Download The influences on the marketing mix and the importance of having

The influences on the marketing mix and the importance of having an integrated marketing mix
INFLUENCES ON THE MARKETING MIX
Finance - as marketing involves significant expenditure before any results are achieved, and will always include an
element of risk, the finances of a firm are critical
A business suffering from cash-flow problems should avoid spending so much on things
like promotion, as they can be very large expenditure areas before any revenue is
Cash flow
generated from the promotion (cash-flow problems will also encourage firms to drop
prices dramatically in order to bring in much needed cash in the short term)
Larger organisations are able to obtain raw materials and products at much lower prices
Discounts
than smaller organisations, due to economies of scale
Businesses base all of their marketing decisions on cost effectiveness, and therefore have
to take into account the marketing budget and weigh that against the cost of promotion
Marketing budget
(cost effectiveness is often measured in cost per thousand – e.g. a promotional
campaign costing £60,000 reaching 600,000 people would have a CPT of 10p/customer)
Technology – technology can have a big impact on business costs and unit selling prices
Technologically
advanced products
Business database
Cost-cutting
E-commerce
Generally speaking, the more technologically-advanced a product is, the better it appears
in the eyes of a consumer, and therefore it will be more popular, and there is an obvious
connection between advanced technology and selling price. Technologically-advanced
products also require less promotion as the products sell themselves and word-of-mouth
advertising helps to sell them
If a business has a particularly sophisticated database where it stores information about
its customers (based on their history of purchases with the store, for example, a Tesco
Clubcard), it can gain a detailed understanding of the customer’s tastes and wants, and
can target them a lot better with direct mail, etc
Advances in technology have allowed many businesses to produce the same products
faster and cheaper, and a lower production cost most often means a lower selling price
which will encourage more customers to buy the product
Internet selling and buying has had a massive impact on the placement of some
businesses, such as Amazon, who have not needed a traditional retail store. The internet
is also beneficial for advertising and promotions via advertising on popular websites
Market Research – the data obtained from carrying out market research offers businesses a lot of helpful
information which enables them to adapt their marketing mix to gain an advantage
If market research indicates that there is a high level of competition in the market, a
Competition
business can differentiate its product – this is achieved via branding, patenting original
ideas and by constantly developing new products to replace those in decline
In order to be successful, a business’ products must satisfy the needs of the consumer,
and market research is constantly done to find out what these are – and nowadays a
Consumer opinion
business tends to aim different products from its product mix at different individual
market segments so as to have more variety in their target market
Depending on where the target market lies, whether it be in a niche or a mass market, a
Niche/mass marketing
business will have to choose where it places its advertising: it can be above-the-line
(undifferentiated) marketing or below-the-line (differentiated) marketing
Some market segments can be easier to reach through certain media, for example, some
businesses use specialist magazines to advertise their products in because the
Market segment
magazine’s readership matches the market segment which the business is trying to
attract. Market segments can also affect price – obviously if the business is aiming its
products at a wealthier market, a higher price will be charged, and vice versa
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Other Factors affecting the marketing mix
Relative power of the
buyers and suppliers
Promotion quality
Elasticity of demand
Reputation
When a business is in a strong position to dictate terms to its suppliers, it is more likely to
be able to negotiate a lower price to acquire cheaper supplies (this happens more often
to the larger businesses)
Some promotional campaigns have had to be stopped mid-run because they were not
cost-effective (for example, Hoover once offered expensive flights free to its customers
when they purchased one of their products); whereas other campaigns have been highly
successful in captivating consumers (such as Cadbury’s gorilla advert)
Sometimes a high price will not stop customers purchasing a product, which means that
in some cases an even higher price can be charged; however, other products have to
charge a relatively low price to avoid significantly low demand
For some businesses, image and reputation is everything. A business selling upmarket
goods will avoid price cuts in order to keep its upmarket image; whereas a business who
strives for value for money will flaunt its low prices
THE IMPORTANCE OF AN INTEGRATED MARKETING MIX
An effective marketing mix is designed so that each element is supported by and works with each of the other part of
the mix. The examples below show how elements of the mix can be integrated:
If the main selling point of a product is excellence
then the quality and design of that product must
match consumers’ expectations. Wealthy consumers
would expect to see a high price and an upmarket
place where they are likely to buy the product
A supermarket will want its low-price, economy
range of products to be packaged simply so that
consumers can see money is not wasted on
packaging. Consumers will also not expect expensive
promotional campaigns
All elements of the marketing mix are important, but it is generally believed that the product itself is the key to a
successful marketing mix. Whilst promotions may encourage consumers to buy a product, prices may attract consumers
to it, and they will only purchase the product if it is available in a convenient place, if the product fails to satisfy the
consumers’ needs, the entire mix will be unsuccessful.
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