The Marketing Mix - Product, Price, Place and Promotion ‘The Marketing Mx. The 4 Ps Product Price Place Promotion Produets come n several forms. Consumer produets can be categorized asconveniance goods, fr which consumers ar wing Invest \veryimited shopping efforts. Thus, ts essential fo heve these products readily avaiable and have the brand name well known. Shopping goods, in contrast are goods wich te consumers wing fo Invest a great deal ofGme and effort For example, consumers wll spend a grea del of ie looking fora new cr or a medical procedure. Specialy goods are thoes Unalee of intrest only fo ‘a narow segment othe papulaten-e 9, dling machines Indust! goods can eiso be Broken doun ino subgroyps, depending on ther Uses. It should elo be nated a wiih the context of markang decisions he frm product afore to more han fangble goods sence can bea produc oo ‘Afi’s productline or nes rofars othe assorimont of similar things that the frm holds. Samsung, fr example, has bot alneoflasor brnlrs. My have iforon typos silo diforent needs of ht diforant consumer segmonts In contast. to fan's product mix ‘Sescribes the combinaton of éiferentproduct lines Bat the fem hols Boeing, Or example, has both @ commercial skerafland a defense line ofproduets hateach ake advantage of sme ofthe ame core competencies and tochnologes of ne fm. Some fms have one vary cused or narew product ine (2..AFC does arly chckan righ While otters maintain numerous ines tal nopetuly a have some common heme. ‘This mprosants 9 wide product ix 3M fr example, makes a lage assorent of gods that are thought be related inte sonse tat hey use he fn's ability to bond suraces together. Depth refers tothe varety nats ofeed wihin each productine. Meybelineofers a great {ot of opin psicks wih sudo aifronces in aces wnie Norton Sai ofersfwvarot0s ois product Products may be diferentated in soveral ways. Some may be represented as being of superior qual 9, Meytag),or hey may ier in ‘mor ar rary weysin tars of syies-some people ike ane styl bal ian another, wile are ina rea cansonsus on whieh ane ithe ‘superior one. Fnaly products can be dferentated in terms of toring arent levels of serves fr example, Volvo ofers a guarantoe of treo, reliable towing anyuhere should tho vehicle break down. American Exorossoflers sores not flees by many ober charge cards.Joeman oases son 204 nine) Marketing mix “The marketing mix the set of contoliable, acical marketing Wools thata company Uses to produce a desired response from its! ovis Reonetstsofeveryhing that a company can do‘o infuence demand for is product is also ¢ bo i» lp markeong planning and ‘omeuton Marketing mix: Kotler on marketing Marketing mix deseribos tho stools that management can uso to infu eae. The radon formulation i called the APS 2, ws lace, and promotion. From the verybeginning questions were sized about the 4P frmulaon ofthe marketing mi ‘+ Portumo companies wantod packaging tobe added as at P. 4P guardians said tat packaging is akoady nth scheme, undor product + Soles managers asked wheter te sales force was ef outbecausei'begsn wi an S.No, sid dhe quarans, sles free 8 promotion oo) slong ip sueninn snore Band dec! marketing. ‘+ Senice managers asked where services were inte marketing mix or whether Bey, to, were excluded because the fst leter was S. ‘ere the quareians sad sericea pat of re product A senices grew more portent, service marketers suggested adding Bree sip me anginal 4Ps. namely personnel. procedures . and physical evidence - nus @resiaurans performance wll depend on it ‘Saf the process by when serves food (buf, fst fd, tabledots, ec) and ts physical ooks and fests asa vestourent * Others suggested adding personalization tthe marketing mix. The marketer has to decide how personalized to make te product, the price, the place, and the promotion. * Inmy own case, | suggested ading pois and public rlatons ote 4Ps, because thse can als infrence a company's abiiy sel, ' tone te, {had also proposed escaping fom the prison ofthe later P by redfning te essential uncon ofeach P- Product - Configuration Price Valuation Prace . Fecitaton Promotion . ‘sympoieaton ‘Amore basi ricism has boon thatthe 4Ps represen the sollar's mind-set notthe buyer's mind-set Robert Lauterom suggosted tat ‘Soller souls frst work wh Cs before satin te 4Ps. 7 The 4Ce are customer value (nt proéuc, customer eos (not price alone), convenience (notpace), and communication (not promotion). Cace te markster thinks trough the #Cs forbes osc lk ‘becomes much easorto set the Ps. “Tne can substitute foreach oterin ering sales. Acar dealer sold cars wih 10 salespeople and normal markups. His sales were poor “Then he cut his staf ve