Combining the Marketing Combining the Marketing MixMix

• Product Life Cycle and the Marketing Product Life Cycle and the Marketing MixMix

• Marketing Mix Decisions for Marketing Mix Decisions for Consumer and Industrial servicesConsumer and Industrial services

Introductory stage of the PLC Introductory stage of the PLC and the MMand the MM

• ProductProduct

• New to the market. New to the market.

• Quality problems Quality problems may occurmay occur

• Risk is highRisk is high

• Product mix may Product mix may go through few go through few modificationsmodifications

• PlacePlace

• Distribution is limitedDistribution is limited

• Channels have to be Channels have to be motivated to carry the motivated to carry the productproduct

• May have problems in May have problems in getting shelf spacegetting shelf space

• Lot of personal selling Lot of personal selling to be done at the level to be done at the level of channelsof channels

• PricePrice

• Pricing strategy Pricing strategy may differ from may differ from Skimming to Skimming to penetrative penetrative depending on the depending on the nature of the nature of the product and the product and the status of the status of the product/brandproduct/brand

• PromotionPromotion

• Lot of advertising Lot of advertising and public relation and public relation activities will be activities will be done to make the done to make the market aware of market aware of and arouse interest and arouse interest for the productfor the product

Growth Stage of PLC and Growth Stage of PLC and MMMM

• Rapid climb in salesRapid climb in sales

• Rising sales are linked to increasing Rising sales are linked to increasing profitabilityprofitability

• Competitors will enterCompetitors will enter

• Demand increasesDemand increases

• ProductProduct• Product is accepted in the marketProduct is accepted in the market• Product quality would improve with changes Product quality would improve with changes

according to the consumers requirementsaccording to the consumers requirements• New models will be introduced to face the me New models will be introduced to face the me

too productstoo products• Acceptance and reliability of the product Acceptance and reliability of the product

would increase the demandwould increase the demand• Product will face struggle to retain Product will face struggle to retain

distinctivenessdistinctiveness

Growth stage….Growth stage….

• PlacePlace

• Many customers now go to fewer Many customers now go to fewer shops than in the past for their daily shops than in the past for their daily requirements of FMCGSrequirements of FMCGS

• Establishing good dealerships and Establishing good dealerships and having the product in leading having the product in leading distributors is very important at this distributors is very important at this stagestage

Growth stage….Growth stage….

• PricePrice

• Price may not change initiallyPrice may not change initially

• At latter part price may be reduced At latter part price may be reduced slightly to face the competitionslightly to face the competition

• Profit per unit would increase due to Profit per unit would increase due to the spread of expensesthe spread of expenses

• Most players will earn good profitsMost players will earn good profits

Growth stage…Growth stage…

• PromotionPromotion

• The promo activities would be directed at The promo activities would be directed at brand building rather than making brand building rather than making awarenessawareness

• Promo cost per unit would be less as with Promo cost per unit would be less as with the increasing volume of sales.the increasing volume of sales.

• Early stages of an promo war could be Early stages of an promo war could be seen with the arrival of major competitorsseen with the arrival of major competitors

Maturity stageMaturity stage

• Maturity stage is the longest stage. Many marketers will Maturity stage is the longest stage. Many marketers will dwell more of their time in marketing a product in the dwell more of their time in marketing a product in the maturity stagematurity stage

• Competition is highCompetition is high• Sales growth has become slowSales growth has become slow• Consumers know about the productConsumers know about the product• Technology is widespreadTechnology is widespread• Many manufacturesMany manufactures• Many distributorsMany distributors• Customers may start switching the other products at the Customers may start switching the other products at the

latter part of this stagelatter part of this stage• A sales decline would experienceA sales decline would experience• Overcapacity in the industryOvercapacity in the industry• Few giant firms may start dominating and weaker may exit Few giant firms may start dominating and weaker may exit

earlierearlier

Maturity stage….Maturity stage….

• ProductProduct

• Product modificationProduct modification

• New users of the same product, offer New users of the same product, offer new value to consumersnew value to consumers

• Abandoning weaker products and Abandoning weaker products and keeping only the strong oneskeeping only the strong ones

• More effort on R&D on productsMore effort on R&D on products

Maturity stage….Maturity stage….

• PricePrice

• Price begin to fallPrice begin to fall

• Low cost approach to e competitiveLow cost approach to e competitive

• Downsizing and up grading plant to reduce Downsizing and up grading plant to reduce costcost

• Offering basic product without extrasOffering basic product without extras

• Cheaper technology and raw materials usedCheaper technology and raw materials used

• Innovative production processInnovative production process

Maturity stage….Maturity stage….

