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2) Explain the various elements of the marketing process and evaluate the benefits and costs of a marketing orientation for a selected organisation
Marketing is a general term used to describe all the various activities involved in transferring goods and services from producers to consumers. In addition to the functions commonly associated with it, such as advertising and sales promotion, marketing also encompasses product development, packaging, distribution channels, pricing, and many other functions. The modern marketing concept, which is applied by most successful small businesses, is intended to focus all of a company's activities upon uncovering and satisfying customer needs. After all, an entrepreneur may come up with a great product and use the most efficient production methods to make it, but all the effort will have been wasted if he or she is unable to consummate the sale of the product to consumers.
Task 2 (AC2.1, 2.2, 2.3, 2.4, 2.5) What are the macro and micro environmental factors that influence marketing and how they may influence marketing decisions.
Macro-marketing refers to the overall social process that directs the flow of goods and services from producer to consumer. It is the economic system that determines what and how much is to be produced and distributed by whom, when, and to whom. E. Jerome McCarthy and William D. Perreault, Jr. identified eight universal macro-marketing functions that make up the economic process:1) buying, which refers to consumers seeking and evaluating goods and services;2) selling, which involves promoting the offering; 3) transporting, which refers to the movement of goods from one place to another; 4) storing, which involves holding goods until customers need them; 5) standardization and grading, which entails sorting products according to size and quality; 6) financing, which delivers the cash and credit needed to perform the first five functions; 7) risk taking, which involves bearing the uncertainties that are part of the marketing process; and 8) market information, which refers to the gathering, analysis, and distribution of the data necessary to execute these marketing functions. In contrast, micro-marketing refers to the activities performed by the individual providers of goods and services within a macro-marketing system. Such organizations or businesses use various marketing techniques to accomplish objectives related to profits, market share, cash flow, and other economic factors that can enhance their well being and position in the marketplace. The micro-marketing function within an entity is commonly referred to as marketing management. Marketing managers strive to get their organizations to anticipate and accurately determine the needs and wants of customer groups. Afterward they seek to respond effectively with a flow of need-satisfying goods and services. They are typically charged with planning, implementing, and then measuring the effectiveness of all marketing activities. Micro-marketing encompasses a number of related activities and responsibilities. Marketing managers must carefully design their marketing plans to ensure that they complement related
To identify segments. although many other kinds of companies and organizations use this technique. however. and socioeconomic characteristics in order to determine their patterns of consumption and how they will respond to various marketing strategies. such as distribution and sales methods. companies can develop advertising programs for each segment. Instead. Market segmentation—also called micromarketing—simplifies the marketing process. or focus groups—to determine which customers would be most likely to purchase its offerings. and then deliver products and promotions that ultimately maximize the profit potential of that targeted market. or other factors indicative of buying patterns. Advertisements and promotions could then be tailored for each segment of the target market.S. tastes. it is only by carefully selecting and wooing a specific group that a small firm can attain profit margins sufficient to allow it to continue to compete in the marketplace. or develop new products to appeal to one or more of the segments. For example. Propose segmentation criteria to be used for products in different markets choose a targeting strategy for the selected product/service and propose new positioning Market segmentation is the process of identifying key groups or segments within the general market that share specific characteristics and consumer habits. or the product itself can be altered to appeal to different personality types or age groups. For instance. which more than likely lack the resources to target large aggregate markets. is to identify a specific market. a manufacturer of fishing equipment would not randomly market its product to the entire U. Once the market is broken into segments. market surveys. It is the responsibility of the marketing manager to take all of these factors into account and to devise a cohesive marketing program that will appeal to the target customer. product packaging can be designed in different sizes and colors. whereby the group is further broken down by age. zip code. distribution. licensing strategies. They must also allow for constant adaptation to changing markets and economic conditions. and advertising media also play an important role. Perhaps it would target males in the Midwest between the ages of 18 and 35. it would likely conduct market research—using such tools as demo-graphic reports. population. because it allows them to target specific groups that might not be reached by mass marketing programs. There are infinite ways to address the wants and needs of a target market. Catalog retailers and direct-marketing firms make up some of the key users of market segmentation. The primary information marketers seek is why consumers purchase specific products or services but not others. It could then more efficiently spend its limited resources in an effort to persuade members of its target group(s) to buy its products.production. marketers examine consumers' interests. Producers can also change the warranty or durability of the good or provide different levels of follow-up service. focus advertising on one or two segments or niches. because it allows marketers to concentrate their advertising on groups of consumers who . This is particularly important for small businesses. The company may even strive to further maximize the profitability of its target market through market segmentation. income. and financial constraints. preferences. Companies often favor this method of marketing to the one-size-fits-all mass marketing approach. Often. Other influences. or group of consumers. Perhaps the core function of a marketing manager.