salespeople an lowered his car ries significant, He dd end-ofice business, Silay Jef Beas, CEO of ‘Amazon, reduced his advertising expenditures and lowered his book pices, and Amazo's sales shotup signieanty, Seting he 4Ps is dicult because of ter intracions. Take product and place: * Suppose products 0 and place is 1. Howmuch i 0» 12 Answer = 0. *+ Suppose products 1 and place is 0. How much fs 10? Answer = 0 + Suppose products 1 and place ef. How much is 1* 1? Answer=3, ‘ne sotects marking tots that are appropri othe stage of products ite cyte. For example, advertsing and pubic wil produce te biggest payofn bn nvoducton stage of preduct tha Jb Ito build consumer awareness and inorest Sales promovons ara _porsonal sofing rommor important during aproduets maturity tage. Porsoalseling can stengtian customers'comprohiansion of your Droduet’s advantages and therconvcion that fhe offing ' wart. Sales promovons are most eflecve ar tiggerng purchases today. Inthe decine stage, tne company shoul keep pushing sales promotions but reduce advertising, publicly, and personel sling. ee nent amen el AA OAC AZENESEDS petite‘The choice oft is algo inuenced by company si. Marka leaders can afford more adersing and use eales promotion more sparingly. Smaller competion, in contast use sales promotion mare agaressiely. Consumer marketer tond to emphasize adveising over personal saling, and © 01» do the reverse. But bot tots ore ‘aquired in bth typos of markets. Consumer markelrs who ermphasize push strategies nood tor sales force fo convince retails oF dealers to cory, promole, and sl fe company's product and users. BY contest, consumer marketers who emphasize pull stalegles Poly heavy on advertising and consumer promotions fo draw customers into stores, Formarkoting to work, you must manage the marketing mixin an integrated fashion. Yetin many companies, responsibil fr diferent ‘lemenis ofthe marketing mixisin he hands of aifrentincduals oF departments ‘copyight ©2003 by Pip Kote. MI ghee ered Publahed by John Vley& Son, Hoboken, New Jersey ti ivwusulevoonMile CDA Ag lod iod 047 268874 hal The four Ps of marketing “The marketing miccan be dived int our groups of arables commoniyknown 3s the four Ps: 0 Product: The goods andlor senees ofered bya companyto ts customers place or sntib.tinn).and Price: The amount ofmoney paid by customers to purchase the productfeature: The ric lace: The aces thetmake the produt available consumers. - Produc Placement (athe Emmys)in Aople Coporale Sixes, Elsctonic Stores such as Best Buy Here’s your chance to hop on the iPad fever! Tweet & Win! Marketing tools ach ofthe four Phas fs own also conte oe marge Product varely, quay, design, festires, brand name, packaging, sanicas Pree: stp, discounts, allowance, payment perod, crest ems Place: channels, coverage, assortments lacatone, inventor, ansportaon, logistics Promotion: advertsing, personal seling, sales promotion, public eatons (im ) (Read Online)The First P - Product martina nevoroduct im) Product strategies ‘nen an organisation intoduces a producini @ market hey must ask hemsehies a number of questions 1. Whois the product aimad a? 2, What benef wil hey expect? 2, How do they plan to position the product within the market? 4, What cliferential advantage wil he product ole over hei compesors? {Mtnas a varied product ine: ‘We must remember hat Marketing is fundamentally bout providing the corect bundle ofbenefis to he end user, hence the saying* ‘Marketing Is not about providing products or services its essential about proviaing changing benefits othe changing needs 8rd demands ofthe customer (P.Tallor 700), Prilp Koterin Principles of Marketing devised avery interesting concept ofbenefitbulding wih a product Fora more detalled analysis please rofor'e Prnepls of Marking byP Kater. Kotler suggested that a product should be vowed in three levels. Level Core Product. Whatis the core benefit your product offers, Customers who purchase a camera are buying more then usta ‘camera eyare purchasing memories, “Level 2 Actua Product: Al cameras capture memories. The aim isto ensure tat your potential customers purchase your ono. The sratsgy althis level motes organisatans branding, adding ealures and benefits fo ensure hal heir product oles darental advantage Eom their compettrs Level: Augmented product: What adetonal non angible benef can you afer? Compatton atthe lve is based around ater sales ‘sendce, warantes, delvery and soon. John Lewis areal deparm nia store ofers fee fe year guarantee on purchases of her Telovsion ses, bis gies ther ‘customer the additonal benef of peace of mind over he fe years should thelr purchase develop a fou Product Ltecycle Product