THE MARKETING MIX – (THE 4Ps) of the marketing

process
The marketing mix ensures that the business:
 Develops the right product

 At the right price for the target market

 And reaches consumers in the right place at the right time

 Using the right promotions

PRODUCT, PRICE, PLACE AND PROMOTION ARE THE
FOCUS OR 4 MAIN ELEMENTS OF THE MARKETING
MIX OF ANY BUSINESS ORGANISATION
 ELEMENTS OF THE MARKETING MIX
1. PRODUCT - Once market research has identified the preferences
of your target market, the firm can start designing and developing
products and product features to appeal to the target market.
 Product refers to a good or service that the firm sells
( tangible and intangible products).
 Developing a product includes:
Product design, features, incorporated technologies, colours, and
tastes and smell if relevant.
The Product Life Cycle – this shows the stages through which
a product develops over time.
The stages are based on the level of sales:
It is important that a firm understands the stage of the product life
cycle that its product is in.
 The firm will be able to successfully create a strategy to market the
product and ensure it stays relevant as customers’ preferences and
technologies change.
 Product life cycle may be short, such as for fads or fashion trends.
 Product life cycle may be longer if the product is updated and
modified over time to extend the life cycle, and therefore
profitability.
2. PRICE - Setting the right price is important .
The following factors affect the pricing decision or strategy used by a
business:
 The average cost of producing each product unit
 Consumer demand and their willingness and ability to pay for it
 The degree of competition in the market
 The number of close substitutes to the product
 The stage in the product’s life cycle
PRICING STRATEGIES USED BY A BUSINESS:

 Cost plus pricing- The business adds a mark-up to the cost of

producing the product.
 Penetration pricing – Setting the price low initially, to encourage
consumers to try a new product, in order to build sales and
product loyalty.

 Once the product is established and sales are increasing, the

business may increase its prices.
 Price Skimming - Setting a high price initially.

 It is used for innovative/high quality products where there is little

or no competition
 High profit margin earned before competitors enter market
 Eventually prices may be reduced
Example: a firm introducing a new type of television
 Psychological pricing - Consumers often use the price of a
product as an indicator of its value and quality.
Examples:
 consumers expect to pay a high price for designer clothes and items
marketed as luxury or high-end brands
 Price-ending numbers for low-cost purchases – consumers are
more likely to buy a product priced at say $19.99 than they would
if it was priced at $20.
 Loss leader pricing - A ‘loss leader’ is a popular product that is
priced below its cost of production in order to encourage
consumers into shops or retail outlets to view and hopefully buy
other more profitable products that are also on display.

Example: A supermarket may use a popular range of biscuits as a

loss leader. People are attracted into the supermarket by their low
prices and will usually buy other items while shopping there.
 Competition-based pricing – Firms can set prices at or below the
prices of rival products.

 Going rate pricing – Setting a price equal to the prevailing market

price or ‘going rate’ for very similar or identical products.
Example: the market prices of many minerals, oils, crops and cereals
are determined through international trade between many consumers
and producers all over the world.
 Price discrimination – The business charges different prices to
different groups of people for the same product.

Example: cinemas usually charge a lower price for children’s tickets

than for adult’s tickets.
3. PLACE - After developing a product and deciding on the
right pricing strategy to use, the firm must then get its
products to consumers.
 The product must be in the right place at the right time for
consumers.
Firms must choose:
 Channels of distribution and places of sale such as supermarkets
and department stores, market stalls or online.
4. PROMOTION – Marketing communication designed to
influence consumer behavior and their spending decisions.

 Making consumers aware of your product

 Its brand name and features
 Where it is sold
 The price it sells for
 The aim of promotions is to create consumer wants for a product so
as to generate sales and profits.
JANUARY 2016 – QUESTION 4

(a) (i) Define the term ‘marketing’. (2 marks)

(ii) List the FOUR elements of the ‘marketing mix’. (4 marks)
(b) (i) State TWO reasons why firms engage in public relations (PR). (2 marks)
(ii) Describe THREE marketing methods, other than social media, employed by businesses to
promote sales. (6 marks)
(c) Explain TWO ways in which businesses can use social media to promote sales.
(6 marks)
PLEASE NOTE:
YOU ARE REQUIRED TO ATTEMPT THIS QUESTION IN YOUR NOTEBOOK.