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Marketing Mix
Marketing Mix - Definition
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Marketing mix is the combination of elements
that go to make the marketing strategy for a
company.
This helps achieve the marketing objectives
of the company/brand
The mix needs to clearly differentiate your
products from those of your competitors
Marketing Mix - Variables
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The marketing mix focuses on 4 elements:
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Price
Product
Place (Distribution)
Promotion
These variables are all interdependent
“Controllable variables” as one can choose,
alter & control these
Product Mix
Product Mix - Definition
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The physical features of the product, or the
intangible aspects of the service
This covers things that make the product
more attractive to buy
Product Mix
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Product line/range
Design, quality, feature, models, style,
appearance, size & warranty
Packaging type, materials, size, appearance
& label
Merchandising
Service, pre-sale & after sales
New products launches
Product Mix – Under A Microscope
Product mix & line : Launch Phase
Blended Spices a mature market
 What variants to launch, which to push, how to
differentiate from competition ??
 Brand the variants to be offered eg. Pindi Chhole
Masala, Dakshin Sambhar Masala, Khyber Tandoor
Masala
Packaging :
 Introduced in standi poly pouches
 Resealable pouches
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Product Variables – Under A
Microscope
Later Stage :
 More to create excitement around the brand
 Relevant for high impulse buying category
 eg. Shampoos – Pantene’s oil fortified
shampoo
 Better the product - Maggi Wheat Atta
Reaction to competitors  Iodex launching white iodex
Product Variables – Under A
Microscope
Reactions to market scenario :
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McDonalds has recognized the preference for
vegetarian foods among Indians thus they
have included vegetarian food in its menu.
Pizza Hut outlets being purely vegetarian in
places like Ahmedabad, Mumbai
Product Variables – Under A
Microscope
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Merchandising done to create a buzz & remain top
of mind
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Eg.McDonald’s merchandising Nemo’s to coincide with the
release of Finding Nemo
McDonalds agrees to distribute millions of Roger Rabbit
cups to its customers
Luxor Writing Instruments Ltd. a JV of Gillette and Luxor
launched 500 "Gajgamini" range of Parker Sonnet Hussain
special edition fountain pens, priced at Rs. 5000.
These pens were signed by M.F.Hussain
Price
Price
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The exchange value of a product is “Price”
Going to sell at a high price and make a lot
of profit in the short term
Going to sell at a low price to beat the
competition and stay in the long term
Price
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1.
2.
3.
A well chosen price strategy should do 3
things:
Achieve the financial goals of the firm (eg.:
profitability)
Fit the realities of the marketplace (will
customers buy at that price?)
Support a product positioning
Price Variables
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Pricing policies, levels of prices, levels of
margins, discounts & rebates
Terms of delivery, payment terms, credit
terms & instalment facilities
Resale price maintenance
EG. Xerox's decision to "loan" customers the
Xerox 914 (the first commercial push-button
office copier) and to charge them only $.05
per copy.
Types of Pricing
Competitive/Penetration pricing:
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3 policies – Premium, Discount & Parity pricing
Eg. Akai Colour TV Discount Pricing
Baron International the Indian JV of Akai sold colour
TVs that were priced below Rs 10,000/- alongwith
exciting exchange offers & freebies
This changed the rules of the game in entertainment
electronics.
His strategy was to make people buy rather than sell
his product.
The strategy was built keeping in mind the pricesensitive and value-conscious Indian consumers
Types of Pricing
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From 2,500 in 1994, Akai sold an amazing 4,50,000 TVs in
1998.
Akai sold at wafer-thin margins of 2%.
Money was made because of high volumes but was not enough
for the manufacturer to take back some home
Thanks to this even other manufacturers had to cut back the
price of their products forcing Baron to virtually work without
profit, even at a loss at times.
Baron didn’t build any back-up strength in terms of after sales
service or any credible infrastructure to maintain consumer
confidence
If in 1996-97 Baron had clocked a net profit of Rs 28 crore,
June 2001 saw it dip into the red with a net loss of Rs 74.51
crore
Types of Pricing
Competitive/Penetration pricing:
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The success of competitive pricing strategy
depends on achieving high volume and
maintaining low costs.
Discount pricing that worked - Cavinkare’s
Chik shampoo has a 20% market share as
against HLL’s Clinic Plus – 28%
Types of Pricing
Cost-plus-profit:
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Add the profit you need to your cost.
It is also called cost-orientated strategy and
is mainly used by the big contractor of public
works.
This strategy is only good for a businesses
where the customers are public collectivities
or government agencies.
Types of Pricing
Value pricing:
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Base prices on the value you deliver to customers.