Lifecycle phous bes 8.0.00 (Wateh Meo Onin) Prot Decisions ‘mon pacing 2 product witin a market manyfactors and decisions have obo takan ino consideration. Tes incude: ‘Product design - Wile dosign be he soling point for te organisation as we have seen withthe MAC, te new WY Beetle or te Dyson saouum dearer Product quality: Quay has consistent wit other elements of ne marketing mix Apromium bases pricing stategyas to reflect tne ‘ually product fers Product features: What features wil you ede tht may crease the benett offered to yourtarget market? Wil he orga iserminatoy pricing policy for ofring these additonal bnotts? Branding: One ofthe mostimporant decisions a marketing manager can makes about branding. The value of brands in todays ‘enwronmentis phenomendl Brands have the power ofinsant sales, ey conveys message ofeantdenee, quality and relay their target market ton us ee nent amen el AA OAC AZENESEDS pensaiteBrands have tobe managed well some brands can be cash cows for exganisations. In many organisations theyare represented by brand managers who Rave hugh resources fo ensure hel succoss witin he market ‘Abrands a too which is used by an organisaton fo diferenfate self fom competitors. Askyourselfwhatis te valve ofa pir of Nike ‘raners withthe brand othe logo? How does your perception chenge? Increasingly brand managers are becoming annoyed by copycat strategies being employed by supermarket food real stores parcular ‘witin the UK Coca-Cola reataned legal acon against Ukrlaler Sainsbury afer naducing ther Classic Cola, which iepayed similar ‘signs and fonts on their cans Intomet banging fs now becoming an essential part of te branding stalogy game. Gonericnames lke Bankcom and Businoss com have been sold or G's ( Recently witin he UK banking industywe have seen the invoducton ofintamel banks such as eahootcom and ‘marbles.com the task bybrand managers isto make sure that consumers understand that hese brands are banks! Pricing Strategy Deciding your cing salegyinvohes determining how you wil price your productor sence inorder lo ensure this your product, your targeted consumer anc how much fey are wiling © pay wih the goal af generating a reasonable prof Penetratrion Pricing “This ype of pricing is usually considered when launching a new produethatisantcipatod to havea Jonge oc, Rimolves establishing a low pice to secure large sales volumes that wil ponevatealarge mass of consumers. Cost Plus Pricing + Sette price atyourproditon ost. insuting beth cost of goods and fixed costs your current volume ls certain proft ttargr for enample your widpets con 920 rau materia ae production cout, ada curensalee vue (or eneted inal eal woke), Jour ied cons come to $30 pert Your tt ost $50 por unt You decide het you want operates ‘8 20%markup, so you add $10 (20%x $50) tothe cost and come up with price of $60 per unit So long as you have your costs, Ccaleulated correctly andhave accurately precited your sales volume, you wil alvays be operating ata prof. Value Based Pricing Video jabs: (Wateh Video Oring) when you decide on a yalue based srategyyou must understand how hgh ou can price your productor serve with respect the ‘consumer perceptual velue. Biamples ofvelue-based pricing stategios ee nent amen el AA OAC AZENESEDS retort+ Pie be same as compettors. ‘Establish alow price (compared tote competion in order to capture a large number ofustomer in hat market + Price a prostge orunique product hati veluabie customers high Cost Plus Pricing “This is when the prices to the market are estlshed, with cost (pls minimum prof sens micimum pricing ‘This 9p0 of pricing statoaymayincroase sal butmay be temporary fom a proftperepecte, + For example, hockey sticks cost 20 in raw materials and producton costs, end at curensales volume (or entipated nits sales ‘lume. our fhed costs come to $30 per unt Your toa cots 650 per unit You decide hat you wantto operate at 220% markup, 50 you ade $10 (20% x $80) to the cast and come up wih a price of $60 per un. So lng as you have your costs calelatodcorecy ‘and have accurately priced our sales volume, you wll aways be operating aa prof. ‘example fom s/s Loss Leader Loss Leaders (products or serves) I pricing srategyused when companies wanttoatractnew customers, where te customer wll ‘come in buy he product or series on sales but have te intent for these customers lo purchase goods /senfess al regular pe Penetration Pricing eneraton cin sbleyis when ou see pes owe pnstate he market aac lume ober usualyused when a ew productisingeduced Into tho market, Kobo e-reader ie an ampleextraordinary eReading, ‘Skimming - Pricing Strategy Price Skimming is when @ company charges charging @ higher pce dung a shor period oftime.Typleallythis occurs when 8 new, innoave, or much improved producti launched onto a marketThe seatogy href fo skim (ke cream ate op of milk) oe ‘consumers who have te income and are wiling to sor purchase his new product Task Reflection ‘Task Reflection Considering your tem tat eter you playon now, oa fea you haw played onthe past can you please wile about the product (te team). now ils priced (Eck prices fo the consumer) the place you were located he bullding -hockey arena). and how the Tearn( product was promoted what marketng tnls?