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a product is generally accepted as the whole bundle of ‘satisfactions’; 
either tangible such as a physical product; or intangible such as warranties; 
guarantees or customer support that support that product。 Generally the 
terms product and service will be used synonymously in this part of this 
chapter。 
The bundle that makes up a successful product includes: 
。 design; 
。 specification and functionality; 
。 brand name/image; 
。 performance and reliability; 
。 quality; 
。 safety; 
。 packaging; 
。 presentation and appearance; 
。 a。。er…sales service; 
。 availability;
Marketing 95 
。 delivery; 
。 colour/flavour/odour/touch; 
。 payment terms。 
The principal tools that marketing managers use to manage product issues 
are as follows。 
Product/service life cycle 
The idea that business products and services have a life cycle much as any 
being was first seen in management literature as far back as 1922; when 
researchers looking back at the growth of the US automobile industry 
observed a bell…shaped pa。。ern for the sales of individual cars。 Over the 
following four decades various practitioners and researchers; adding; 
substituting and renaming the stages in the life cycle to arrive at the five 
steps in Figure 3。4; carried out further work。 The length of a product’s 
lifetime can be weeks or months in the case of fads such as the hula…hoop 
or the Rubic cube: 
Figure 3。4 The product life cycle 
。 Product development: This stage is typified by cash outlays only; and 
can last from decades in the case of medical products down to a few 
months or even weeks to launch a simple consumer product。 
。 Introduction: Here the product is brought to market; perhaps just to one 
initial segment; and it may prise li。。le more than a test marketing 
activity。 Once again costs are high; advertising and selling costs have to 
be borne up front and sales revenues will be minimal。 
Introduction Decline 
Development Growth Saturation Maturity 
Sales 
Sales 
Time
96 The Thirty…Day MBA 
。 Growth: This stage sees the product sold across the whole range of a 
pany’s market segments; gaining market acceptance and being 
profitable。 
。 Maturity and saturation: Sales peak as the limit of customers’ capacity 
to consume is reached and petitors or substitute products enter the 
market。 Profits start to tail off as prices drop and advertising is stepped 
up to beat off petitors。 
。 Decline: Sales and profits fall away as petition bees heavy and 
be。。er and more petitive or technologically advanced products 
e into the market。 
The usefulness of the product life cycle as a marketing tool is as an aid to 
deciding on the appropriate strategy to adopt。 For example; at the introduction 
stage the goal for advertising and promotion may be to inform and 
educate; during the growth stage differences need to be stressed to keep 
petitors at bay; and during maturity customers need to be reminded 
that you are still around and it’s time to buy again。 During decline it’s 
probable that advertising budgets could be cut and prices lowered。 As all 
major costs associated with the product will have been covered at this stage; 
this should still be a profitable stage。 
These; of course; are only examples of possible strategies rather than rules 
to be followed。 For example; many products are successfully relaunched 
during the decline stage by changing an element of the marketing mix or 
by repositioning into a different marketplace。 Cigare。。e manufacturers are 
responding to declining markets in the developed economies by targeting 
markets such as Africa and China; even se。。ing up production there and 
buying up local brands to extend their range of products。 
Unique positioning proposition 
This used to be known as the unique selling proposition (USP) and still is 
in the sales field。 For marketers the term is synonymous with the idea of a 
slogan or strap line that captures the value of the product in the mind of 
the user。 It should position your product against petitors in a manner 
that is hard to emulate or dislodge。 John Lewis; for example; has ‘never 
knowingly undersold’ as its powerful message to consumers that they can 
safely set price considerations to one side when they e to making their 
choice。 
Another strategy is to set out to own the word and turn it into an adjective。 
Hoover with vacuum cleaners and FedEx with overnight delivery 
are examples of this approach。 
Product range 
Being a single…product business is generally considered too dangerous a 
position except for very small or start…up businesses。 The two options to 
consider are:
Marketing 97 
。 Depth of line: This is the situation when a pany has many products 
within a particular category。 Washing powders and breakfast cereals 
are classic examples of businesses that offer scores of products into the 
same marketplace。 The benefit to the pany is that the same channels 
of distribution and buyers are being used。 The weakness is that all 
these products are subject to similar threats and dangers。 However 
‘deep’ your beers and spirits range; for example; you will always face 