For example, when a new technology has a very large
success, you can charge high prices to the customer.
This practice is also called “skimming”.
It is easy when you are in the introductory phase of
the product life cycle.
Value pricing is common in luxury items.
Sometimes the higher the price, the more you sell
Eg. Designer clothes
Types of Pricing
Proactive Pricing :
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Times of India offering the paper at Rs 2/- on
certain days of the week
Eventually it extended the pricing through
weekdays
Circulation grew in leaps & bounds
Place
Place - Definition
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Decisions about where to sell the product &
how to get it there
Depends about where the customers are
Includes the "channel of distribution" - all the
different middlemen
Place Variables
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Channels of distribution
Types of intermediaries
Channel design
Location of outlets
Channel remuneration & dealer-principal
relations
Physical distribution, transportation,
warehousing, inventory levels, order
processing
Place Variables
Physical Distribution :
 Transportation Costs – Freight, rail, road cost on the
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rise
Need only the best solution as time and reliability
are key importance
Warehousing & Inventory Cost- Warehousing rent
along with cost of labour have been going up
Inventory levels have been increasing due to
competition & hoping to provide a better product
delivery to the channel customers
Place Variables
Channels of Distribution :
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Manufacturer
Manufacturer
Manufacturer
User
Manufacturer
User
Manufacturer
Manufacturer
Retailer
User
User
Mail order
User
Door to Door Salesman
Manufacturer’s Showroom
Retailer
User
Stockist/Distributor
Place Variables
Proliferation of showrooms/ exclusive outlets
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Maintain a synergy in ambience, experience, service
Sony World
Titan
Franchising :
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Manufacturer dos not need to make large
investments but a still have a strong network
NIIT
Oyzterbay
Place Variables
Modern Format Shops :
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Supermarkets, department stores & chain stores
are the new genre
Wide variety at a touch and feel level
The Co-operative Network :
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3 distribution channels – Consumer co-operative,
Supermarkets & Agricultural credit societies
The Public Distribution System :
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Came into existence out of the need to be fair
It seek to stabilize prices of essential goods
Place Variables
Non Store Marketing / Marketing without
Distribution Channels:
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Mail Order Marketing / Mail Order Business
Vending Machines
Home selling
Home Shopping
Place - Cases
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Kitchens Of India available only at
supermarkets
Ghadi detergent’s success only because it is
easily available at all outlets
Platini bombed because of non availability of
product at all outlets
Promotion Variable
Promotion -Definition
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The function of promotion is to affect
the customer behavior in order to close
a sale.
Promotion includes mainly three topics:
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Advertisement
Public Relations
Sales Promotions.
Promotion Variable
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Personal selling : Objectives, level of effort,
quality of sales force, cost level, level of
motivation
Advertising : media mix, budgets, allocations
& programs
Sales promotional efforts, display, contests,
trade promotions
Publicity & public relations
Promotions
Mix Elements
Advantages
Disadvantages
Advertising
Good
Impersonal
for building
awareness
Effective at reaching
wide audience
Repetition of brand
positioning helps
build trust in the
consumer
does not
answer all queries of
TG
Does
not get the TG
to make the final
decision
Promotions
Mix Elements
Advantages
Disadvantages
Personal Selling
Highly
Costly
interactive
– lots of
communication
between buyer &
seller
Excellent at
communicating
complex/detailed
product info
Relationships can
be built especially
when sales closing
take a long time
keeping a
sales force that
has many hidden
costs apart from
salary
Not
suitable
when there are
thousands of
buyers
Promotions
Mix Elements
Advantages
Disadvantages
Sales Promotion
Can
If
stimulate
quick increase in
sales by
targeting
promotional
incentives on
certain products
Good short
term tactical
approach
used long
term customers
may get used to
the effect
Too
much
promotion may
damage brand
image
Promotions
Mix Elements
Advantages
Public Relations
Often
Disadvantages
seems to Risk of losing
be credible as
control as no
its coming from control on what
a 3rd party
people write
(newspaper/TV)
Cheap way of
reaching many
customers
Case Study –
Marketing Mix for Haldiram’s
Case Study –
Marketing Mix for Haldiram’s
PRODUCTS :
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Haldiram's product range included namkeens, sweets,
sharbats, bakery items, dairy products, papad and icecreams .
Namkeens remain the main focus area for the group
contributing close to 60% of its total revenues.
Have a Nagpur unit manufactured 51 different
varieties of namkeens, the Kolkata unit manufactured
37 and the Delhi unit 25
The raw materials used to prepare namkeens are of
best quality and are sourced from all over India.