- PR, Sponsorship, Sales Promotions Web ads- web page, web marketing, Ty, prin radio) ‘Mer yu established the 4 P's - would ke you to allel and comment on whether ou believe that hey the team) made successful choices which resuiledin ticket sales. emallyourrelecton ask othe professor sem0 won Place Nie cs = Distribution eters to how you are going to get the productserice your customerieonsumer. You question whether you willselithrough atore via|an commerce sconai. restiotesamietoatncem scien GB ‘tl you nese an intormodiary? Someone who could be a sales agent a wholosler..? ee nent amen el AA OAC AZENESEDS remsarneaa “There are3 yoes of dstibuton Intense Distibuton: This ype of cistrbutons usualy uses to distrbute lower priced or mpulee purchase products suchas candies and um. icusive Distbuton: This preductis higher priced, ususally quires on intermediary ands limite oa single outet Car dealerships isan ‘ample otis. Selecive Distibuon:This occurs when fewer eta ules are used to distribute praducs suchas computers, PBS The Persuaders ‘Amatcans ore ewimming ina sea ot messages. Each year, legions ofa people, copys, marketresearchers, posters, consulants and even inuists_mostof whom work or one of ‘skglantcompanies. spend bilions of dollars and millons of man-hours tng © determine Row to persuade consumers whatto buy, ‘whom fo ust and whatto tink. Increasingly, nese techniques are migratng othe high-stakes arena of poles, shaping poloyand Intuencing how Americans choose ter leaders Promotion Walch he Perauader Link above. Promotion one of he Ps in the marketing mixand has lis own mixof communications tools which shouldbe integrated as they work in harmony long as the message Is consistent Includes: PR, Personal Sling, TV ado, Pint, web 2.0, sponsorships. (1) Advertising “This is any paid non-personal communication oL.telesion, newspapers, magazines bilboard posters, radio, cinema ec. Advertsing is Intended persuade and tier, THEM “Tne medium (how you getine message tthe consumes) (2) Personal Seling ‘Oral communication wit potenial buyers ofa product with he inlet of making a sae, The personal sling may fous initallyon {veloping @ relationship with the potential buyer, but il aluaysulimtly end ith an atempto "dose the sale" (8) Sales Promotion Providing incentives fo customers or othe datibugon channel to aimulale demand for» product (4) Pubstoy ‘The communication of produc brand or business by placing information sboutitin the medis witout paying forthe ime ormesi space drecty otherwise known as public relations" or PR ‘Advantages and Osadvantages of Each Sement of the Promotional Mix Mix Bement ‘Advantages Disadvantages ‘Advertising (Good for building awareness Impersonal -eannotanswer alla customers Poe Senenorc caPersonal Seling Efecto atreaching a wide ausionce Repetion ofmain brand and product pasitoning helps bud ustomerwust Hightyintracaie-lts of commuricason between me buyer and eller ‘Ecllent or communicating complex/ detailed product Information and features Relationships can bebultup - important dosing the le make taka along time questions Not good at geting customers to make foal purchasing decision (Gosty- employing a sales force has many hidden cost in addon wages Not suitable there are thousands offmpodant buyers ‘Sales Promation ‘Can stimulate quiet increases In sales by rooting promotenalincontves on parcularpreducts Good shortteem tet toot itused ver he longterm, customers may get used tote otox ‘Too much promotion may damage he brandimage Public Relations ‘Often seen a8 more “eredibie"-sinoe the message soma to be coming om atid pary eg magazine, newspaper) sap way ofreaching many customers 's achieved trough ie ight media, ithe publicity Social Media Marketing Video copious balls. (Wateh ideo Onting) Riskotosing contol -cannot always contol what cher people wit or say aout yout product BS eC) Guerrilla Marketing Video. bie nen cnet nt tASOINAGMAHDUAL003, esteprauenaenoaee sons Video hoy bet SA QNateh Vde0 Online) ‘"tyou must porsuade, ts beter to appeal io emotion rather han intlloct- Benjamin Franklin 1793, ee nent amen el AA OAC AZENESEDS esto