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MARKETING MIX

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Learning objectives (L11/12)


Introduce the concept of the marketing mix
Describe the key features of each element of
the traditional mix, as:
Product
Price
Place
Promotions

And, of the 7Ps of the services mix.


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Borden HBR 1964

The Marketing Mix


Culliton 1948

Marketers as
mixers of ingredients

Green Mix- BPP


McCarthy 1950s

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Marketing Mix- 4Ps

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Marketing Mix- 4Ps

Figure1.5

Brassington & Pettitt


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Marketing Mix- 4Cs


Customer focus:
Customer benefits
Cost to customer
Convenience
Lauterborn 1990

Communication
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Undifferentiated Mix

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Differentiated Mixes

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Concentrated Mix

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Services Mix -7Ps


Any activity or benefit that one
party can offer to another

that is essentially intangible


and does not result in the
ownership of anything
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Services Mix -7Ps


INTANGIBLE though there may be
some physical aspects
INSEPERABLE from the provider
HETEROGENEOUS or VARIABLE
from customer to customer
PERISHABLE cant store and sell later
NON-OWNERSHIP no title deed
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Services Mix- 7Ps


People
people buy people
Processes
make it easy
Physical evidence
proxy for tangibility
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PRODUCT
The 4Cs marketing mix

Customer benefits

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Product dimensions
INTANGIBLE

CONSUMER GOODS
Durables/Semi-Durables
Convenience goods
Shopping goods

SERVICE
TANGIBLE
ATTRIBUTES

Speciality goods
Unsought goods

Kotler

INDUSTRIAL GOODS
Raw materials
Installations
Equipment
Components
Consumables
Services
Energy/Utilities

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Product Dimensions: car


INTANGIBLES
Marque, image, reputation, exclusivity, quality, reliability

SERVICE
Pre/after-sales, delivery, servicing,
repairs, HP & finance, warranty,

TANGIBLES
Physical aspects of size,
seats, colour, styling, mpg,
performance etc
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Product dimensions
POTENTIAL
INTANGIBLE
ACTUAL PRODUCT
Quality

Brand

Credit

Economy
Warranty

Auto-steer
Dibb et al

CORE
BENEFIT
Travel

Speed
Specn

Styling
Servicing

Trade-in

Staff

Delivery

Self repairing

Water fuel
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FAB: Product Benefits


People buy a bundle of benefits:
Features: what the product is
Advantages: what this does

Benefits: how the customer gains

FAB: Product Benefits


People buy a bundle of benefits:
Features: what the product is
FEATUREthis car has a seat belt

which
that
Advantages:
whatmeans
this does
ADVANTAGE it secures you in a crash
which
that
Benefits: how
themeans
customer
gains
BENEFIT. you dont get injured
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FAB: Product Benefits


Multiple advantages & benefits:
FEATURE
ADVANTAGE
BENEFITS
This car has power It takes less effort to Its easier to park
steering
turn the wheels Its less tiring to drive
This fleet /Co car It makes the car fuel Its cheaper to run
has a Gizmo
efficient
Lower car tax
engine management
Less time wasted filling up
system
High performance
Lower outlay until exp paid
Less engine wear
Less pollution
Low octane
fuel
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Product features
But what benefits
will they deliver?
100% pure cotton
Tasty and filling
Authentic recipes
Pure ingredients
Easy to prepare
Oven, grill or microwave
Full meal in a box
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Hard-wearing
Range of fittings
Easy-care
Range of colours
Classic design

USP: Unique Selling


Proposition (Point)

What benefits make your


product stand out?