Case Study –
Marketing Mix for Haldiram’s
PRODUCTS :
 Customize its products to suit the tastes and preferences of
customers from different parts of India.
 For example, it launched 'Murukkus,' a South Indian snack, and
'Chennai Mixture' for South Indian customers. 'Bhelpuri,' was
made for customers residing in western India.
 The company offered certain products such as 'Nazarana,'
'Panchratan,' and 'Premium' gift packs only during the festival
season.
 This helped Haldiram's compete effectively in a market that was
flooded with a variety of snack items in different shapes, sizes
and flavors
Pricing :
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The company's pricing strategy took into
consideration the price conscious nature of
consumers & the large unorganized market it
was battling
Introduced small packets of 30 grams, priced
as low as Rs.5.
The company also launched namkeens in five
different packs with prices varying according
to their weights
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Pricing :
PACK WEIGHT
PRICE (in Rs)
30 gms
5
85 gms
10
180 gms - 250 gms
Source: ICMR
18-35
400 gms - 500 gms
40-70
1kg
95-200
PLACE :
Manufacturing Unit
Carrying & Forwarding Agent (C&F)
Distributors
Retail Outlets
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C&F agents received a commission of around
5%, while distributors earned margins
ranging from 8% to 10%.
The retail outlets earned margins ranging
from 14% to 30%.
Apart from the exclusive showrooms owned
by Haldiram's, the products were available at
supermarkets, sweet shops, provision stores,
bakeries and ice cream parlors.
The products were also available in public
places such as railway stations and bus
stations that accounted for a sizeable amount
of its sales.
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Haldiram's also offered its products through
the Internet.
The company tied up with indiatimes.com ,
Giftstoindia.com, giftssmashhits.com,
tohfatoindia.com and channelindia.com
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This was to enable NRI’s residing abroad to
send Haldiram's gift packs to specified
locations in India.
Promotion :
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Magazines & print were used
Point of sales (Posters, Danglers, Buntings,
Shelf Talkers)
Mailers to corporates during Diwali for bulk
orders
Promotion :
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Since namkeens were impulse purchase items,
attractive packaging in different colors
influenced purchases.
Haldiram's used the latest technology (food
items were packed in nitrogen filled pouches) to
increase the shelf life of its products.
While the normal shelf life of similar products
was under a week, the shelf life of Haldiram's
products was about six months.
The company projected the shelf life of its
products as its unique selling proposition.
Posters highlighting the shelf life of its products
carried the caption 'six months on the shelf and
six seconds in your mouth.'
Promotion :
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The company established restaurants in Nagpur and
Delhi.
In Nagpur an innovative strategy was undertaken to
increase its business
It facilitated people who were traveling by train
through Nagpur station to order food from places
where stockists of Haldiram's Nagpur unit were
located.
The customers could order for lunch/dinner by
sending a demand draft (DD) or cheque to the Nagpur
unit or giving the same to specified local distributors
belonging to the Nagpur unit.
Along with the DD/cheque, customers had to provide
information such as the name of the train, its likely
time of arrival at Nagpur, their names and coach and
seat numbers.
Godrej Noble House
&
Chai Time
Marketing Mix Case Study
Godrej Tea
Product :
 Launched 2 new tea products :
 Godrej Noble House & Godrej Chai House
 Godrej Chai House is targeted at the popular and midpremium segment while Godrej Noble House is being
positioned in the premium category.
 A phased launch beginning with Andhra Pradesh,
Tamil Nadu, Uttar Pradesh, New Delhi and Mumbai.
 Tea being offered in different parts of the country is
different.eg. In South it will be Dust, whereas the
north would have Leaf tea.
 These product variations reflect the fact that
consumers in different parts of the country have
heterogeneous taste.
 Dust tea is very popular in the south, Gujarat prefers
loose tea….
Godrej Tea
Price, positioning and packaging :
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Nobel House is priced at Rs 55 for a 250 gm pack for its
leaf varient and Rs 48 for the dust.
Chai House is priced at Rs 40 for a 250 gm pack of leaf
and Rs 37 for dust.
Tea available in in 2kg, 1kg, 500gm, 250gm, 100gm,
50gm and 25gm packaging at prices as low as Rs 3.
Plans to introduce Re 1 packs.
The pricing on both products represents a 13% discount
to the Tata Tea and Hindustan Lever Ltd. counterparts.
Godrej Tea
Place :
Godrej Tea is utilizing 50% to 60% the
existing Godrej Group distributors, while it
has appointed an additional 500 distributors
on its own.
Promotion :
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Introductory offer of giving away Fair Glow
soaps and Cinthol Original for
approximately 1-1.5 months.