The Marketing Mix: Product (Edexcel IGCSE Business)

Revision Note

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

An Introduction to 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

Diagram: The Four P's of the Marketing Mix

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

Goods & 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

  • 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

Diagram: The Process of new Product Development

4--stages-in-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 

  2. 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

  3. 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

  4. 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

  5. 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

Costs

Benefits

  • Market research collection and analysis regarding the new product is time-consuming

  • Sell more products/services to existing customers

    • Making the most of existing relationships is cheaper than finding new customers

  • Investment in Research and Development and design can be very expensive

  • Developing new products spreads fixed costs like premises or salaries across a wider range of products

  • The costs of producing trial products, including the costs of wasted materials, can be significant especially if innovative materials/components are used

  • Diversifying the products it offers means a business is less reliant on certain customers or markets

  • Low sales if the target market is wrong or if market or technical research leads to the development of an inappropriate product or service for the market

  • Can create a unique selling point by developing a new innovative product for the first time in the market

    • This USP can be used to charge a high price for the product as well as be used in advertising

  • Damage to the brand if the new product fails to meet customer needs

  • Charge higher prices for new products

    • Pricing strategies such as price skimming can be used for innovative new products

Examiner Tips and Tricks

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

  • 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

Apple iPhone

Ferrero Rocher

screen-shot-2024-02-06-at-3-40-15-pm
screen-shot-2024-02-06-at-3-40-29-pm
  • Apple’s IPhone packaging is designed to open slowly

  • First customers lift the box top and a moment passes before gravity overcomes a slight vacuum and the bottom slowly descends

  • One by one, layers within the box are revealed with elements such as cables wrapped like origami

  • Each chocolate is wrapped in luxurious gold foil, placed in a fluted paper cup and topped off with a gold-fonted label

  • Chocolates are arranged and stacked in a clear carrying case with rounded edges ensuring they can be viewed from any angle

Tiffany

Pringles

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  • Tiffany’s packaging - including its iconic Blue Box represents the entire retail enterprise

  • The colour shade, tissue paper and satin ribbon are protected by trademark and empty boxes and bags are often posted on sites like Etsy or eBay

  • A small silver and enamel Tiffany Blue Box is now even sold as a wearable charm

  • Pringles resealable paperboard tube with a metal base and plastic cap is designed to stand up as well as ensure freshness and prevent damage 

  • Upon his death in 1998 the packaging creator insisted he be buried in a Pringles can as he loved his design so much

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Lisa Eades

Author: Lisa Eades

Expertise: Business Content Creator

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

Steve Vorster

Author: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.