Marketing Mix: Product and Pricing Strategies

Product: Definition and Market Influence

A product is the object through which a company can influence the market. It is designed to satisfy a consumer's needs and desires. A differentiated product range is the result of one or more attributes of the product that lead the consumer to perceive it as something new; companies create monopolies by differentiating their products. A good product presentation is important.

The Importance of Branding

To differentiate their products, companies use a brand, which is a combination of a name, symbol, or design. The brand is composed of the name (a description of the product) and the logo (the image that identifies the product). The brand should be registered in the corresponding formal registry so that products are not copied. The brand name must be short and easy to remember.

Branding Strategies

• Single or Umbrella Brand: The company uses the same brand for all its products. Promotional costs are saved, but if one product fails, it affects the entire image (e.g., Sony).
• Multiple Brands: This includes individual brand strategies, brand strategies by product line, and second-brand strategies.
• Label Brands: These are brands manufactured by an industrial producer that are offered under the name of the distributor.

The Product Life Cycle

• Introductory Stage: The stage when a product is brought to market. Sales are low and growth is slow. Advertising is primarily informative.
• Growth Stage: The product starts to become known and sales grow. Advertising becomes persuasive.
• Maturity Stage: Sales growth stabilizes. Advertising efforts focus on trying to find new consumers.
• Decline Stage: Sales drop. The importance of the transition is that the company must decide between relaunching the product with an innovation or stopping its marketing.

Price: Strategies and Market Factors

Price is the money that is given in exchange for a good or service. It is one of the most influential variables in the purchase of a product. It depends not only on the willingness of the company but also on the cost of the product, market demand, and competition.

Price Setting Models

According to Predictive Models: The company sets the product price to maximize the objective of total income. While vendors want to sell at the highest price, consumers want to buy at the lowest price.

Price Setting Based on Competition

• Setting a price similar to competition: This occurs when products have very similar characteristics.
• Setting a price below the competition: This occurs when the company intends to compensate for lower quality with a lower price.