Product Marketing: Life Cycle, Branding, Pricing & Distribution

Posted on Aug 17, 2024 in Economy

Product Marketing

Item 1: Product Definition

From a marketing perspective, a product is defined as a set of characteristics perceived by consumers that are expected to satisfy certain desires and needs. This includes both physical or tangible assets and services, although their characteristics differ significantly.

Product Life Cycle

  1. Introduction

    The product enters the market with slow sales growth and minimal, often negative, profit. The focus is on acquiring new customers through advertising and investment.

  2. Growth

    Market acceptance leads to increased sales and profitability due to higher prices, novelty, limited competition, and growing demand.

  3. Maturity

    This stage has two phases: Turbulence (sales growth slows) and Saturation (sales stagnate and decline). The focus shifts to retaining market share, maintaining profits, and adapting to increased competition.

  4. Decline

    Sales decline rapidly as consumer interest wanes. Companies may seek alternative consumer groups, modify the product, or adjust pricing before withdrawing it from the market.

Packaging and Containers

Packing

Any material used to temporarily wrap or pre-package products during handling, transport, storage, or presentation for sale, providing protection and facilitating these operations.

Packaging

Any material used to contain a product, preserving its initial characteristics, protecting it from alteration, and potentially enhancing its presentation for sale.

Key Difference

Packing primarily focuses on protection and facilitation of handling, transport, and storage. Packaging aims to contain, individualize, dose, preserve, and uniformly present the product.

Package Features

  • Preservation and protection of product quality and integrity.
  • Product and brand identification and differentiation.
  • Support for promotion.
  • Potential for future or multiple uses.
  • Facilitation of correct product usage.

Branding

A brand is a name, term, symbol, design, or combination thereof, used to identify products or services and differentiate them from competitors. It comprises two elements:

  • Brand Name: The phonetic part, including words, letters, and numbers.
  • Logo: The visual representation of the brand.

Brand Characteristics

  • Simple and short for easy recall, reading, and pronunciation.
  • Easy to recognize and remember.
  • Euphonious (pleasant sounding).
  • Suggestive of the product.
  • Distinctive from competing brands.
  • Legally protected.

Brand Classes

  • Unique Brands: Used for an entire product line (e.g., IBM, Fiat, Roca).
  • Individual Brands: Each product has its own distinct brand.
  • Multiple Brands: Manufacturers use various brands for different products (e.g., detergents, beverages).
  • Trademarks: Brands created by a manufacturer for a distributor (e.g., Walmart, IFA, Carrefour).

Product Line and Range

A product line consists of products sharing at least one common characteristic (e.g., brand, packaging, color) and targeting a common audience. Line depth is determined by the number of products within the line. The product range encompasses all product lines offered by a company, forming its product portfolio.

Pricing

Price is the value consumers are willing to exchange for a product. Determining the right price is crucial, balancing profitability with consumer acceptance and competition.

Pricing Strategies

  1. Penetration Pricing: Entering the market with low prices to gain market share, followed by gradual price increases.
  2. Maximum Price (Prestige Pricing): Setting high prices to project a premium image, often used for luxury goods.
  3. Commitment Pricing: Utilizing strategies like discounts, bonuses, and rebates to attract customers without revealing the final price.

Commercial Distribution

Commercial distribution encompasses all activities from product development to consumer purchase. Its functions include:

  • Transportation and distribution of production.
  • Grouping products into sales lots.
  • Storage.
  • Presentation services, promotion, customer advisory, installation, repair, maintenance, and delivery.

Distribution Channels

Paths followed by a product from production to consumer, involving intermediaries performing various distribution functions.

  • Short Channels: Direct producer-to-consumer sales or involving a single broker.
  • Long Channels: Involve at least two intermediaries between producer and consumer.

Communication

The process of transmitting stimuli to influence consumer attitudes and behavior.

  • Advertising: Paid communication to inform and persuade potential customers about product qualities and benefits.
  • Promotion: Temporary incentives or added value to encourage purchase.
  • Public Relations: Building and maintaining a positive company image.
  • Publicity: Unpaid media coverage (e.g., press releases, influencer mentions).
  • Sales Teams: Direct communication between salespeople and customers.
  • Merchandising: In-store activities and strategies to promote sales and enhance the customer experience.