Marketing Plans, Branding &

Communications Enterprise & Project Management

Please note that these slides are not intended as a substitute

to reading the recommended text for this course.

Elements of the Marketing Mix

Product classification

Issues managing a product range

BCG Matrix

Objectives

1

All elements within the control of the firm that communicate the firm’s capabilities and image to customers or that influence customer satisfaction with the firm’s product and services:

– Product

– Price

– Place

– Promotion

Traditional Marketing Mix

2

People

– All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment.

Physical Evidence

– The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.

Process

– The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems.

Expanded Mix for Services – The 7 Ps

3

Expanded Marketing Mix for Services

4

Overall Strategic Assessment

– How effective is a firm’s services marketing mix?

– Is the mix well-aligned with overall vision and strategy?

– What are the strengths and weaknesses in terms of the 7 Ps?

Specific Service Implementation

– Who is the customer?

– What is the service?

– How effectively does the services marketing mix for a service communicate its benefits and quality?

– What changes/ improvements are needed?

Ways to Use the 7 Ps

5

Consumer Product Categories

– Convenience Products

– Shopping Products

– Specialty Products

– Unsought Products

• (1) Products of which consumers are unaware

• (2) Products that consumers do not consider purchasing until a need or emergency arises

Product Categories

6

Business / Industrial Goods Product Classifications

– Raw Materials – plastic, metal ore

– Component Parts – Intel chips for PCs

– Accessory Equipment - PCs

– Installations – assembly lines

– Supplies – office stationary

Product Categories

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Core Product – all products in a category would have these

Actual / Basic Product – actual features

Expected Product –what is expected by the customer – performance, efficiency

Augmented Product – after sales services, warranties

Potential Product – better fuel economy for cars

Product Categories

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Product Lines and Product Mixes at Gillette

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Product Range = Depth & Consistency (Benefits 2 Consumers)

Extend by – Introducing

variations to the model – different colour of paint

– Differentiating the quality of products – premium range v bargain basement range

– Developing associated items – paint trays, brushes, etc

– Developing new products - wallpaper

Broad issues

– What role does the product play in the range (Flagship, Niche, tester)

– How are resource be allocated between products

– What should be expected from each product

– Are they part of the brand family

Management of Product Range

10

Various Portfolios / Strategic Business Units (SBUs)

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12

Boston Consulting Group (BCG)

Analyzes business opportunities according to growth rate and market share

Product strength in the market

measure of

market

attractiveness Dominant position;

growing industry

Poor position;

growing industry

Dominant position;

low-growth industry

Poor position; low-

growth industry

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Stars - Stars are high growth products competing in markets where they are relatively strong compared with the competition

– Often they need heavy investment to sustain their growth. Eventually their growth will slow and, assuming they maintain their relative market share, will become cash cows.

Portfolio Models - BCG

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Cash Cows - Cash cows are low-growth products with a relatively high market share. These are mature, successful products with relatively little need for investment – Diet Coke / Lynx / Pampers

– They need to be managed for continued profit -

Question marks - Question marks are products with low market share but which operate in higher growth markets. This suggests that they have potential, but may require substantial investment in order to grow market share at the expense of more powerful competitors – Cherry Coke / Angry Birds

– Management have to think hard about "question marks" - which ones should they invest in? Which ones should they allow to fail or shrink?

Portfolio Models - BCG

15

Dogs - Unsurprisingly, the term "dogs" refers to products that have low relative share in unattractive, low-growth markets – car line ends

– Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.

The BCG matrix provides a framework for allocating resources among different business units and allows one to compare many business units at a glance.

Portfolio Models - BCG

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BCG Example

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The classification makes it possible to ask the right questions and take appropriate action; for example,

– if a Cash Cow is making losses it is likely that costs are not being controlled effectively;

– if a Star is losing market share it may be because it is being managed as if it were a Cash Cow.

Applying the BCG Matrix

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