the threat of higher taxes or the opprobrium of those who think you are 
damaging people’s health。 
。 Breadth of line: This is where a pany has a variety of products of 
different types such as Marlboro with cigare。。es and fashion clothing; 
or 3M with its extensive variety of adhesives extending out to the Post… 
It Note。 
Branding 
This is considered the holy grail of the product/service aspect of the marketing 
mix。 A brand enpasses not just what a product is or does but all 
the elements such as logo; symbols; image; reputation and associations。 
McDonald’s arches represent its brand as a weling beacon drawing 
customers in。 Branding is an intangible way of differentiating a product in a 
way that captures and retains markets through loyalty to that brand。 Coca… 
Cola tastes li。。le different from a supermarket brand; but the promotion 
that supports the brand confers on the consumer the chance to share the 
a。。ractive lifestyle of those ‘cool’ people in the adverts。 Apple’s iPod is differentiated 
from just any old MP3 player in much the same way。 Intel and Audi 
are examples of branding designed to reassure consumers in unfamiliar 
territory that a product will deliver。 Body Shop International exudes ethics 
and concern for the environment; where other cosmetics concentrate on 
how they will make the wearer look beautiful。 
Building a brand takes time and a considerable advertising budget to 
build。 But by creating brand value; that is; the price premium manded 
by that product over its unbranded or less appealing petitors; a business 
can end up with a valuable asset。 Superbrands (superbrands) has 
a listing of the top brands by country; o。。en with a case study supporting 
the top brands in any country。 
Price 
Seemingly the simplest of the marketing choices; it is o。。en the most agonizing 
decision that MBAs are faced with。 The subject transcends almost 
every area of a business。 The economists get the ball rolling with ideas 
around the elasticity of demand。 Set too high a price and no one es 
to the dance; too low and your budget for bouncers will go off the Richter 
scale。 The accounts and production teams are concerned that sales will at 
98 The Thirty…Day MBA 
least be sufficient to reach break…even in reasonable time。 The strategists 
are worried about the signals in terms of corporate positioning that prices 
can send。 However profitable a certain price may be for the business; it 
may just be so low that it devalues other products in your range。 Apple; 
for example; has a position fairly and squarely at the innovator end of the 
product adoption cycle。 Their customers expect to pay high prices for the 
privilege of being the first users of a new product。 The iPod was positioned 
above the Walkman in price terms; though as the market for pocket sound 
devices was already mature there was scope to e into the market lower 
down the price spectrum。 
Skim vs penetrate 
You need to decide between two generic pricing strategies before you can 
fine…tune your plans。 Skimming involves se。。ing a price at the high end of 
what you believe the market will bear。 This would be a strategy to pursue 
if you have a very limited amount of product available for sale and would 
rather ‘ration’ than disappoint customers。 It is also a way to target the 
‘innovators’ in your market who are happy to pay a premium to be among 
the first to have a new product。 To be successful with this strategy you 
would need to be sure that petitors can’t just step in and soak up the 
demand that you have created。 
Penetration pricing is the mirror image; prices are set at the low end; 
while being above your costs。 Prices are petitive; with the deliberate 
intention of eliminating your customers’ need to shop around。 Slogans such 
as ‘everyday low prices’ are used to emphasize this policy。 The aim here is 
to grab as much of the market as you can before petitors arrive on the 
scene and hopefully lock them out。 The danger here is that you need a lot 
of volume either of product or hours sold before you can make a decent 
profit。 This in turn means tying up more money for longer before you break 
even。 
Dragon Lock (the executive puzzle makers); who were Cranfield enterprise 
programme participants; adopted a skim strategy when they launched 
their new product。 Their product was easy to copy and impossible to patent; 
so they chose a low price as a strategy to discourage petitors and to 
swallow up the market quickly。 
Danger of low pricing 
Aside from the obvious possible problems of the cash…flow implications 
of stretching out the break…even horizon and quality/image issues; it is an 
immutable law that raising prices is a whole lot more difficult than lowering 
them。 It is less of a problem if the market as a whole is moving up; but 
raising a price because you set it too low in the first place is a challenge to 
say the least。
Marketing 99 
Value pricing 
Another consideration when se。。ing your prices is the value of the product 
or service in the customer’s 

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