Citroen:
Technology as it should be: 100% useful..
Olympus cameras:
All the features of a professional camera
but without the fuss..
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USP: Unique Selling


Proposition (Point)
Authentic, pure and tasty
just add wine

Work, rest and play jeans


that will last the course,
whatever your lifestyle
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PRODUCT LIFE CYCLE

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Product lifecycle
Traditional plc

Break-even

M A T U R I T Y
EARLY

LATE

DECLINE
SENILITY

GROWTH
LAUNCH

PROFIT

DEATH

NPD

COSTS
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GROWTH
market acceptance gained
sales and profits rise
achieve break even
danger of copy-cats

Product lifecycle
LAUNCH-INTRODUCTION
Traditional plc
aim to get try and buy
can cost lot in promotion
risk of failure- 80% fail
low sales- loss making

MATURITY
sales stabilise- lower margins
competitive- fight for share
shake-out of less competitive
may extend via plc extension

DEVELOPMENT- R&D
product concept cheap
R&D costs may be high
need to keep secret
abort if unviable

DECLINE
sales and profits fall
often overcapacity
highly competitive
exit mktor milk

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PLC: demand plc


DEMAND LIFECYCLE: eg home music-players
TECHNOLOGY LIFECYCLE: waves of technology
PRODUCT LIFECYCLE: product types
MODELS LIFECYCLE:
specific models

Digital

music centre
solid state Hi-Fi
valve Hi-Fi

Analogue
mini
centre

valve radiogram
Pianola

Music
box

Mechanical recording

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Product lifecycle
Portfolio plc (cp BCG)
PROFIT
A
F

B
E

C
D
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PLC: strategic characteristics


LAUNCH

GROWTH

MATURITY

DECLINE/SENILITY

Based on Wilson and Gilligan


FOCUS
EXPAND MARKET
mktg objective trail purchase

GAIN SHARE
build custr base

DEFEND SHARE
keep share/profits

REDUCE COSTS
milk then exit

Sales

Low

Rapid increase

Peakingstable

Falling

Cost per custr

High

Average

Low

Low

Profits

Negative

Increasing

High low/unit

Declining

Customer type Innovators

Early adopters

Majority

Laggards

Competitors

Increasing- copies

High shakeout

Few.. Shakeout

Few

Comp strategy Unfocussed and


indirect

Gain share- low


Price & aggressive
prod differentiation promotion

May revitalise
cost cut exit

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PLC: mix strategies


LAUNCH

GROWTH

MATURITY

DECLINE/SENILITY

Based on Wilson and Gilligan


FOCUS
EXPAND MARKET
mktg objective trail purchase

GAIN SHARE
build custr base

DEFEND SHARE
keep share/profits

Product

Basic- untested

Develop range

Modifydifferentiate Phase out dogs

Price

Low or high?

Low- penetration

Competitive

Reduce.. or milk?

Place/Distbn

Selective limited

Intensive

Intensive

Selective

Promotion

Heavy.. awareness

Moderate.. high

Aim to differentiate

Limited

Sales promo

Hi-encourage trials Low level

Hi brand switch

Few.. or sell off?

Planning
timeframe

Sort-medium term

Medium range

Short term

Long range

REDUCE COSTS
milk then exit

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PLC: product life extension


Re-launch revive, repackage and re-launch
Re-position Lucozade went from illness to sports
Re-style cars: new grilles, special editions etc
Re-design MS 97/2000/XP/Vista/Win7 Office Suite
Customise lunch box foods, handbag size tissues
Innovate mobile phones to I-phone
Revive VW Beetle and BMW Mini (retro-mktg)
growth

maintenance

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PLC: problems
Where
are you
on the
plc?

How long is maturity?

What shape is the plc?


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PLC: variations in shape


Tellis and Crawford (1981) identified 17 shapes
Swann and Rink (1982) identified 10
Short-life
high sales

Incremental
growth
Re-vitalisation
Hump.. phases
to create
then settling
S curve
classic curve
Cyclical
revivals in
Short-life
popularity
low sales Tail
Slow take-up

How do you know which shape yours is?


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PLC: self fulfilling?


