Transcript The Marketing Mix - Deans Community High School

The Marketing Mix
Unit 1.3 Business Management
Definition
• The marketing mix is a marketing tool.
It is a checklist. It focuses attention on
the various elements of marketing
needed to carry out the marketing
strategy.
• It consists of four factors (product,
price, promotion and place) cemented
together by effective market research.
How is the marketing mix
used?
• Marketing managers look at each of the ingredients
and decide what actions need to be taken under each
of the headings.
• The ingredients need to work with each other eg a
good product poorly priced may fail. If the product is
not available following an advertising campaign the
expenditure is wasted.
• A successful mix will produce customer satisfaction.
It will achieve the marketing objectives.
• For each marketing situation there will be a different
mix.
• The mix will ensure that the marketing effort is
correctly targeted. There are different markets.
Industrial markets are different from consumer
markets.
Industrial markets
• One business is supplying another
• Businesses purchase raw materials,
parts, part-finished goods, machinery,
vehicles, office equipment, insurance
etc in order to produce their own
products for the market
• In industrial markets the products may
have exact specifications agreed with
the customer.
Consumer markets
• This market supplies the final consumer.
It is a much larger and more complex
market.
• In order to understand the market
businesses look at the Buying habits
and The type of consumer.
The ingredients are not equally
important!
• In most cases the product is the vital
ingredient. No amount of marketing effort
will make a poor product succeed. However a
good product without good support may also
fail.
• The balance will vary. In a price-sensitive
market, pricing will be important. This is seen
in the petrol market. If one company reduces
its price the other follow rapidly.
• In traditional markets reliability and quality
may be the overriding considerations.
Why is Product so important?
• Without product there is no need for
price, promotion and certainly no need
for a place to sell from!
• The product can be either a good or a
service such as banking, the product is
the customer’s account and the
different accounts and schemes on
offer.
The Product – Four Golden Rules
1. Be Market-Driven – not ProductDriven!
2. Get the detail of the product right
3. Know your product’s Life Cycle
4. Make your product different from the
competition.
Market driven – not product
driven!
• Market-driven firms will use market research
to find out what people want, then make it.
This usually means the product is useful – like
a portable CD player with a built-in anti-shock
device.
• Product-driven firms will design or invent a
new product and then try to sell it. This often
means they make something nobody really
wants – like a portable CD player with a builtin toaster.
• With very few exceptions market-driven
firms do best.
Get the detail of the product
right
• The design must be fit for its purpose – it’s
no good making a car that doesn’t start!
• The product name must be catchy. Call your
car the Thunderball, not the X3MS5.
• There must be a suitably broad product range
to give options to all your potential customers.
So make your car in saloon and hatchback,
manual and automatic.
Know your product’s Life Cycle
• All products go through the same life
cycle – they are launched, sales grow
and reach maturity.
• Saturation is when there is no more
room to expand – sales are at their
peak. After that, sales start to decline
and finally the product becomes
obsolete.
Product Life Cycle
Sales
Saturation
This shows
how sales
change over
time.
Maturity
Decline
Growth
Launch
Obsolescence
Time
Product Life Cycle
• The sales life of some products is
longer than others. The sales life of
most cars is about 10 years, but the
sales life of a computer game is only a
few months. It is possible to update and
relaunch the product when sales decline.
This is called an extension strategy.
Product Failure
• Some products do not live up to the company’s
expectations and may suffer an aborted life
cycle, being withdrawn from the market at
short notice. The Sinclair C5 was a one-person
electrical vehicle developed for town travel in
the 1980s. The product was not popular as
people felt vulnerable init due to being near
to the ground and production was quickly
halted. The life cycle would look something
like this:
Make your product different
from the competition
• Product Differentiation – it’s what all firms want. A
firm has achieved product differentiation if it knows
the answer to this question: “What is different about
our product compared to the competition that makes
people want to buy it?”
• It might be that your product has a unique design
feature, or a reputation for reliability, or a cool
brand image.
• if you don’t have product differentiation, people think
your product is identical to others and they will only
buy it if it’s cheaper – which means less profit for
you.
Points to Remember!
• The product is probably the most
important part of the marketing mix
• Products are aimed at particular market
segments
• The product life cycle is the natural
growth and decline of a product
• Branding is how a firm gives a product a
distinctive name or image
• Packaging is vital in reinforcing that
image
Task
• Choose a well-known brand of a product
(smarties, for example or Heinz beans or
Walkers crisps) and redesign the packaging so
that the product would appeal to a totally
different market.
• Explain what market you have aimed the
product at.
• What other changes do you think you would
have to make in the marketing mix to make
this product a success.