Transcript Lecture 20- Marketing Mix

MGT-519
STRATEGIC MARKETING
AAMER SIDDIQI
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LECTURE 20
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RECAP
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Branding
Origins of branding
Necessity of branding
Strategy to differentiate
Customer satisfaction
Representation of the brand’s values
Why do we brand products
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RECAP
• Strong brand key to commercial
• High brand equity
• Increased product awareness
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THE MARKETING MIX
• Marketing Mix developed in the early 1960s by Professor Neil
Borden of the Harvard Business School
• Identified a number of company performance actions he
believed influenced the consumer decision to purchase goods or
services
• Borden suggested that these actions represented a “Marketing
Mix”,
• Suggested that the Marketing Mix could be summated into four
elements:
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product
price
place and
promotion
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THE MIX
• Thus was codified the famous four Ps (4Ps) which have gone on
to become perhaps the most famous term in marketing to date
• As with any ‘mix’ the concept is straightforward;
• It provides a list of basic elements whose proportions can be
altered to produce a variety of ‘mix’ with different outcomes e.g.
cement as opposed to mortar, bread as opposed to cake.
– In fact to illustrate this let’s think about a cake mix. All cakes contain
eggs,milk, flour, and sugar. Can alter the final cake by altering the amounts
of mix elements contained in it. So for a sweet cake add more sugar, for a
fruit cake add fruit, chocolate cake – add chocolate.
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PRINCIPLES OF MARKETING MIX
• Exactly the same principles apply with the marketing mix.
• The offer you make to you customer can be altered by varying
the mix elements.
• So for a high profile brand, increase the focus on promotion
and desensitize the weight given to price
• For a luxury item you control distribution – Place – optimise
the quality – product - and quite probably maximise the price
• Co-ordinating the decisions is based on marketing research
and results in a marketing plan
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OPTIMUM USE OF BUSINESS RESOURCES
• A blueprint to optimise the use of the business’s resources to
maximise the satisfaction to the customers and the gains of
the business
• There are major differences when it comes to services
marketing versus the marketing of tangible products. The aim
differences include:
1. The buyer purchases are intangible, you gain ‘ownership’ of
nothing
2. The service may be based on the reputation of a single person or
entity, so branding becomes vital
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OPTIMUM USE OF BUSINESS RESOURCES (CONT’D)
3. It's more difficult to compare the quality of similar services, there
isn’t a list of Features and attributes you can easily compare
4. The buyer cannot return the service; the act of purchase is the act of
consumption
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• EXAMPLE- Car Insurance. In terms of the 4Ps you ‘own’ a right
to compensation if in any sort of accident – that’s the product.
You know the price and indeed all the other elements of price
that might be included, e.g. payment by instalment. The Place
was done either indirectly – through the mail as an automatic
renewal, or directly by you contacting the insurance company.
Promotion could have been via any of the means listed later
in this chapter. But does that cover all the elements that went
into your decision to buy car insurance?
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NEW ELEMENTS IN THE MIX
• The differences mean that there are new elements in the
marketing mix; in fact there are three new elements so we call
this the ‘7Ps’ or Extended marketing mix
• the additional ‘4Ps’ of the ‘7P’ extended marketing mix consist
of
• People
• Physical evidence and
• Process.
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NEW ELEMENTS (CONT’D)
• In car insurance example, potential user might have spoken to a
salesperson or a broker or with a customer service person by phone, or at
a branch office. Might have been impressed by industry reports or experts,
this could have even been online, or by the quality of the documents
received or even by the way the person sounded or were dressed. All of
these start to bring Physical evidence into play which often overlaps into
the Place and People elements.
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DISTANCE PURCHASING
• Today’s world is dominated by distance purchasing via
electronic media such as the internet and telecommunications
• The speed, accuracy responsiveness, and reliability of the
processes are vital
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SERVICESCAPE
• Service marketing also includes the concept of ‘servicescape’
• Refers to but not limited to the aesthetic appearance of the
business from the
• outside,
• Inside and
• the general appearance of the employees themselves
• In essence the concept of servicescape underlines the
interrelated nature of several elements of the 7Ps when
viewed from a customer perspective – it is a marketing
concept philosophy approach.
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SERVICE MARKETING
• Service Marketing has been rapidly gaining ground in the
overall spectrum of marketing
• Focus of marketing education as the developed economies
move farther away from industrial importance to service
oriented economies.
• This can also be seen in developing economies
• The shift to services means a shift away from customer
decisions based on tangible FABs to intangible service
elements.
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EXPERIENTIAL MARKETING
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In services, marketing is rapidly moving into experiential arena
An emphasis on quality of experience and feedback
This has given rise to the phrase "Managing the evidence"
Refers to the act of informing customers that the service encounter
has been performed successfully by us and how was it for you.
• Done in subtle ways like providing examples or descriptions of
good and poor service that can be used as a basis of comparison.
• The underlying rationale is that a customer might not appreciate
the full worth of the service if they do not have a good benchmark
for comparisons.
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SUMMARY
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History of marketing mix
Principles of marketing mix
Optimum use of business resources
The new elements in marketing mix
Distance purchasing
Servicescape
Service marketing
Experiental marketing
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THANKYOU
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