This products still got lifelets
push it in the market
Lets do nothing
We think this products
about to die so lets
stop promoting it
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PLC: competitors action


Poor competition with
uncompetitive products
and marketing

Your plc

Strong competition
with competitive products
and marketing

Your
plc

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PRODUCT & BRAND


PORTFOLIO

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Product Portfolio:Dimensions

Product Portfolio

LINES

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Product Portfolio:Dimensions
Workwear

Standard

Fashion

LINE DEPTH
FASHION
Flares

LINE ITEMS
Hipsters defined by:
Colour
Baggies
Waist
Embroidered Leg
Faded
Bondage
Cut-off
LINE LENGTH
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Product Portfolio:Dimensions

Delish Ready Meals


Indian

Tex-Mex

Chinese

Italian

Line Depth:
Beef Madras
Rogan Gosh
Chicken Tikka

Beef Vindaloo
VegeKorma

Line items
Single
portion

Family
pack

Lunch
Pot

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Brand Portfolio
Hi quality/status

low

high
Viable segments

Lo quality/status
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BRANDS

Brand Portfolio
Extra

Superstore

60,000+ sq ft

20,000-50,000 sq ft

Express

Metro

up to 3,000 sq ft

7,000-15,000 sq ft

Non
Tesco 527 ONE-STOPS

Consumer VAT savings


Tesco tax savings

Direct
online

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BRANDS

Brand Portfolio

TECHNIKA

41
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BRANDS

14

Decathlons passion private brands


Kapferer

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INNOVATION AND NEW


PRODUCT DEVELOPMENT

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Innovation & invention

Technology Timeline:
OR a downturn of
innovation and invention
since the 1800s?

bio/nano
age

silicon
age

Huebner and Jones (Sunday Times 16/10/05)

stone
age

age of
steam
enlightenment age

plastic
age

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Innovation & invention

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Innovation & invention

Take up:

technology transfer

microchips

Military
Aerospace

Science

Specialist
Luxury

General
ubiquitous

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Innovation & invention


IDEAS
SCHEMES
offer bonuses
REVERSE
ENGINEERING
competitor's
products

COST SAVING
finding cheaper way
to do things

NEW
TECHNOLOGY
new products

SOURCES OF
INNOVATIVE
PRODUCTS

MKT RESEARCH
identify new and
changing needs

SEGMENTATION
identify new marketmicro/niches

TECHNOLOGY
TRANSFERANCE
new uses
TECHNOLOGY
IMPROVEMENT
incremental
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New Product
Development

NPD Process:

Ideas generation research/feedback/sales team


Idea screening fit with organisation/feasible/prima-facie
Concept testing inc initial design/consumer testing
Market strategy developmentmarket feasibility

Business case marketability/sales pay-back..profit


Product R&D detailed development/testin/packaging
Market testing feedback/test mkt/research/focus groups

Commercialisation full launch


REVIEW amend/revise/relaunch/extend etc

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New Product Development

New product failure rate:


Ideas

NPD
Cost

CUT
YOUR
Business case LOSSES

Screening

Development
Test market
Launch

Commercialisation
(profit)

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New Product Development

Risk of failure:

success

PROFIT
LOSS
technical
success

death
valley
failure
launch

breakeven

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New Product Development

Types of innovation & Success:


Adapted from Calentone & Cooper 1981 cit Blythe

CLUSTER 1
Improvements over
existing but no synergy
with Cos tech/mkts

CLUSTER 4
Truly new to the
world product with
unique technology

CLUSTER 7
A me to copy with no
extra benefits but with
some synergy with Co

CLUSTER 2
Technical development
but no real advantage
over current products

CLUSTER 5
A me to copy with no
extra benefits and no
synergy with Co

CLUSTER 8
Truly innovative and
improvements but no
synergy with Co

CLUSTER 3
A me to copy of a
competitor's product
with no extra benefits

CLUSTER 6
A me to copy with no
extra benefits but made
to be cheaper in mkt

CLUSTER 9
Line extension offering
minor improvements on
Cos current range
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Product adoption

New product adoption rate:


2.5%
Innovators

13.5%
Early
adopters

34%
Early majority

34%
Late majority

16%
Laggards

Schiffmann and Kanuk (from Bourne)


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