marketers must be able to reach the segments through their advertising. these groups might be so small that they do not justify the expenses associated with market segmentation. marketers must find out if the market can be identified and measured. they can expect better results from each segment than they could expect from these consumer groups if treated as a whole. convincingly illustrate these advantages of market segmentation. and government agencies. A company also may opt to target just one segment of the market. Because marketers focus their advertising on specific segments. Market segmentation also can be more efficient than traditional marketing techniques such as product differentiation. creating segments where consumer needs and wants are likely to change would not be productive. marketers must gauge the responsiveness of the segments and find out if a proposed segment would likely respond to a marketing campaign. Since it takes time to prepare a marketing strategy for specific segment and since it takes time for market segmentation to be profitable. which entails determining which consumers belong to specific market segments. While marketers can easily divide the total market into smaller groups. For example. Marketers. marketers must determine if the segments are large enough to be profitable. such as men between 20 and 35. Third. If a catalog marketer provides both men's and women's clothes. corporations. To do so. Market segmentation. for instance. therefore. First. works effectively only for certain kinds of products and services. marketers must determine if the segments will change in the near future. But contemporary catalog retailers produce numerous versions of their catalogs designed for specific market segments. then marketers have no way of reaching the segment and so the segment is superfluous. otherwise marketers have to create very general advertising and hope that it will appeal to a diverse audience. If the members of a particular segment do not share interest in a common magazine or television show. thereby differentiating the needs of each of these four segments and appropriately targeting them. a company might find that its competitors are not reaching specific segments and decide to target this segment or niche exclusively. men between 35 and 50. Fourth. Companies can implement market segmentation in three general ways: through differentiation. small businesses. a computer maker could market its products to home users. and atomization. At one point catalog marketers relied on this approach. After considering various segmentation bases and conducting research. employing the market segmentation method of concentration. however. concentration. Differentiation refers to marketing products or services to different market segments based on each segment's individual needs as well as to developing new products for different segments. can produce specific advertising geared towards specific segments. If it is not probable that a segment will react to a promotion. the company could fail to capture the attention of many potential customers simply by having a man on the cover and sending it to women or a woman on the cover and sending it to men. women between 20 and 35. for example. and women between 35 and 50. Catalog clothing stores. then the segment is not useful. Fifth.share significant characteristics. could concentrate solely on the home-user segment of the market and ignore the needs of the other segments. By sending such a catalog to all potential customers. to determine whether to segment a market. the computer maker would have to offer products that . for example. it would have to produce a very large catalog to include all of its merchandise. Second. A computer maker. which would cost a lot to produce and mail.
but to find out why it is required. and distribution strategies. The underlying concepts of this chapter form a system in which the individual consumer is the core. For marketing to be successful. Marketers also consider what a company's strategic position in a market is—e. if it is a computer supplier to home users or businesses—and create a marketing program that will help a company achieve or maintain this position. The information used to help create the market segments should help marketers choose among promotional techniques (e. Second. direct marketing. Atomization involves dividing the market into very small segments. Some marketing analysts predict that atomization will grow in the coming millennium as companies strive to offer more individualized service.meet home-user needs at prices these consumers could afford. This information also should help marketers choose among various advertising media. Such an understanding of buyer behaviour works to the mutual advantage of the consumer and marketer. which may include a single customer in some cases. or location. When choosing a method of market segmentation. because differentiated marketing. then developing promotional strategies and reaching the target segment should be relatively easy. they must select a method consistent with company resources. it is not sufficient to merely discover what customers require. and sales promotion). it might have to build special computers for various government branches based on their individual needs. If the product line is expansive.. has a significant cost and some companies may not be able to afford it. marketers must take several factors into consideration. pricing strategies. then marketers usually opt for the differentiated marketing method. The marketing strategy will try to make the target product or service appeal to the target segment through an advertising campaign developed based on segmentation information such as age. surrounded by an immediate and a wider environment that influences his or her goals.g. however. allowing the marketer to become better equipped to satisfy the consumer’s needs efficiently and establish a loyal group of customers with positive attitudes towards the company’s products. marketers must integrate the method into an overall marketing strategy. Although rare. it may appeal to small businesses in particular. Only by gaining a deep and comprehensive understanding of buyer behaviour can marketing’s goals be realised.. If the segment is properly defined for a specific product or service. gender. marketers usually choose the concentrated marketing method. publicity. some companies offering expensive and highly customized products or services rely on this method. including the decision processes that precede and determine these acts. The study and . If a computer maker focused on government clients. advertising.g. After choosing a method of market segmentation. These goals are ultimately satisfied by passing through a number of problem-solving stages leading to purchase decisions. Since concentrated marketing costs less than differentiated marketing. Demonstrate how buyer behaviour affects marketing activities in different buying situations The task of marketing is to identify consumers’ needs and wants accurately. If the product line is limited. First. then to develop products and services that will satisfy them. marketers must consider the product line they are trying to sell. Consumer behaviour can be formally defined as: the acts of individuals directly involved in obtaining and using economic goods and services. for example.
