The Marketing Mix: Product (Edexcel IGCSE Business)

An introduction to the marketing mix

Spec point — 4.3.1 · The marketing mix

• The marketing mix provides a framework for businesses to create and implement successful marketing strategies

  • Sometimes known as the 'Four P's', it represents the key elements of a marketing strategy: product, price, place, and promotion
  • These four components work together to satisfy the needs and wants of a target market while achieving the company's objectives

• By understanding and manipulating the marketing mix, businesses can differentiate themselves from competitors, maximise marketing impact and achieve long-term success

The four P's of the marketing mix

Businesses combine the 4 P's of the marketing mix in appropriate and unique ways to maximise their chances of success

Goods and services

Spec point — 4.3.1 · the difference between goods and services

• Goods are tangible objects that can be handled, used and stored

  • Consumer goods are used by an end consumer

    • Durable goods can be used over and over again without wearing out, such as mobile phones, vehicles and beds
    • Non-durable goods are consumed soon after they are purchased, such as chocolate bars, deodorant and milk

  • Producer goods are used by businesses to produce other goods, such as tools and office equipment

• Services are intangible actions that cannot be touched, seen or stored

  • Personal services are provided for individuals, such as tutoring, hairdressing or travel insurance
  • Commercial services are provided to businesses, such as commercial cleaning or specialist recruitment services

• In some cases, goods are sold with accompanying services

  • E.g. Electrical goods such as televisions or computers are sold with product guarantees, or customers can purchase additional insurance

Developing a new product

Spec point — 4.3.1 · development of a new product/service

• One way to stay ahead of the competition is by developing new products and innovating existing ones
• The process of new product development involves a number of important stages

The process of new product development

*New product development is a lengthy process that typically involves generating ideas, developing prototypes and test launches prior to the full launch  *

1. Generate ideas

• New product concepts are discussed and brainstormed using customer suggestions, ideas from competitors’ products, employees’ ideas and information collected through market and technical research

1. Select the best idea

• Ideas are weighed up with some dropped and others chosen for further research
• This decision relates closely to costs and likely demand
• Research includes looking into forecast sales, size of market share, and cost-benefit analysis for each product idea

1. Develop a prototype

• This allows the operations department to see how the product can be manufactured, any problems or difficulties arising from its production and how to fix them
• Computer simulations are often used to produce 3D prototypes on screen

1. Test launch

• The developed product is sold to on a small scale to a limited market to see how well it sells before its full launch
• Changes may be needed prior to an expensive, large scale launch
• Digital products like apps and software run beta versions, which is a method of test-launching

1. Full launch of the product

• The finalised version of the product is launched to the entire target market

Costs and benefits of new product development

Exam Hint In the exam you may be asked to explain why a business might consider introducing new products. Explanation questions do not require you to use the business context in your answer. Give a reason and then make two points of development for that reason.

The importance of packaging

Spec point — 4.3.1 · packaging and its importance

• Packaging is the physical container or wrapping for a product. It is also used for promotion and selling appeal

• Packaging is normally designed to

  • **Present **products in the most practical yet attractive way
  • Communicate the quality of the product
  • Catch the customer's eye when they shop
  • Provide** key information to customers**
  • Establish the business brand image
  • Protect a product from damage

• To stand out from the competition and establish a long-lasting relationship with consumers, brands are investing more money than ever before in creative and environmentally friendly packaging designs

  • This is becoming increasingly important for businesses as they place a greater emphasis on sustainability and their CSR policies

Examples of memorable packaging