• PlacePlace

• Low cost channels of distribution is Low cost channels of distribution is soughtsought

• The battle for supermarket shelf The battle for supermarket shelf spacespace

• More incentives offered to channelsMore incentives offered to channels

Maturity stage…..Maturity stage…..

• PromotionPromotion• Advertising may be directed to strengthening Advertising may be directed to strengthening

the existing customer base and getting new the existing customer base and getting new customerscustomers

• May be directed to use frequently or to show May be directed to use frequently or to show wider variety of usage.wider variety of usage.

• Directed at stimulating trail in non usersDirected at stimulating trail in non users• Sales promotionsSales promotions• Tie ins with many other products or servicesTie ins with many other products or services• Multipack purchase benefits/ complimentary Multipack purchase benefits/ complimentary

productsproducts

Declining stage of PLC and Declining stage of PLC and MMMM• Shifts in consumer taste, Shifts in consumer taste,

demographic factors, increased demographic factors, increased competition or technological competition or technological obsolesce may decrease the demand.obsolesce may decrease the demand.

• The decline may be slow as in the The decline may be slow as in the sewing machine or rapid as in the sewing machine or rapid as in the floppy disk or video tapesfloppy disk or video tapes

• Weaker will exit if exit barriers are lowWeaker will exit if exit barriers are low

Declining stage….Declining stage….

• Three important factors determining Three important factors determining the attractiveness of the declining the attractiveness of the declining marketsmarkets

• DemandDemand

• Competition/ rivalryCompetition/ rivalry

• Exit BarriersExit Barriers

Five options are available for a Five options are available for a firm in a declining stage of the firm in a declining stage of the market.market.

• ExitExit- selling the business in the early stage of - selling the business in the early stage of declinedecline

• HarvestingHarvesting- Maximising short term cash flow, - Maximising short term cash flow, maintain or increase margins even if it could result maintain or increase margins even if it could result in quicker decrease in the market sharein quicker decrease in the market share

• Maintenance-Maintenance- This is a short term strategy to This is a short term strategy to maintain market share even at the cost of maintain market share even at the cost of declining marginsdeclining margins

• Profitable survivor- Profitable survivor- This aims to increase the share This aims to increase the share of a declining market with a view to future gainsof a declining market with a view to future gains

• NicheNiche- Identify a small segment and concentrate - Identify a small segment and concentrate activity in that areaactivity in that area

MM at declining stage…MM at declining stage…

•ProductProduct• Harvesting- Harvesting- R&D expenditure is eliminated. No new R&D expenditure is eliminated. No new

products or extensions or modifications developed.products or extensions or modifications developed.

• Maintenance- Maintenance- Product and process expenditures are Product and process expenditures are maintained for the short termmaintained for the short term

• Profitable survivor- Profitable survivor- Product and process Product and process expenditures are maintained for the short term as part of expenditures are maintained for the short term as part of strategy of pursuing increased market sharestrategy of pursuing increased market share

• NicheNiche- Continues product and process R&D aiming at - Continues product and process R&D aiming at [product improvements or modifications to appeal to a specific [product improvements or modifications to appeal to a specific segment of the market that has not been served properlysegment of the market that has not been served properly

MM at declining stage…MM at declining stage…

•PricePrice• Harvesting- Harvesting- Cost cutting across the board. Price Cost cutting across the board. Price

may be raised to maintain marginsmay be raised to maintain margins

• Maintenance- Maintenance- Lower prices, if necessary to Lower prices, if necessary to maintain market sharemaintain market share

• Profitable survivor- Profitable survivor- Lower prices as appropriate Lower prices as appropriate to increase market share even with much lower to increase market share even with much lower marginsmargins

• Niche- Niche- Price depends on the nature of the special segment Price depends on the nature of the special segment targeted.targeted.

MM at declining stage…MM at declining stage…

•PromotionPromotion• Harvesting- Sales and Marketing budgets are slashed.Harvesting- Sales and Marketing budgets are slashed.• Maintenance- Advertising, sales promotions and trade Maintenance- Advertising, sales promotions and trade

promotions are sustained at a level sufficient to promotions are sustained at a level sufficient to prevent any erosion of the market share. prevent any erosion of the market share.