which has been openly challenged in the UK over the past twenty years. the interdisciplinary importance of consumer behaviour has increased such that sociology. Employees now more frequently regard work as a means to earn the money to spend on goods or services that give them pleasure. It is important to recognise that culture. when considering culture. inspiration and advice. changing attitudes towards work and pleasure. is not fixed forever. reinforced in our daily lives through the family unit and through educational and religious institutions. for example. In the past. It is no longer accepted that work should be difficult or injurious to mind or body. for the most part. religious or linguistic differences and marketers must recognise these differences and should regard them as providing opportunities rather than posing problems. Traditionally. 2 Social and cultural influences Culture is ‘learned’ behaviour that has been passed down over time. Cultural influences. they constitute individual market segments for certain product areas. information. In most Western societies today. Subcultures can also exist within the same racial groups sharing common nationality. are powerful ones and if a company does not understand the culture in which a particular market operates. Their bases may be geographical. Increased independence and economic power have not only changed the lives of women. it cannot hope to develop products and market them successfully in that market. More recently. D and E categories moving more towards levels previously enjoyed by the higher A. An example of this is the custom of marriage. society. When couples first began to set up home together and raise families outside marriage. paid holidays and labour-saving devices in the home have all led to increased leisure time that influences how. Specific social influences Social class This is the most prominent social influence. economics and mathematics also contribute to the science relating to this subject.practice of marketing draws on a great many sources that contribute theory. and many employers make great efforts to ensure that the workplace is as pleasant an environment as possible. whereas today there is a much more relaxed attitude to those who choose to ignore the convention. realising that this probably increases productivity. in some cases. therefore. The twentieth century has witnessed significant cultural changes. Another major cultural change in this century is the changing role of women in society. one of the chief determinants of social class was income. and not just to pay for the necessities of life. and marketers must consider them because of their interactive influence on society and because. adopted an attitude of condemnation. Immigrant communities have become large enough in many countries to form a significant proportion of the population of that country. when and what the consumer buys. The shortened working week. we must also consider subcultures. Changes in culture tend to be slow and are not fully assimilated until a generation or more has passed. although immensely powerful. Since pay structures have altered a great deal in terms of the lower C2. the main input to the theory of consumer behaviour has come from psychology. B . but have also influenced society’s and women’s own perception of their socio-economic role. anthropology.
