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The Product

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The word product is given a very wide meaning in marketing.

The word “product” includes:

the good or service purchased

the packaging and labelling that surrounds a good

the brand name of the product.

Definition of a ProductT

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Product Life Cycle

Successful, long lasting products have a

four-stage life cycle.

These life cycle stages are:

Introduction

Growth

Maturity

Decline

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Introduction Stage

The introduction stage is

the most difficult stage in

the life cycle of a

product.

The first stage starts

when the product is

launched on the market.

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Introduction Stage

Sales growth is likely to

be slow because many

consumers will not be

aware of the existence

of the product and the

new product has to fight

for market share with

better known existing

products.

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Introduction Stage

Spending on

promoting the

product is likely to

be high.

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Growth Stage

The second stage in the life cycle of a

successful, long lasting product is the

growth stage.

In the growth stage, a product will

typically experience a rapid increase

in sales.

Many consumers are aware of and

are using the product.

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Maturity Stage

In the maturity stage of a

successful, long lasting

product’s life cycle, the

sales slow down, reach a

peak and start to decline.

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Maturity Stage

The maturity stage usually

lasts much longer than the

introduction and growth

stages.

In the maturity stage, it may

be necessary to modify the

product in an attempt to

increase the sales.

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Decline Stage

× In the decline stage, the sales

of a product continue to fall.

× The sales fall for a number of

reasons, including changes in

the tastes of consumers, the

introduction of new technology

and competition from other

products.

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Decline Stage

The product will continue to be

made and sold as long as it is

profitable.

The decline stage may last for a

number of years.

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Strategies to Revitalise

a Product A successful product that is in the late

maturity or decline stage of its life

cycle may be revitalised by using a

number of different strategies.

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Product Modification

This strategy involves

altering the product to

increase the demand

for the product. The

changes made to the

Barbie Doll in the late

1990’s are an example

of the use of this

strategy.

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Product Re-positioning

A product’s “position” in a market is the attitude that most consumers have about the product or the qualities that most consumers believe the product has. For example, Volvo is perceived as being a safe car to drive.

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Product Re-positioning

A marketer may be able to change the positioning of a product, and restore its profitability, by changing the way that a product’s benefits are understood by consumers.

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Product Line

A product line is

the number of

different products

sold by a business

that are used for

similar purposes.

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Product Mix

Many businesses offer more than

one product to consumers.

The full range of products offered

for sale by a business is known as

the product mix.

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Product Mix

The product mix of a business can

be divided into two parts:

the product depth, and

the product breadth

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Product Depth

The product depth is the number of

different products in each product line.

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Product Breadth

The product

breadth is the

number of product

lines that a

business has.

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Branding

There are a number of important issues

concerned with the branding of a

product.

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Definition of a Brand

A brand is a name or symbol

that identifies a product and

enables consumers to

distinguish the product from

other similar products.

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Features of a Good

Brand Name

1 A brand name can suggest product

benefits. For example: Eveready

batteries.

2 A brand name should be easy to

pronounce and easy to recognise.

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Features of a Good

Brand Name

3 A brand name should be different

from other brand names.

4 A brand name can be a group of

letters that has no meaning. For

example: Kodak.

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Advantages of Branding

The development of a brand

name provides advantages to

both consumers and sellers of

a product.

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Advantages to Consumers

1 Brand names enable

consumers to identify the

products they like or dislike.

2 Consumers may gain

satisfaction from owning a

product with a well known,

high quality brand name.

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Advantages to a Business1 A brand name helps a business

to distinguish its products from the products offered by competitors.

2 A brand name can help a business launch a new product as the new product can carry the same brand name as a popular, well established product.

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Advantages to a Business

3 A business, in respect to

some products, may be

able to charge a premium

price (a higher price) for

products that carry a well

known brand name.

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Generic Brands

Generic brands are regularly purchased consumer products that have no brand name on them.

Generic products include tea bags and tissues. These products are cheaper than the branded products of the same type but may be of a slightly inferior quality.

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Packaging

Packaging is used to attract the

attention of consumers.

Packaging will often need to be

changed or refreshed after a period

of time.

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Packaging

Packaging is the container that

surrounds a good.

Packaging can be an important part of

the marketing strategy of a business

and can give a product a competitive

advantage.

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Functions of Packaging

Packaging has a four main functions.

Packaging identifies and promotes a product. A distinctive package will often attract the attention of consumers.

Packaging can identify differences in a company’s line of products.

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Functions of Packaging

Packaging has a four main functions.

Packaging has a functional role as a storage container for a product and protects the product from damage.

Packaging is used to alert consumers to an attempt to interfere with the contents of the product. Packaging should be tamper obvious.

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Labels

A label is the part of the packaging of a

good on which is written the name of

the good and other information such as

the country of manufacture of the good.

Labels have a number of functions.

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Labels

A label enables a consumer to identify a product.

A label contains information about the contents of a product and identifies the country of origin of the product.

A label contains information about how to use a product.

A label can be used to promote a product.

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Material used in the PowerPoint slides

and worksheets have been reproduced

from the following reference with full

permission:

Business Management in Australia 2

Ashley Doyle

ReferenceT

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