Facebook Pixel
🈹 30% OFF - On all our student bundles to help you study better during COVID-19 - Use Our Coupon Code "COVIDAID"
ib business management hl notes

Unit 4.5a - The Four P(s) of Marketing

UPDATED ON - 18 OCT 2019

Learning points:


A product is any good or service that satisfies the needs or wants of consumers.          

  • Functional – Useful
    • Emotional – Appeals to emotion (instills pride, happiness, etc.).
  • Must have value added (either functional value or emotional value).
  • Either tangible (physical products) or intangible (services).

Types of products

Consumer products – products sold directly to consumers.                     

  • Fast-moving consumer goods (FMCG)                                                           
    • Sells by large quantities
    • Soap, shampoo, pencils, etc.
    • Usually cheap                         
  • Consumer perishables
    • Seasonal products.
    • Products with limited shelf-life.
    • Can be sold at a higher price compared to FMCG since they are a premium.
  • Consumer durables
    • Long-lasting and relatively expensive products.
    • Since they are long-lasting, not as many are sold, so they are more expensive.
  • Specialty goods
    • Most expensive.
    • Unique products.
  • Can also be classified by purchase consideration
    • Low Involvement Product (LIP)
      • Opposite of HIP
    • High Involvement Product (HIP)
      • The consumer will take a while to decide when purchasing
  • Producer Products
    •  Goods purchased by businesses for the production process (raw materials & inputs)

Product life cycle

  • Pertains to the different stages of a product’s lifespan.
  • Measured in terms of sales level and growth phases over a period of time.
  • Used to identify necessary changes in marketing strategies
    • Each stage will usually need a different marketing mix.
  • Product life cycle stages
    • Research and development
      • Design, development, and testing.
      • Requires a large investment in resources and time.
      • Creation of prototype with feedback from the target market.
      •  Alpha and Beta releases for testing.
    • Launch/introduction
      • The product will be priced HIGH to cover.
      • Costs of heavy marketing.
      • Cost of research and development.
      • Product is not very profitable at this moment.
    • Growth
      • Rapid volume increase due to better awareness and expansion of distribution channels
      • Starts to be profitable due to economies of scale in production and marketing
      • Competition begins becoming attracted to the market
    • Maturity/saturation
      • Sales may begin to peak/stabilize (no significant changes)
      • Achieve the highest market share, while competition continues to pour into the market
      • Companies will employ price reductions, product differentiation, and extension strategies very aggressively to protect their market share
    • Decline
      • Sales and profits decline due to shifts in demand, new technology, or new models
      • Price levels fall (to get rid of inventory) prior to withdrawal
      • Phasing out the product

    Extension strategies

    • Price reductions
    • Redesigns (e.g. special features, limited edition, etc.)
    • Repacking (e.g. new colours, materials)
    • New markets/market development
    • Promotions (advertising and special tie-ups)
  • Aside from demographics/psychographics, speed of adoption is also affected by
    • Relative advantage
    • Compatibility
    • Testability
    • Observable feature
    • Convenience

    Product life cycle and the marketing mix

  • Launch
    •  Price: may be high or low compared to competitors
    • Promotion: high levels of informative advertising to make the consumers aware of the product’s arrival on the market
    • Place: restricted outlets – possibly high-class outlets if a skimming strategy is adopted
    • Product: basic model
  • Growth
    • Price: if successful, an initial penetration pricing strategy could now lead to rising prices
    • Promotion: consumers need to be convinced to make repeat purchases- brand identification will help to establish consumer loyalty
    • Place: growing numbers of outlets in areas indicated by the strength of consumer demand
    • Product: planning of product improvements and developments to maintain consumer appeal
  • Maturity/saturation
    • Price: competitors likely to be entering the market – there will be a need to keep prices at competitive levels
    • Promotion: brand Imaging continues growing – need to stress the positive differences with competitor’s products
    • Place: The highest geographical range of outlets as possible – developing new types of outlets where possible
    • Product: new models, colors, accessories, etc. as part of extension strategy
  • Decline
    • Price: lower prices to sell off stock-or if the product has a small ‘cult’ following, prices could even rise
    • Promotion: advertising likely to be very limited – may just be used to inform of lower price
    • Place: eliminate unprofitable outlets for the product
    • Product: prepare to replace with other products – slowly withdraw

Boston Consulting Group (BCG) matrix


IB Business Management HL BCG Matrix

Planning tool used to classify a portfolio of products based on market share and market growth.