Such people are termed ‘opinion leaders’. These divisions are: 1. These younger unmarried consumers tend to be more leisureorientated and more fashion conscious. without any preconceptions or associations with inferiority or superiority in ‘lower’ or ‘higher’ social groupings. or famous personalities (who are paid for their endorsement) in the hope that other sectors of the population will follow them. Extraneous to groups influences might also be at work in opinion forming. Reference groups can range from the immediate family to the place of work. 2. but that which the consumer aspires to. In the case of a number of products. Unmarried Here. The family is perhaps the strongest reference group for most people because of its intimacy and relative permanence. Income and/or education allows young people to ‘cross’ social class barriers and adopt life styles which are different from those of their parents. Their opinions are taken up by ‘opinion followers’. They can also be found in a person’s social life.and C1 categories over the past thirty years or so. . which includes buyer behaviour. beliefs and values. When studying social class. the marketer should make decisions on the basis of information revealed by objectively designed research. Income aside. This is done by using a marketing strategy of making a company’s products acceptable to opinion leaders. although more recently different divisions have been quoted. Reference groups This can be described as group of people whose standards of conduct mould an individual’s dispositions. They will tend to absorb the influences of the group to which they aspire and gradually reject the life styles of their parents and relations. but it does suggest that even rigid independent thinkers will at least be aware of what is considered ‘normal’ within a group. a deliberate direct appeal is made to the so-called ‘snob appeal’. As consumers. classification of consumers on the basis of ‘life style’ is becoming more meaningful today. There is evidence to suggest that whatever income level a consumer reaches during his or her lifetime. This group can be small or large. It can thus be seen that occupation is a strong determinant towards an individual’s behavioural patterns. but often it is not the actual social class that is revealing. we usually identify with a particular class or group. Young newly married couples . Strong associations means that individuals within this group will influence each other. In a small group like the family the advice and opinions of those who are regarded as knowledgeable will be highly regarded. An individual is unlikely to deviate too far from the behavioural norms laid down by the members of a club or hobby group. The family life cycle traditionally contains six stages. Reference group theory does not state that individualism cannot exist within a group. social class is an indicator of life style and its existence exerts a strong influence on individual consumers and their behaviour. This segment thus comprises a very important market for many new and innovative products. This is the only way that changes in behaviour can be identified. with disposable income being high. and here there is the existence of opinion leaders who are outside of the immediate group. basic attitudes and preferences do not change radically. financial commitments and family responsibilities tend to be low.no children This group focuses its expenditure on those items considered necessary for setting up home.
Individuals are different in terms of how they look. Although they are receptive to new product ideas. In order to more fully understand this concept we shall concentrate on five psychological concepts which are recognised as being very important when attempting to understand buyer behaviour: personality and self concept This means how we think other people see us. Purchasing is low and patterns of purchasing are conservative and predictable. including major items of furniture. engage in research before determining whom to target for their marketing efforts. Older married couples still with children at home Disposable income will probably have increased.3. As individuals we might wish to create a picture of ourselves that is acceptable to our reference group. so the best policy will be through attempts to refine and add value rather than to introduce new concepts and ideas. This is communicated to the outside world by our individual behaviour. Nowadays. their feelings and their responses to marketing efforts. therefore. Such purchases are often made with different motivations to the original motivations of strict functionality and economy that was necessary at an earlier life cycle stage. This allows this group to lead more active lives and the tourist industry now actively targets this particular market segment. The individual consumer absorbs information and develops attitudes and perceptions. people also have their own individual beliefs. Such people tend to be less reliant solely on the ‘State pension’. this group sees economy as being the over-riding factor when making purchases. Older married couples with no children living in the home Here. This group of consumers is increasing rapidly. Marketers are interested in this behaviour as it relates to our purchase and consumption of goods. and how we see ourselves. are often replaced at this stage. However. 5. 4. Marketers should. The task of marketing is to identify patterns of behaviour which are predictable under given conditions. disposable income can be quite high. which is at the very base of marketing. Consumer durables. many having subscribed to occupational pensions from former employers. which boosts the State pension. Thus marketers will have difficulty when attempting to change predispositions. In marketing terms. most consumer durables have been purchased although occasional replacements will be required. Older retired couples and single people At this stage. often with both parents working and children being relatively independent. which will increase the marketer’s ability to satisfy customer needs. this will affect an individual’s needs as well as determining how to satisfy them. Young married couples with children Outlay here is children-orientated. their education. In some cases children may be working and the parents are able to engage increasingly in leisure activities often in the form of more than the ‘standard’ annual holiday. In the past the tendency was for clearer demarcations of purchasing responsibility in terms which partner was responsible for which purchases. Some will behave predictably and others less predictably according to an individual’s personality. this distinction is far less clear cut as family roles have tended to merge in terms of women taking on traditionally viewed male roles and vice versa. tastes are likely to be firmly rooted reflected in unchanging purchasing patterns. and there is little surplus cash for luxury items. Individual buyer behaviour As well as being influenced by the outside environment. It is important that we should know what these are in order that we can better understand how individuals respond to marketing efforts. 6. The sum of this behaviour is an individual self-statement and .