• Profitable survivor- A signal is sent out to the Profitable survivor- A signal is sent out to the competitors that the firm is going to remain in the competitors that the firm is going to remain in the market and will increase the market share. market and will increase the market share. Advertising and Promotions are increased. Strong Advertising and Promotions are increased. Strong trade promos are done to strengthen the channelstrade promos are done to strengthen the channels

• Niche- Advertising and Promotions are concentrated Niche- Advertising and Promotions are concentrated at the selected market with much care .at the selected market with much care .

•Marketing Mix decisions for Marketing Mix decisions for Consumer, Industrial & Consumer, Industrial & Service ProductsService Products

Products

Consumer Industrial

Convenience

shopping

Speciality

Unsought

Staple

Impulse

Emergency

Materials and parts

Capital Items

Supplies & services

Raw Materials

Manufactured Materials

Installations

accessories

Supplies

Business services

ConvenienConvenience goodsce goods

ProductProduct PricePrice PlacePlace PromotioPromotionn

Products needed Products needed to be branded. to be branded. Branded Branded products can get products can get brand loyalty. brand loyalty.

Price is not a Price is not a major criterion major criterion but over pricing but over pricing will loose the will loose the marketmarket

Convenience is Convenience is very crucial. very crucial. Intensive Intensive distribution distribution strategy followedstrategy followed

Advertising Advertising and sales and sales promotion promotion plays a very plays a very

bigbig rolerole

Shopping Shopping GoodsGoodsQuality, features Quality, features and benefits, and benefits, after sales after sales service are service are importantimportant

Prices tend to be Prices tend to be

highhigh. . Hire Hire purchase, credit purchase, credit schemes will schemes will trigger salestrigger sales

Consumers will Consumers will be willing to be willing to spend more time spend more time and energy in and energy in searching the searching the productproduct

Personal selling Personal selling may be good may be good promo tool. promo tool. Advertising also Advertising also may help to may help to make make awareness. awareness. POSM s also POSM s also plays a roleplays a role

Specialty Specialty GoodsGoodsProductProductHighly brand Highly brand conscious. Refuse conscious. Refuse any other brand. any other brand. Quality highQuality high

PricePriceMarket Market skimming . High skimming . High price will meet price will meet the expectation of the expectation of the consumer as the consumer as he seeks high he seeks high qualityquality

PlacePlaceWilling to do Willing to do extensive search extensive search and refuse and refuse alternatives. alternatives. Exclusive Exclusive distribution will distribution will add to the imageadd to the image

PromotionPromotionMass promo may Mass promo may not suit. Adds to not suit. Adds to be placed in be placed in selected exclusive selected exclusive mediums. mediums. Personal selling Personal selling professionalsprofessionals

Unsought Unsought GoodsGoods

ProductProductCustomers are Customers are reluctant to reluctant to purchase. purchase. Benefits Benefits presented should presented should be superior to be superior to perceived costperceived cost

PricePricePrice incentives Price incentives are required to are required to stimulate stimulate purchasepurchase

PlacePlaceSelective as the Selective as the frequency is very frequency is very highhigh

PromotionPromotion

Hard selling, Hard selling, heavy promos, heavy promos, Personal selling, Personal selling, referral sellingreferral selling

Industrial Goods and MMIndustrial Goods and MM

•ProductProduct• Hardly any emotional appealHardly any emotional appeal

• Product purchased for functional Product purchased for functional benefitbenefit

• After sales and Warranty very After sales and Warranty very importantimportant

• Packaging bulk purely to protect the Packaging bulk purely to protect the productproduct

• PricePrice

• High valueHigh value

• CreditCredit

• Lease hire purchaseLease hire purchase

• PlacePlace

• Located in specific places where Located in specific places where industrial customers are industrial customers are concentratedconcentrated

• Not many intermediariesNot many intermediaries

• Specially appointed sales persons Specially appointed sales persons

• PromotionsPromotions

• Direct marketingDirect marketing

• Personal SellingPersonal Selling

• Hardly any advertisingHardly any advertising

• Promote loyaltyPromote loyalty

Services and marketing mixServices and marketing mix

• ServicesServices

• Unique featuresUnique features• IntangibilityIntangibility

• InseparabilityInseparability

• VariabilityVariability

• PerishabilityPerishability

• Marketing Mix is extended to 7 ps by adding Marketing Mix is extended to 7 ps by adding people, process and physical evidence to people, process and physical evidence to the traditional 4 ps.the traditional 4 ps.