Question

Identify and describe the stages of the product life and at least two key impacts on marketing mix actions for each of the 4Ps

Answer 1

After having been launched, a product should enjoy a long and happy life. But each product has a product life cycle (PLC) – the product’s life is not infinite.

In order to cover all the effort and risk that went into launching a product, the company wants to earn a decent profit. The company must be aware that the product will not sell forever: it goes through the product life cycle stages.

Before discussing the product life cycle stages, it is wise to explain what the product life cycle actually is. The product life cycle (PLC) is the course of a product’s sales and profits over its lifetime.

Product Life Cycle Stages

There are five distinct product life cycle stages:

Product Development. When the company finds and develops a new product idea, product development starts. During product development, sales are zero, and the company’s investment costs increase.

Introduction. Sales slowly grow as the product is introduced in the market. Profits are still non-existent, because the heavy expenses of the product introduction overweigh sales.

Growth. The growth stage is a period of rapid market acceptance and increasing profits.

Maturity. In the maturity stage, sales growth slows down because the product has achieved acceptance by most potential buyers. Profits level off or decline because marketing outlays need to be increased to defend the product against competition.

Decline. Finally, sales fall off and profits drop.

Different Products – Different Product Life Cycle Stages

Not all products follow all five stages of the product life cycle. While some products are introduced and die quickly afterwards, others stay in the mature stage for a very long time. Some are cycled back into the growth stage after reaching the decline stage through strong promotion or repositioning. In fact, a well-managed brand could live forever if wise strategies are applied. Examples include Coca-Cola, Gillette, American Express, which still live on after more than 100 years.

"Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4Ps is one way – probably the best-known way – of defining the marketing mix, and was first expressed in 1960 by E. J. McCarthy.

The 4Ps are:

Product (or Service).

Place.

Price.

Promotion.

Impact of Marketing Mix on 4Ps -

Product

When it comes to the product, it is either a tangible good or an intangible service that meets a particular customer’s need or demand. There is a logical product life cycle which all products should follow. As such, it is crucial for marketers to understand as well as plan for different stages and their specific challenges. Understanding the problems that the product is trying to solve is very important. This calls for a study of all the product’s features, its distinctive selling proposition plus the benefits it offers. Besides, the product’s prospective buyers need to be recognized and understood.

Price

Price refers to the real amount the end user is expected to pay for the product. The price of a product affects how it performs on the market. This is related to the product’s perceived value to the customer as c opposed to the product costing. A product with a higher or a lower price tag than its perceived value will not sell. As such, understanding how a customer perceives what you are selling is extremely important. It is possible for a product to be priced higher than its true monetary value and still sell if it enjoys a positive customer value. On the other hand, a product may need to be underpriced for it to sell if the customer considers it of little value.

Factors such as distribution plans, value chain costs, markups and the way competitors price a rival product may also affect the price.

Promotion

The promotion plan comprises of the marketing communication strategies and techniques. These may entail advertising, sales promotions, special offers, as well as public relations. Regardless of the channel used, the promotion should be appropriate for the product, the price as well as the targeted end user. Distinguishing between marketing and promotion is vital. It should be borne in mind that promotion is merely the whole marketing function’s communication aspect.

Place

How the product will be provided to the customer is what determines the place or its placement. Thus, a product’s distribution is a major element in determining a products placement. The placement strategy can be helpful when it comes to assessing the most suitable channel of distribution to be used.