some motives stronger than others . Marketers are interested in motivation when it relates to purchasing behaviour. It can. ‘Self’ is influenced by social interaction and people make purchases that are consistent with their self concept in order to protect and enhance it. 3. quite often a deciding factor might be price which is of course more of an economic restriction than a motive. Motives like hunger. but as a theorist. Motives like staying alive are instinctive whilst motives like cleanliness.2. He was responsible for identifying three levels of consciousness: o o o The conscious which includes all sensations and experiences of which we are aware.is a non-verbal form of communication. and it has been termed ‘goal-related behaviour’. tidiness and proficiency are motives that are learned during life. warmth and shelter are physiological. His theories have been criticised since.4. The pre-conscious which includes the memories and thoughts which we have stored from our experiences and we can bring to mind when we wish. The constant process of re-evaluating and modifying the self concept results from a changing environment and changing personal situations. 3. The task of marketing in this context is to appeal to inner needs. Many purchase decisions are likely to reflect personality.1. success and prestige are psychological. This self image is expressed in a way which relates to our inner selves and this promotes acceptance within a group. providing products which enable them to be satisfied in a socially acceptable way. 3. This behaviour relates to the motive for wishing to possess the goods or services in question. Psychological theory suggests that we are born with instinctive desires which cannot be satisfied in a socially acceptable manner and are thus repressed. thirst. and marketers must consider personality when making marketing appeals. whilst. like approval. his theories are of fundamental value. Motivation An early thinker insofar as motivation is concerned was the psychologist. 3. at the same time.3. therefore. Others. Task 3 (AC3. Direct advertising appeals to the self image are now being made through behavioural segmentation. be seen that a number of motives might be at play when making a purchasing decision .and the final decision might be a compromise solution. For a motive to exist there must be a corresponding need. Most purchasing decisions are a composite of such motives. Personality is the principal component of the self concept. It has a strong effect upon buyer behaviour. Sigmund Freud who lived between 1856 and 1939.5) Explain how products are developed to sustain competitive advantage and how prices are set to reflect an organisation’s objectives and market conditions . We can also discern between rational and emotional motives. The unconscious that is the major driving force behind our behaviour and this includes our wishes and desires of which we are not always aware.
this is known as ‘margin’ and can be calculated by taking the cost price away from the selling price. Time Saving . your prices need to be high: This sets a standard. prices should become lower and more competitive: If your product is an innovative one. On top of this. If your profit is based on the sale price. Similarly. a company’s aim is usually not just to break even but to make a secure profit. as mentioned. These benefits can be the following: Cost Saving The members of distribution channel are specialized in what they do and perform at much lower costs than companies trying to run the entire distribution channel all by itself. and then multiplying by 100. your price should reflect this. availability etc which are directly influenced by channel members. however. you are trying to set a certain standard or attract a certain class of customer. Firstly. As more and more people begin to purchase the product. this is known as ‘mark up’ and can be calculated by taking the cost price away from the selling price. if applicable) needs to be considered so that the producer is paid fairly. a marketer too while choosing his distribution members must access what value is this member adding to the product. the amount of time that it takes to make a product (and thus the hourly rate of the person who has made it. you still need to continue making a profit. and then multiplying by 100. However. dividing this number by the cost price. ‘geeks’ or early adopters will be drawn in despite or even because of the high price tag. dividing this number by the selling price. Plus. Deciding how much needs to be charged in order to achieve this is likely to be decided on the basis of previous patterns and future projections rather than being decided arbitrarily and will vary depending on the organisation’s size and output. and you need to be able to compete with them. and for technology companies in particular. your product and company ideals should not be compromised: If. The cost of materials also needs to be taken into account so that the business does not lose money. continuing to draw in new customers at the same time.Several aspects of business and marketing dictate how prices need to be set in order for a company or retailer to be successful and reflect their objectives. other similar products may soon begin to appear on the market. Explain how distribution is arranged to provide customer convenience Illustrate how promotional activity is integrated to achieve marketing objectives Analyse the additional elements of the extended marketing mix Advantages of a Distribution Channel When a customer is considering buying a product he tries to access its value by looking at various factors which surround it. He must compare the benefits received to the amount paid for using the services of this intermediary. when starting out with a new product as an unestablished or unfamiliar company. Factors like its delivery. Ideally. If your profit is based on the cost price.
