The marketing mix consists of four different elements, which are known as the ‘four Ps’:
These elements need to work together if a business is to sell its products or services successfully.
Understanding customer needs is vital to ensure that a business is able to supply products that customers want to buy, at a price that allows the business to make a profit. Some products are completely new inventions, but many are the result of innovation. There is an important distinction between the two:
Invention means creating something that did not previously exist, eg self-tying shoelaces. Entrepreneurs are always trying to think of new products and services to launch, but it can be challenging to come up with a completely new and unique idea.
Innovation is the successful commercialisation of an invention, or the adaptation of a product over time to improve its features. It involves changing existing processes or creating new, more effective processes, products and ideas. Businesses can spend large amounts of money on research and development in order to develop their products.
Whether an invention or an innovation, a successful product starts with a good design that meets the needs and wants of customers. When designing a product, a business will usually consider three factors:
Once it has been designed and is ready to launch, a product will typically go through four different phases during its life. These phases are referred to as the product life cycle.
|Phases of the product life cycle||Explanation|
|Introduction||The product is launched, so sales may be low because only a small number of customers are aware that the product exists.|
|Growth||As more customers become aware of the product, sales increase rapidly, especially if customers like it.|
|Maturity||Sales reach their peak during this phase, as the product becomes established. It may become a regular purchase for customers who like it.|
|Decline||Sales fall during this phase as the product loses popularity and customers look for alternatives. It is withdrawn when it becomes unprofitable.|
The level of sales determines where a product is in its life cycle. This can be illustrated visually on a graph:
The life cycle, and how long it takes a product to go through its life cycle, can vary enormously from one product to another. Some products will exist for years before entering a decline, while other less successful products may go through their life cycle very quickly. How long a product lasts will depend upon:
Extending the product life cycle
Developing new products is expensive and takes time, so businesses will usually try to extend the life cycle of a product and prevent it from going into decline. To do this, they need to find ways of keeping people interested in the product for longer, thereby increasing the number of sales.
There are a number of ways that a business can extend the life cycle of a product: