Making the Start Up Effective
Chapter 17 p90
Aim for today
Explore the elements of the marketing mix and
how businesses use it to attract and retain
But first for a game...
Pens at the
We try harder
………….. is good for you.
Don't be vague. Ask for Haig.
Happiness is a cigar called ..........
Just do it.
Vorsprung durch technik
Let your fingers do the Walking
There are some things money can’t buy.
For everything else, there’s…………
11. The Happiest Place in the World
So how tuned in are you?...
Haig Scotch Whisky
The Marketing Mix
• The Marketing Mix is a combination of factors
that help businesses sell its products
The marketing mix is made up of the 4 P’s
• A product is a good or service produced
by a business.
• To be successful, the PRODUCT must meet
customer needs. It must do what it says, have
the appropriate specifications and be
appealing (where design/looks are important).
The Product Life Cycle (PLC)
The Product Life Cycle (PLC)
• The PLC is based upon the biological life cycle. In theory it's
the same for a product.
• After a period of development it is introduced or launched
into the market; it gains more and more customers as it
grows; eventually the market stabilises and the product
becomes mature; then after a period of time the product is
overtaken by development and the introduction of superior
competitors, it goes into decline and is eventually withdrawn.
Stages of The Product Life Cycle
Introduction - The need for immediate profit is not a pressure. The product is promoted to
create awareness. If the product has no or few competitors, a skimming price strategy is
employed. Limited numbers of product are available in few channels of distribution.
Growth - Competitors are attracted into the market with very similar offerings. Products
become more profitable and companies form alliances, joint ventures and take each other
over. Advertising spend is high and focuses upon building brand. Market share tends to
Maturity - Those products that survive the earlier stages tend to spend longest in this phase.
Sales grow at a decreasing rate and then stabilise. Producers attempt to differentiate
products and brands are key to this. Price wars and intense competition occur. At this point
the market reaches saturation. Producers begin to leave the market due to poor margins.
Promotion becomes more widespread and use a greater variety of media.
Decline - At this point there is a downturn in the market. For example more innovative
products are introduced or consumer tastes have changed. There is intense price-cutting and
many more products are withdrawn from the market. Profits can be improved by reducing
marketing spend and cost cutting.
The price of a product must reflect the value
customers place on a product.
• No matter how good the product is, it is unlikely to
succeed unless the price is right. For example,
handmade, organic and unique products tend to be
more expensive whereas mass-made items such as
disposable paper plates are generally cheap.
• PRICING can also be used as a strategy to build
reputation and attract customers. Examples?
• Place is about how products are distributed form
producers to consumers. It is ensuring that
goods/services are available to customers where
and when they want them.
• Promotion is the
between businesses and
• It informs customers
about the product,
where it is, what it does
and persuades them to
Promotions methods include:
• Personal Selling
• Sales Promotion
• Public Relations
• Direct Mail
• Trade Fairs and Exhibitions
The extended marketing mix
• Physical Evidence is the material part of a service.
Strictly speaking there are no physical attributes to a
service, so a consumer tends to rely on material cues.
• People are the most important element of any service
or experience. Services tend to be produced and
consumed at the same moment. People can also
include the staff.
• Process – how goods/services are made, delivered,
packaged and consumed
• Create a marketing mix for RYANAIR
- You have 20 minutes -
Product or Service
• Low cost, no frills air travel to European destinations.
• There is no free food or drink onboard. Food and drink
are income streams. You buy them onboard, or you
don't - take your own food and drink if you like.
• There are other income streams - or ancillary revenue.
The company has deals with Hertz car rental, and a
number of hotel businesses. Other examples include
phone cards and bus tickets. About 16% of profit is
made this way.
• Ryanair has low fares.
• 70% of seats are sold at the lowest two fares.30%
of seats are charged at higher fares. The last 6%
are sold at the highest fare.
• Ryanair occasionally get in trouble with bodies
such as the Advertising Standards Authority (ASA)
in the UK over differences between advertised
and actual price.
• Ryanair does not use travel agents so it does not pay agency commissions.
It uses direct marketing techniques to recruit and retain customers, and to
extend products and services to them. You book online over the Internet.
This saves them 15% on agency fees.
• They are based in Stanstead in Essex - which is known as a secondary
airport. It is new and accessible. It is cheaper to fly from Stanstead than
either Heathrow or Gatwick, and since it is less busy Ryanair can turn
aircraft around more quickly.
• Many of Ryanair's destination airports are secondary. For example if you
fly to Copenhagen (Denmark) you arrive in Malmo (Sweden) - although it
is only a short coach trip over the border.
• Keeping aircraft in the air as much as possible is another important part of
the low cost jigsaw.
• They spend as little as possible on advertising and do not employ an
advertising agency. Instead all of the advertising is done in-house.
• Ryanair employs controversy to promote its business. For example in
2009, the company reasoned that passengers would be charged £1 to
use the toilets on board. O'Leary reasoned that passengers could use
the terminals at either the destination or arrival airport. This would
speed things up. It was reasoned that this is what passengers wanted since they did not want other passengers leaving their seats and
walking the aisles to go to the toilet. O'Leary also argued that larger
passengers should be charged more since they took up more room again it was reasoned that this is what the majority of passengers
• Some of their aircraft are decorated in the livery of advertisers e.g.
News of the World, Jaguar and Kilkenny (beer).
• Pilots are recruited when they are young as
pilot cadets. They usually leave after 10 years.
• Cabin crew pay for their uniforms to be
cleaned. They invest in their own training.
They are mainly responsible for passenger
safety as well as ancillary revenues onboard.
• There is no check in. You simply show your
passport and supply your reference number.
• You cannot select a preferred seat. It is first
come, first served.
• There are no air bridges (the tunnel that
connects to the side of the aircraft when to
board it). You walk or are bused to the aircraft.
• Baggage is deposited directly onto the
terminal - it's quick.
• They pay as little as possible for their aircraft.
Planes are the most expensive asset that an airline
• They get big discounts on aircraft because they
buy them when other airlines don't want them, for
example after September 11th, or on the invasion
of Iraq and Afghanistan. Aircraft manufacturers
cannot simply stop a supply chain in minutes. If
orders are being cancelled or delayed, this is when
Differences in the marketing mix
• The marketing mix will be different for each
business and in different industries.
• For example, Ryanair do not advertise on TV
to keep their costs down whereas companies
such as McDonalds and perfume brands see
TV as a vital part of their marketing strategy.
• The most important thing about marketing is to
identify what the consumers' needs are, and then
try to meet them. This is called consumerorientation. To find out what these needs are, a
firm's marketing department or a specialist
research organisation carry out extensive market
• The mix is made up of 4 P’s but often extended to
You have 10 minutes to consider what
you have learnt today and make
appropriate notes in your exercise
Homework – Due Thursday
1. Answer ALL questions on pages 94 & 95
2. Pocketbook Revision: pages 41 & 44
Mr Elephante says
“Don’t forget to remember to:
•Use FULL sentences
•Use FULL STOPS at the end of your sentences
• Use CAPITAL letters at the beginning of sentences and for the
names of people & places.
• Date and title your homework