Download The Marketing Mix - PowerPoint Presentation

Marketing – What do People Want

“Give People What They
Want”
Sellers steps to place
product or service in hands
of potential customers
Marketing
Marketing is...
‘The management process responsible for
identifying,
anticipating and satisfying customer requirements
profitably’
Chartered Institute of Marketing
Market segmentation

Splitting up the market into groups of people
with similar needs and characteristics

Products and marketing activities can be
tailored to the needs the segments

Markets can be segmented by age, gender,
lifestyle, income and geography
Market research
Market research is the process of collecting data about
customers and competitors.
There are two types of market research:
 Primary research – gathering first hand data e.g.
through questionnaires and focus groups
 Secondary research – gathering existing data e.g.
through trade journals and government statistics

Market Types

Market Types



Mass Market – paper towels, cell phones
Niche Market – cosmetics for sensitive skin, dog-walking
service
Market Research

Qualitative


Focus groups, 1 on 1 interviews, behavioral observation
Quantitative –


Large samples
Use statistics to draw conclusions
The Marketing Mix
The Marketing Mix

Strategies &
Activities

Used by companies to
sell goods, services
The Marketing Mix



The tools available to a business to gain the
reaction it is seeking from its target market in
relation to its marketing objectives
7Ps – Price, Product, Promotion, Place,
People, Process, Physical Environment
Traditional 4Ps extended to encompass
growth of service industry
Price
Price


Pricing Strategy
Importance of:



knowing the market
elasticity
keeping an eye
on rivals
Price
The price of a product will depend on:
 The cost to make it
 The amount of profit desired
 The price competitors charge
 The objectives of the business
 The price customers are willing to pay


Is there a high demand?
Is demand sensitive to changes in price?
Pricing strategies and tactics
Skimming
Launching with a high price when there is little
competition, then reducing the price later. Often used
with technology.
Penetration
A low price is charged initially to penetrate the market
and build brand loyalty. The price is then increased
e.g. introductory offers on magazines.
Competitive
A similar price is charged to that of competitors’
products.
Loss leader
Products may be sold at a price lower than the cost to
produce it. Often used by supermarkets to encourage
people into the store where it is hoped they will buy
other products.
Pricing strategies and tactics
Psychological
A price is set which customers perceive as lower
than it is e.g. $39.99 instead of $40.
Differential
Different prices are charged for the same product
e.g. bus fares for children are cheaper than adult
prices.
Cost plus pricing
An additional ‘mark-up’ is added to the cost of
producing a good or service.
Strategic pricing
Price is set to position an exclusive product or brand
to make it more desirable for consumers, generate
demand or demonstrate value
Product
Product





‘Product’ refers to the functions and features of a good or
service
Should satisfy the needs of the customer
May have a Unique Selling Proposition (USP)
‘Product’ also includes a range of factors such as packaging,
quality, warranties, after-sales service and branding
Products and brands may suggest certain images e.g. sporty,
sophisticated, value
Product

Methods used to
improve/differentiate
the product and increase sales or
target sales more effectively to
gain
a competitive advantage e.g.

Extension strategies

Specialized versions

New editions

Improvements – real or
otherwise!

Changed packaging

Technology, etc.
The Product Life Cycle
Sales Curve
Dollars
Profit Curve
Time
Growth
Product
Maturity
Decline
Introduction
Development
12-8
Product lifecycle
The product lifecycle looks at the sales of a product
over time
Stages of the product lifecycle
Development – high costs but no sales
Launch – high expenditure on promotion and
product development, low sales
Growth – sales increase and product should break
even
Maturity – sales stabilize, less expenditure on
promotion needed, revenue & profit should be high
Decline – sales decline, extension strategies can be
adopted or the product withdrawn
Extension strategies
Extension strategies should maintain or increase
sales.
They include:




Modifying the product
Reducing the price
Adding a feature
Promoting to a
different market
sector
Extension
strategies
Promotion
Promotion


Strategies
to make the consumer
aware of the
existence of a product
or service
NOT just advertising
Promotion
The aims of promotion are to:
 Raise awareness
 Encourage sales
 Create or change a brand image
 Maintain or increase market share
Types of promotion
Above-the-line promotion
This uses mass media advertising over which a firm
has no direct control e.g. television, radio and
newspapers
Below-the-line promotion
This uses promotional media which the firm can
control e.g. direct mail, sales promotions, sponsorship
and social media
Promotional activities





Advertising e.g. TV, billboards and internet.
Sales promotions e.g. loyalty cards, BOGOF,
discounts & free gifts
Sponsorship – a business pays to be associated with
another firm, event or cause
Direct mailing – promotional material is sent to
potential customers by post/email
Public relations – building the relationship between
the firm and the public by enhancing its reputation
Promotional mix
Most businesses use a combination of different
promotional activities.
The chosen promotional mix will depend on:
 Cost
 Target market
 Product
 Competitors
AIDA
Promotional campaigns often take into account the
AIDA model:




Awareness - raising awareness of a product
Interest – exciting interest in the product
Desire – creating desire for the product
Action – encouraging a purchase
Place
Place

The means by which products and services
get from producer
to consumer and where they can be accessed
by the consumer

The more places to buy the product and the easier
it is made to buy it, the better for the business
(and the consumer?)
Place


Products should be conveniently available for
customers to buy
‘Places’ include:
The use of




Stores
Mail order
Telesales
Internet
e-commerce (promoting and
selling on the internet) has
grown massively over the last
few years
Channels of distribution
Manufacturer
Wholesaler
Retailer
Consumer
People
People

People represent the business





The image they present can be important
First contact often human – what is the lasting image they
provide to the customer?
Extent of training and knowledge
of the product/service concerned
Mission statement – how relevant?
Do staff represent the desired culture
of the business?
Process
Process



How do people consume services?
What processes do they have to go through to
acquire the services?
Where do they find the availability
of the service?






Contact
Reminders
Registration
Subscription
Form filling
Degree of technology
Physical Environment
Physical Environment

The ambience, mood or physical presentation of the
environment







Smart/shabby?
Trendy/retro/modern/old fashioned?
Light/dark/bright/subdued?
Romantic/chic/loud?
Clean/dirty/unkempt/neat?
Music?
Smell?
The Marketing Mix









Blend of the mix depends upon:
Marketing objectives
Type of product
Target market
Market structure
Rivals’ behaviour
Global issues – culture/religion, etc.
Marketing position
Product portfolio


Product lifecycle
Boston Matrix