Along with costs. The customers therefore have the benefit of buying in smaller quantities and they also get a share of the profit the retailer makes when he buys in bulk from the supplier. For example if a grocery store were to receive direct delivery of goods from every manufacturer the result would have been a chaos. This phenomenon of breaking bulk quantities and selling them in smaller quantities is known as bulk breaking. buy using a payment plan etc. which means they purchase from many suppliers the various goods that a customer may demand. Customers receive financial support Resellers offer financial programs to their customers which makes payment easier for the customer. Secondly. Everyday hundreds of trucks would line up outside the store to deliver products. Thus channel distribution provides accumulating and assorting services. This is more cost effective than buying in small quantities. Customers can buy on credit. The grocery store now receives deliveries from the wholesaler in amounts required and at a suitable time and often in a single truck. If a grocery wholesaler is included in the distribution chain then the problem is almost solved. Customer Convenience Including members in the distribution chain provides customer with a lot of convenience in their shopping. Resellers help in boosting sales Resellers often use persuasive techniques to persuade customers into buying a product thereby increasing sales for that product. This wholesaler will have a warehouse where he can store bulk shipments. The store may not have enough space for storing all their products and this would add to the chaos. If every manufacturer owned its own grocery store then customers would have to visit multiple grocery stores to complete their shopping list. In this way cost as well as time is saved. time of delivery is also reduced due to efficiency and experience of the channel members. They often make use of various promotional offers and special product displays to entice customers into buying certain products. channel distribution is time saving as the customers can find all that they need in one retail store and the retailer Customers can buy in small quantities Retailers buy in bulk quantities from the manufacturer or wholesaler. Resellers provide valuable information . This would be extremely time-consuming as well as taxing for the customer. However they resell in smaller quantities to their customers.
4. Highlevel channel members often provide sales data. . The manufacturer could have sold at this final price and made a greater profit if he had been managing the distribution all by himself. Therefore the manufacturer goes for a loss in revenue. The marketer may provide training to the salespersons of retail outlets but on the whole he has no control on the final message conveyed.Manufacturers who include resellers for selling their products rely on them to provide information which will help in improving the product or in increasing its sale. the price which should be charged. Task 4 (AC4. In various cases like transportation delays the product loses its importance in the channel and the sales suffer. its image (the way it is promoted) and. its availability (the place where and when it is available. He might exaggerate about the benefits of the product this may lead to miscommunication problems with end users. The reseller may engage in personal selling in order to increase the product sale and communicate about the product to his customers. of course. On all other occasions the manufacturer can always rely on the reseller to provide him with customer feedback. 4. delivered or distributed). These include the product or service itself (its advantages). for instance shipping costs or as in the case of retailers by selling the product at costs higher than the price at which the product was bought from the manufacturer (also known as markup). Loss of Communication Control Along with loss over the revenue the manufacturer also loses control over what message is being conveyed to the final customers.3) Describe how you would plan marketing mixes for two different segments in consumer markets Illustrate differences in marketing products and services to businesses rather than consumers The mix is a bundle of variables which are offered to the customer. The intermediaries would never offer their services to the manufacturer unless they made a profit out of selling his products.2. Loss of Product Importance The importance given to a manufacturer’s product by the members of the distribution channel is not under the manufacturer’s control.1. Disadvantages of including intermediaries in the distribution channel Revenue loss The manufacturer sells his product to the intermediaries at costs lower than the price at which these middlemen sell to the final customers. Similarly a competitor’s product may enjoy greater importance as the channel members might be getting a higher promotional incentive. They are either made a direct payment by the manufacturer.