  • Problem child/question mark
    • High growth market but low market share
    • More resources must be used (cash absorbing) to gain higher market share
    • The alternative is to divest and use resources to help other products
    • To do nothing will make this a dog
    • It can become a star or dog
  • Star
    • High growth market with a high market share
    • Generate a lot of cash and profit but require marketing support
    • If the position is maintained, it may turn into a cash cow
    • If not, may become a problem child 
  • Cash cow
    • Low growth market but high market share
    • Products that command a high share of the market despite maturity
    • Well-established
    • Generate good cash flow and strong profits
    • No further investments required although extension strategies may be used to delay the decline
    • May be used to paying dividends, debts, support problem child products, stars or new product development
  • Dog
    • Low growth market with a low market share
    • Product in a mature market
    • Does not generate much revenue
    • Ties up cash (capital), may be withdrawn or repositioned to the niche market where more premium price can be demanded

Strategic analysis

  • Used to support your products:
    • Building – support problem child
    • Holding – try to maintain the position
    • Milking – using cash cows
    • Divesting – getting rid of dogs
  • It can only be undertaken if the business has a balanced portfolio of products.
  • All 4 quadrants must be filled
  • Dogs or problem children outnumbering stars and cash cows may lead to a cash shortage preventing the firm to take appropriate action


  • Name identifiable to a product or a mixture of tangible and intangible attributes symbolized in a trademark in order to differentiate the product from competitors
    • Role and benefits
    • Legal instrument
    • Differentiation
    • Risk reducer
    • Image enhancer
    • Sales generator
    • Growth platform
    • Timeless

An effective brand name can be a stimulus for a positive association with the product; should be memorable, recognizable, and portray the desired image

Aspects of branding

  • Brand awareness
    • An important aspect of being able to successfully promote a product
    • Essential in markets with products that have very few tangible factors that differentiate products from one another
  • Brand development
    • Long term marketing strategy meant to build and strengthen the image
    • A strong brand can extend the maturity or cash cow position of a product (sustain and increase sales)
  • Brand preference
    • Customers favoring a brand over rivals
    • Quantifies the effect of marketing activities
  • Brand loyalty
    • When customers buy products of the same brand repeatedly
    • Benefits:
      • Higher market share
      • Premium pricing by keeping loyal customers
      • Demand is more price inelastic
        • Customers are not sensitive to price changes
      • Brand extension and growth strategies
    • Raises barriers to entry
      • New players find it hard to gain a market 
  • Brand value
    • The value-added premium that customers are willing to pay for a product of a well-known brand as opposed to a generic equivalent
    • Mass promotion campaigns are essential to help create a brand value
    • Is important if a business would like to expand its product line
      • Can help assure sales if current products within the brand have experienced relatively good success/popularity with customers


  • Serves as protection for the product before reaching the end consumer
  • Makes it easier, more efficient, and safer to transport
  • Attraction, promotion, and differentiation
    • Makes it eye-catching, amongst dozens of other similar products on a shelf
      • Design theme, color scheme
  • Carries information about the product
    • How to use the product
    • Materials/ingredients used
    • Highlights important features
  • It helps to promote the brand and its images.
Supported/Associated with:

Subscribe today to get the latest IBDP news, tips and product updates.

By submitting this form, I agree to the data entered being used by Nail IB NSW for sending newsletters and promotional offers. Your data shall be kept until you unsubscribe. In accordance with current laws and regulations, you can unsubscribe at any time by clicking on the link in the promotional emails that we send to you. Subject to the conditions provided for by applicable legislation, you have rights in relation to your data. To find out more, see our data protection policy . You can exercise your rights at any time by writing to help.nailib@gmail.com.

Follow us:
Payments Secured By:
Payment Companies
© Copyright 2020 Nail IB Inc. All rights reserved.