kinds of nonstore retailing.
  • 12-7 Define promotion and list the traditional tools that compose the promotional mix.
  • 12-8 Assess the effectiveness of various forms of sales promotion.

Getting to Know Katrina Lake, Founder of Stitch Fix

  • Katrina Lake's background includes:
    • Grew up in San Francisco and Minnesota.
    • Describes herself as both risk-averse and imaginative.
    • Initially aspired to become a doctor but switched to economics and consulting.
  • Stitch Fix:
    • A unique shopping experience combining online retail and physical stores.
    • In-house stylists use expertise and data analytics for clothing selection based on customer style surveys.
    • The development of this system required extensive trial and error, resulting in over four million clients served.

Product Development and the Total Product Offer

  • Value: Customers' perception of value varies based on numerous factors.
  • Product Development: A critical activity in modern business, requiring adaptation for new markets.
  • Products Consumers Will Not Give Up:
    • Internet service
    • Cell phone service
    • Discount apparel
    • Haircuts and coloring
    • Fast food
  • Products Deemed Expendable (subject to spending cuts):
    • Luxury handbags
    • Satellite radio and streaming services
    • Specialty apparel
    • High-end cosmetics
    • Spa treatments

Developing a Total Product Offer

  • Products are assessed on multiple dimensions:
    • Tangible dimensions (physical attributes)
    • Intangible dimensions (perceived value, brand image)
  • Marketer's approach: Engage with consumers to determine what attributes are valued.

Product Innovation During the Great Depression

  • Notable Product Developments:
    • 1929: Electric razors
    • 1930: Car radios, supermarkets
    • 1933: Chocolate chip cookies, laundromats

Product Replacement Examples

  • Products Replacing Other Products:
    • Friendster → MySpace → Facebook
    • Nokia → Blackberry → iPhone
    • TiVo → Blockbuster → Netflix
    • AltaVista → Yahoo → Google
    • The Shop Around the Corner → Borders → Amazon
    • Polaroid → Canon PowerShot → Smartphones
    • PlayStation → Wii → PlayStation 5

Components of a Total Product Offer

  • Designing a total product involves various layers/platforms to connect with different consumer needs.

Product Lines and the Product Mix

  • Product Line: A group of items catering to similar markets and facing comparable competition, which may include competing brands.
  • Product Mix: All the product lines a manufacturer offers.

Product Differentiation

  • Refers to real or perceived differences in products.
  • Requires establishing a unique image to gain competitive advantage, particularly for smaller businesses.

Innovative Packaging

  • Innovative packaging enhances product appeal (e.g., fruit snack boxes shaped like fruit).
  • Examples of brands effectively using unique packaging to stand out in the market.

Functions of Packaging

  1. Attracts buyer's attention.
  2. Protects contents and deters theft.
    3.