packaging. Place is sometimes referred to as the marketing channels. the functions. Here is Professor Philip Kotler: "For example. however. logistics or location.this means the product's (or service's) quality. exhibitions. Can you recall them? In addition to the 4 Ps. So there is a lot of localisation. The biggest mistake companies make often. You can explore some other approaches in the subtopic called 'Different Approaches'. He suggests that the 4 Ps are a seller's mix or sales orientated approach and it therefore should be replaced by the 4 Cs which are more customer orientated. is just one approach to the marketing mix. distributor's trade prices. the features and benefits of its design plus packaging. . Philip Kotler prefers the 4 Cs. there are other approaches to the mix. The 4 Ps. Choices can be made about any of these aspects. is to assume that the way they sell a product in their own country is the way to put it into another country. cash discounts. This mix includes advertising. Different Approaches The 4 Ps is just one approach to the marketing mix. physical distribution. selling and even word-of-mouth. Since then marketing managers around the world have become familiar with them. terms of credit. bulk discounts. What is the best mix? A marketing manager has to juggle resources and decide on the best marketing mix. not a package. American author. direct mail. The choice of target market affects the mix. Should money be spent or forfeited on: reduced prices? Improved products? New delivery trucks? Or maybe invest all your money in a high risk TV advertising campaign? Did you recognise the 4 Ps just there? In 1960 Jerome McCarthey presented the 4 Ps to the world. sales promotions. Promotion means the promotions mix or the communications mix." Philip Kotler So the mix must adapt itself to the market.These are some of the ingredients which a marketing manager must mix together when optimising a limited amount of resources. There are many other approaches. publicity. Place means where and when the customer buys and consumes the product or service. in India you sell one cigarette at a time. Price includes recommended prices to end-user customers. These are explored under 'Different Approaches' subtopic as shown in the title map. Product . guarantees and level of after-sales service. display. or marketing orientated. Let's look at each of the 4 Ps briefly.
prices slashed. People are employees. Although the 4 Ps can be used for both products and services some feel that the 4 Ps works better for products than it does for services. Four of the 7 Ps are the same. Service. can you guess what the others might be? People.. Brand and Price. There are also several different ways of mixing the mix. Should advertising be increased. Perhaps you agree? American. perfect marketing mix. Some mixes are... The 'same' product can have extremely different mixes for different markets around the world. What do you think is the centre of the marketing universe? The 5th P is the People: customers and employees. however. single. Product. In 1961 Albert Frey suggested that all the marketing mix variables could be categorised into just two groups: The Offering and the Methods and Tools The Offering consisted of Product. Advertising and Sales Promotion.. So there are several different ways of categorising the mix. Process means the production and delivery of the service. Mixing the Mix There is no one.You can probably guess what the 4 Cs stand for. Packaging. some feel this approach to the marketing mix misses the most important part of marketing. Customers are at the centre of the marketing universe. Product = Customer Benefits Price = Cost to Customer Place = Convenience Promotion = Communications Going back to the 4 Ps. better than others. while the Methods and Tools comprised of Distribution Channels. Now lets move on to the 7 Ps. academics Booms & Bitner felt that the 7 Ps are more appropriate for the service sector such as hotels or transport companies. . Each of these Ps affects what the customer is offered. Process and Physical environment. Personal Selling. Physical Environment means the interior and exterior of the buildings.. Place and Promotion. Price.. deliveries reduced and products upgraded? Or the other way around? You can explore this in the section called 'Mixing the Mix'. the centre of the marketing universe is omitted. The marketing mix has an infinite amount of combinations or mixes.
promotional strategies can all be mixed in different ways. It can have lots of extras such as diamond studded leather straps. a high price for low quality goods does not make sense in the long term. These are decisions which the marketing manager has to make after careful analysis of the situation. its needs. On the other hand.just the basic video watch. She has asked you to help her to draw up an outline marketing mix.Ranges of prices. fit together to consolidate a single desired positioning in a particular market segment.00 per unit. guarantees and so on. This time change the marketing mix radically. it can have no added costs and no added extras . distribution options. So is there a single. . silk wrapping. Reduce the price and sell in packs of two through discount warehouses supported by a national TV advertising campaign. Mix the mix. Now consider another option. For example. What would you do? The first question to ask would be: 'what is the market?' What benefits does this product deliver? Who might enjoy these benefits? Next. They should however. One option would be to recommend a retail price for the video phone watch at £1. the market. the resources within the company. An understanding of what resources the company has would be vital. And a clear view on the positioning also helps. Market it. A combination of miniaturisation and micro chips means the video watch can be produced for as little as £2. considering various segments and possible target markets would also help. A friend's mother has developed a watch which has a videophone and magnifying glass for viewing. promoting it with elaborate in-store displays (merchandising) supported with a limited mail shot and PR campaign. Equally. the ideal positioning. Each ingredient in the mix can vary enormously. low quality. It can have a lifetime guarantee or become a disposable product. but some mixes are obviously better than others. the watch can be made out of plastic or platinum. Repeat business is important in the world of marketing. discount priced products will find distribution in a luxury up-market store difficult to achieve. Consider two different mixes. This could be distributed through luxury stores like Harrods or Neiman and Marcus. product modifications. Here is a new product. its sectors. The mix should not pull in different directions.000. perfect marketing mix? No.
