MARKETING MIX : MARKETING MIX The marketing mix principles (also known as the 4 p’s.) are used by business as tools to assist them in pursuing their objectives Slide 2: The marketing mix principles are controllable variables, which have to be carefully managed and must meet the needs of the defined target group.
marketing mix is apart of the organizations planning process and consists of analyzing the following-
How will you design, package and add value to the product. Product strategies.
What pricing strategy is appropriate to use Price strategies.
Where will the firm locate? Place strategies.
How will the firm promote its product Promotion strategies. PRODUCT STRATEGIES : PRODUCT STRATEGIES When an organization introduces a product into a market they must ask themselves a number of questions.
Who is the product aimed at?
What benefit will they expect?
How do they plan to position the product within the market?
What differential advantage will the product offer over their competitors? Slide 4: Kotler suggested that a product should be viewed in three levels.
Level 1: Core Product. What is the core benefit your product offers?. Customers who purchase a camera are buying more then just a camera they are purchasing memories.
Level 2 Actual Product: All cameras capture memories. The aim is to ensure that your potential customers purchase your one. The strategy at this level involves organizations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors.
Level 3: Augmented product: What additional non-tangible benefits can you offer? Competition at this level is based around after sales service, warranties, delivery and so on. Product Decisions : Product Decisions Product design – Will the design be the selling point for the organisation as we have seen with the iMAC, the new VW Beetle or the Dyson vacuum cleaner.
Product quality: Quality has to consistent with other elements of the marketing mix. A premium based pricing strategy has to reflect the quality a product offers.
Product features: What features will you add that may increase the benefit offered to your target market? Will the organisation use a discriminatory pricing policy for offering these additional benefits?
Branding: One of the most important decisions a marketing manager can make is about branding. The value of brands in today’s environment is phenomenal. Brands have the power of instant sales, they convey a message of confidence, quality and reliability to their target market. Pricing Strategies : Pricing Strategies Pricing should take into account the following factors:
Fixed and variable costs.
Proposed positioning strategies.
Target group and willingness to pay. Pricing Strategies : Pricing Strategies Penetration pricing: Where the organisation sets a low price to increase sales and market share.
Skimming pricing: The organisation sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.
Competition pricing: Setting a price in comparison with competitors. Slide 9: Product Line Pricing: Pricing different products within the same product range at different price points. An example would be a video manufacturer offering different video recorders with different features at different prices.
Bundle Pricing: The organisation bundles a group of products at a reduced price.
Psychological pricing: The seller here will consider the psychology of price and the positioning of price within the market place. The seller will therefore charge 99p instead £1 or $199 instead of $200 Slide 10: Premium pricing: The price set is high to reflect the exclusiveness of the product. An example of products using this strategy would be Harrods, first class airline services,
Optional pricing: The organisation sells optional extras along with the product to maximise its turnover. This strategy is used commonly within the car industry. PlacePlace strategies : PlacePlace strategies Refers to how an organisation will distribute the product or service they are offering to the end user.
What channel of distribution will they use?
Two types of channel of distribution methods are available.
Indirect distribution involves distributing your product by the use of an intermediary.
Direct distribution involves distributing direct from a manufacturer to the consumer e.g. For example Dell Computers Slide 12: INDIRECT
DISTRIBUTION Distribution Strategies : Distribution Strategies Depending on the type of product being distributed there are three common distribution strategies available:
1. Intensive distribution: Used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks.
2. Exclusive distribution: Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers.
3. Selective Distribution: A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.
If a manufacturer decides to adopt an exclusive or selective strategy they should select a intermediary which has experience of handling similar products, credible and is known by the target audience. Promotion Strategies : Promotion Strategies A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organisations promotional strategy can consist of:
Advertising: Is any non personal paid form of communication using any form of mass media.
Public relations: Involves developing positive relationships with the organisation media public. The art of good public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention.
Sales promotion: Commonly used to obtain an increase in sales short term. Could involve using money off coupons or special offers.
Personal selling: Selling a product service one to one.
Direct Mail: Is the sending of publicity material to a named person within an organisation. There has been a massive growth in direct mail campaigns over the last 5 years. Message Strategy : Message Strategy What message are you trying to put accross to your target audience?.
How will you deliver that message? Will it be through the appropiate use of branding?
logos or slogan design?.
The message should reinforce the benefit of the product and should also help the company in developing the positioning strategy of the product. Media Strategy : Media Strategy Media strategy refers to how the organisation is going to deliver their message.
What aspects of the promotional mix will the company use to deliver their message strategy.
Where will they promote?
Clearly the company must take into account the readership and general behaviour of their target audience before they select their media strategy.
What newspapers do their target market read?
What TV programmes do they watch? Push & Pull Strategies : Push & Pull Strategies push strategy : push strategy A push strategy is where the manufacturer concentrates some of their marketing effort on promoting their product to retailers to convince them to stock the product.
A combination of promotional mix strategies are used at this stage aimed at the retailer including personal selling, and direct mail.
The product is pushed onto the retailer, hence the name. pull strategy : pull strategy A pull strategy is based around the manufacturer promoting their product amongst the target market to create demand.
Consumers pull the product through the distribution channel forcing the wholesaler and retailer to stock it, hence the name pull strategy.
Organizations tend to use both push and pull strategies to create demand from retailers and consumers.