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terms of performance； delivery and any other important parameters。
Their ‘customer’ is both the end user and the budget holder of the cost
centre concerned。 There may even be conflict between the two （or more）
‘customer’ groups。 For example； in the case of； say； hotel toiletries； those
responsible for marketing the rooms will want high…quality products to
enhance their offer； while the hotel manager will have cost concerns
close to the top of their concerns and the people responsible for actually
pu。。ing the product in place will be interested only in any handling and
packaging issues。
。 The non…consuming buyer； who places the order； also has individual
needs。 Some of their needs are similar to those of a specifier； except
that they will have price at or near the top of their needs。 A particular
category here is those buying gi。。s。 Once again their needs and those
of the recipient may be dissimilar。 For example； those buying gi。。s are
as concerned with packaging as with content。 Watches； pens； perfumes
and fine wines are all gi。。s whose packaging is paramount at the point
of purchase。 Yet for the user they are o。。en things to be immediately
discarded。
In just 18 years； Dawn Gibbons MBE； co…founder of Flowcrete （
flowcrete）； took the pany from a 400…square…foot unit （the
size of a double garage） with ￡2；000 capital to a plc with a turnover of
�52 million in the field of floor…screeding technology and clients including
household names such as Cadbury； Sainsbury’s； Unilever； Marks &
Spencer； Barclays and Ford。 Part of Flowcrete’s success was down to a
continuing focus on technical superiority。 This attribute was engendered
by Dawn’s father； a well…respected industrial chemist with an interest in
resin technology。
But arguably Dawn’s skills contributed as much if not more to the
firm’s success。 ‘We want to be champions of change；’ Gibbons claims。
‘We have restructured a dozen times； focusing on new trends。’ Markets
and market segmentation are a vital part of any restructuring process
– indeed； the best panies restructure around their customers’
changing needs。
The first reappraisal came after seven years in business when Flowcrete
realized that its market was no longer those firms that laid floors；
it now had to bee an installer itself。 Changes in the market meant
that to maintain growth Flowcrete had to appoint proven specialist
contractors； train their staff； write specifications and carry out audits to
ensure quality。
94 The Thirty…Day MBA
THE MARKETING MIX
The term ‘marketing mix’ has a pedigree going back to the late 1940s when
marketing managers referred to mixing ingredients to create strategies。
The concept was formalized by E Jerome McCarthy； a marketing professor
at Michigan State University； in 1960。 The mix of ingredients with which
marketing strategy can be developed and implemented is price； product
（or/and service）； promotion and place。 A fi。。h ‘P’； people； is o。。en added。
Just as with cooking； taking the same or similar ingredients in different
proportions can result in very different ‘products’。 A change in the way
these elements are put together can produce an offering tailored to meet
the needs of a specific market segment。
The ingredients in the marketing mix represent only the elements that
are largely； though not entirely； within a firm’s control。 Uncontrollable
ingredients include the state of the economy； changes in legislation； new
and powerful market entrants and rapid changes in technology。 The effects
of these external elements are covered in the chapter on strategy； though
many of the concepts discussed there apply to marketing as well as to
wider aspects of a firm’s operations。
Product/service
When the term ‘marketing mix’ was first coined； the bulk of valuable trade
was concerned with physical goods。 Certainly services existed； but these
were mostly supplied by professions such as law； accountancy； insurance
and finance where the concept of marketing was in any event taboo； today；
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 exam