The ideal mix should support the ideal positioning in the most attractive target markets. The Ever Changing Mix An excellent marketing mix in one period may not be as effective in another period. reliability were very important. or where the price structure is totally different. levels of competition and the ability. These sales promotions were supported by large advertising budgets. attitudes change. scratch cards. This was followed by the mid 1980s sales promotions war as petrol retailers competed to give away instant gifts. or willingness. Ten years ago this would never have been the case. Here is an example of how different elements of the marketing mix dominated the retail petrol market in the UK over a period of time. Today's PCs are better products.miles per gallon. the target market selection. new products arrive. So now the advertising promoted the sales promotions rather than the product itself. The ever-changing mix is discussed in a separate subtopic. Partly because markets change. The marketing mix can change over time. thousands of people buy PCs through mail order. Physical distribution and sourcing of supplies became vital during the first oil crisis in 1973.Finally. Some segments require different mixes within the same country. Just look at the personal computer. Some advertising campaigns even advertised the fact that their competitors had inferior sales promotions. trends develop. The optimum mix is influenced by the company's long term policy on repeat sales. The mix can change according to market requirements which in themselves change over time. technology moves on. This was followed by a price war in 1974. have much lower prices and different methods of distribution compared with ten years ago. to change the mix according to a particular market's requirements. Today. Product and the Marketing Mix . or PC. The marketing mix changes over time. In the early 1960s Product Performance . market. The early '80s saw location and design of new retail sites as the key to competitive advantage. It can also change over distance. some countries require different mixes. This is particularly true in international markets where certain approaches to advertising and promotions are acceptable in some countries but not in others. the firm's resources. Then the marketing emphasis switched to promotions with the Green Shield Stamps war in the late 1960s. different distribution channels appear. The Marketing Mix has to change to meet new market conditions. different ideal positionings emerge. tokens. new sectors evolve. its positioning strategy. or where the distribution network is restricted. which was in turn followed by supply and distribution problems during the second oil crisis in 1979.
fully integrated mix even the best product in the world will fail. The better mousetrap also needs to be part of a coherent. though he builds his house in the woods the world will make a beaten path to his door. Each element of the marketing mix should support the product's positioning. Finally. Many excellent products fail because no one knows about them.. promotion and distribution need to work together if a product is to be successful. its distribution channels and of course the promotion should all reinforce the same message.com/small/Mail-Op/Marketing. or they're too expensive for the chosen target market. For example. It happens all the time. type. ironically the best product is not always the best option. Speed to market. fully integrated marketing mix. or make a better mousetrap than his neighbour. Better mousetraps are often beaten by poorer mousetraps. the product might be so good that it costs too much to produce and therefore the best product might just put you out of business. Philip Kotler prefers the 4 Cs http://www. powerful promotions. cost." This is certainly not true today. clever pricing strategies. or they are wrongly positioned.php?query . preach a better sermon. are all used by competitors to win and keep market share. Competitors constantly juggle their marketing mixes to maximise their product sales. the final combination of the core product.it needs to be promoted in the right way. benefits. The prices have to reflect the desired quality image while simultaneously matchingwhat customers can afford.referenceforbusiness.advantage. tangible product and augmented product along with price. its price.Over a hundred years ago Ralph Waldo Emerson suggested that "If a man can write a better book. Macro-marketing and micro-marketing http://www. Without a coherent.html#ixzz1rdXeJOHZ American author. or they're not available when people want them. Do customers really want that extra feature? Can you afford it? Can they afford it? Can competition copy it? Whatever the decision. customers need to know about the product . The product. References Marketing .multimediamarketing. The distribution has to get the product to where the target customer can buy it when they want it. Going back to the Emerson's better mousetrap.com/search_results. blocked distribution channels. Other excellent products fail because a competitor's lower priced and inferior product is widely available before you even get to launch your product on the market place.com/mkc/marketingmix/ http://www.antiessays.