Product

 4.5 The 4Ps - The importance of product in the marketing mix

Learning outcomes

Why is product vital in the marketing mix?

Some marketers argue that product is the most important of the 4Ps - after all, without a product, there is nothing to promote, distribute (place) or price. Consider these quotes about product (in the marketing mix) before moving on:

“The best advert is a good product” ~ Professor Alan H. Meyer

Ask students to consider whether a good product will sell itself without promotion or whether a good advert will sell a product, no matter how good or bad the product might be...

“Advertising and promotion alone will not sustain a bad product or a product that is not right for the times.” ~ From ‘Made in Japan’ by Akio Morita, (158), co-founder of Sony

This quote might help to answer the previous question, but also highlights the fact that the product (in the marketing mix) is vital - no amount of advertising or promotion can sustain the sales of a bad quality product, or one that is not fitting of the current or future needs of consumers.

“It is not the employer who pays wages - he only handles the money.  It is the product who pays the wages”. ~ Henry Ford (1863-1947), Founder of the Ford Motor Company

Again, Henry Ford's quote highlights the importance of product in the marketing mix - without a decent product to sell to customers (be it a Ford car or any other product sold by a business), there is no source of revenue to pay for the operational costs of the business, including the wages of employees.

“The best marketing strategy and the highest marketing budget in the world cannot win back a disappointed consumer. Long-term success is based on product quality and repurchase rate.” ~ Dietrich Mateschitz, co-founder of Red Bull

Dietrich Mateschitz (born 1944) is a self-made multi-billionaire and is one of the world's richest men. His business model is rather unique in that it is based on literally a single product - Red Bull energy drink (yes, there are variants of the drink, but the company sells a very limited product range based on the original Red Bull energy drink. This quote highlights the fact that getting the product right encourages repurchase (customer loyalty). This is this loyalty that makes his energy drinks the best selling brand in the industry; the marketing budget is secondary to the product itself.

The learning outcomes (or assessment objectives) for this section of the IB Business Management syllabus are:

  • The product life cycle (AO4)
  • The relationship between the product life cycle and the marketing mix (AO2)
  • Extension strategies (AO3)
  • The relationship between the product life cycle, investment, profit and cash flow (AO2)
  • Boston Consulting Group (BCG) matrix on an organization’s products (AO3, AO4)
  • The following aspects of branding (AO2):
    • awareness
    • development
    • loyalty
    • value
  • The importance of branding (AO3)
  • The importance of packaging (AO3)
ATL Activity 1 - The market for bottled fresh air

Read this article from the South China Morning Post about bottled fresh air from New Zealand being sold in China. The article also includes a short YouTube video about this story.

Matt Haig, author of Brand Failures, claims that there is only a 1 in 10 chance of a product becoming a long-term success.

ATL Activity 2 - The market for football boots

Adidas is the world's leading football (soccer) brand. The German sports group has extended its sponsorship of the FIFA World Cup until 2030. With a partner, discuss the main factors that affect the high demand for Adidas football boots (soccer boots) - try to come up with at least five factors.

Possible interrelated factors could include:

  • Higher real disposable incomes in Germany and other economies
  • A high degree of customer / brand loyalty for Adidas products
  • Improved and more effective advertising campaigns used by Adidas to attract more consumers, including its sponsorship agreement with the FIFA World Cup until (at least) 2030
  • A fall in the price of related products, such as football socks, shin pads, football jerseys (shirts), football shorts, etc.
  • An increase in the price of substitutes products / brands, such as football shoes made by Nike, Puma and Mizuno
  • An increase in the size of the population / size of the market for football boots, including the expansion of Adidas in overseas markets
  • More schools and local social (community) clubs offering football as a sporting activity, including the organization of local sports competitions
  • Expectations from consumers about prices in the future, perhaps due to a major upcoming sports event, such as the FIFA World Cup or the Olympic Games.

Read more about the (sponsorship) partnership between Adidas and the FIFA World Cup here.

InThinking Business Management resources

Click the hyperlinks below to access the InThinking resources for this particular section of the IB Business Management syllabus.

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