There are some activities that are carried out to bring a product to the market. These activities are known as the marketing mix. The activities include in the marketing mix are product, price, place, and promotion.
The producers first conduct research to understand consumer needs. After that, they design the product according to the needs of the consumer. When a designed product or service comes into the market, they advertise it to ensure the consumers that this product or service meets all their needs. To communicate effectively, the producers give their product a brand name that reminds the consumer again and again when they decide to buy something.
A brand name helps a lot to consumers to understand that it is the product that solves their problem. The key characteristic of a brand name is its uniqueness that makes it different from other products available in the market.
Types of Products
There are various types of products that are designed for their target market. Some of these types of products are discussed below:
These goods are produced for a common person. People buy and consume these products on a regular basis like grocery items etc.
Just like consumer goods, consumer services are also produced for common people. Car repairing workshops and hairdresser shops are common examples of consumer services.
These goods are produced to be consumed by other businesses like different pipes that are made only for industrial use.
Just like producer goods, producer services are also designed for other businesses like advertising agencies that advertise various products of different producers.
Advantages and Costs of Developing New Products
Designing a new product is considered beneficial for the business organization. There are various benefits of designing new products. Some of them are discussed below:
A unique selling point or USP makes the product different from others available in the market.
With the help of a new product, a business diversifies itself and offer more products for its consumers.
Business expands with the help of new products. This expansion could be in new markets or in existing markets both.
Besides these advantages, there are some disadvantages to developing a new product as well that are being discussed below:
Cost of Market Research
Market research is a pre-development activity that also carries a huge cost.
Trial Product Cost
Before launching a product, trials are conducted that costs too much.
In case, if a newly developed product fails to meet the needs of consumers, the sales cost including sales force expenses costs a lot to the business.
If a product fails in the market, it damages the image of the business organization as well.
Brand image; impact on sales and customer loyalty
A unique brand name makes the product different from other products available in the market. Customers can easily recall the name when they go shopping.
If a good brand name is advertised well, there are more chances for the product to be successful.
It is easy for a good brand name to maintain customer loyalty. It is commonly observed that when customers choose a specific brand name, they always prefer to buy it over other brands.
Brand image is basically an image of the product in the mind of the consumer. It helps the consumer to differentiate it from other products. It is basically what consumer thinks about a specific product or service.
It is a brand image that converts an ordinary cola drink into a great Coca-Cola.
The Role of Packaging
The packaging is basically a physical cover of the product. Good packaging also appeals to the consumer to buy the product.
Having the packaging right is also important as other functions of the marketing mix. There are two main functions of packaging i.e. protection and promotion of the product.
The product is secure if packaged safely. The packaging doesn’t make the products safe only but the packaging is helpful in transportation as well. Packaging helps to use the product easily. You may consider how difficult it will be to use if the hair shampoo is available in tin packing.
Packaging helps to enhance the brand image of the product. It is packaging that is seen at first sight, not the actual product. As it appeals to the consumer, it is very important to have its colors, shape, and size accordingly. A low-cost product could be sold in simple and normal packaging but a luxurious item must have excellent packing.
The Product Life Cycle
None of the products can last forever. There is a life cycle of products as well. There are some stages of the product life cycle that are being discussed below in detail:
At this stage, the product development process undergoes market research. After conducting market research, the company decides how a product should be designed.
At this stage, the product is introduced in the market through the sales team but at this stage, very few people buy it as they hesitate to buy a new product. There is a low-profit margin at this stage of the product life cycle.
At this stage, the sales grow rapidly as people know the product in the market because of advertising and promotional activities.
At this stage, the sales become slow because of the intense competition in the market. To maintain sales, lots of promotional activities and the use of advertising are required.
At this stage, the sales reach the highest point and to maintain sales, advertising and promotional activities are required. A fall in profits is commonly observed due to no increase in sales.
At this stage, a decline in sales is observed. Many new products in the same category capture the market. The company takes the decision to withdraw the product from the market because they bear the loss in running that product.
A Product Life Cycle is described through a diagram
Picture source: Business Studies 4th Edition by Karen Borrington and Peter Stimpson
Affect of product life cycle on marketing decisions
Different stages of the Product Life Cycle help the business organization to take decisions. At the introduction stage, there is more need for advertising and promotional activities because the company needs to build a brand identity. At this stage, prices are set low to attract consumers. At the growth stage, prices are high as compared to saturation and decline stages while less advertising and promotional activities are done at saturation and decline stages.