M8 L1 Four P's of Marketing Mix


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M8 L1 Four P's of Marketing Mix

  1. 1. MARKETING MIX The combination of marketing components that will maximize customer satisfaction and ensure PROFITS
  2. 2. The components of the MARKETING MIX <ul><li>THE FOUR P’S </li></ul><ul><li>PRODUCT </li></ul><ul><li>PRICE </li></ul><ul><li>PLACE </li></ul><ul><li>PROMOTION </li></ul>
  3. 3. PRODUCT <ul><li>The goods and services a business will offer to its customers </li></ul><ul><li>Choice of product </li></ul><ul><li>Packaging </li></ul><ul><li>Services to support product </li></ul><ul><li>Branding </li></ul><ul><li>Positioning </li></ul><ul><li>Quality </li></ul><ul><li>Business image </li></ul>
  4. 4. PRODUCT <ul><li>What product/service will you provide? </li></ul><ul><li>What choice of product/service will you make available to customers? </li></ul><ul><li>How will you package or display your product? </li></ul><ul><li>Will you provide additional services such as repair with your product? </li></ul><ul><li>Should you offer “national brand” products or “private brand” products? </li></ul><ul><li>What warranties or guarantees can a customer be assured of when purchasing your product/service? </li></ul><ul><li>What level of quality do you plan to offer with your product/service? </li></ul><ul><li>How do you want customers to view your business? </li></ul><ul><li>How much research and development will be needed to stay competitive? </li></ul><ul><li>How do you want your business to compare to the competition? </li></ul>
  5. 5. Product-- Choice and Packaging <ul><li>Choice of products for your business </li></ul><ul><ul><li>Product consistency is vital. </li></ul></ul><ul><ul><li>Do all of the products/services “fit together?” </li></ul></ul><ul><li>Packaging your products </li></ul><ul><ul><li>Packaging choices affect the appearance and appeal of the product. </li></ul></ul><ul><ul><li>Packaging impacts the display and storage of the product. </li></ul></ul>
  6. 6. Product-- Services <ul><li>Do you provide services to support the products: </li></ul><ul><ul><li>Some products such as computers, appliances, vehicles, and many other “technical” products require special services to maintain customer satisfaction. </li></ul></ul><ul><ul><li>Do you provide repair services for your product or just sell the product? </li></ul></ul>
  7. 7. Product-- Branding <ul><li>Branding </li></ul><ul><ul><li>National brands offer an established reputation and the manufacturer provides extensive promotion. </li></ul></ul><ul><ul><ul><li>But are they worth the cost? </li></ul></ul></ul><ul><ul><li>Private brands are sometimes difficult to establish and expensive to promote but yield higher profit margins for the seller and help promote customer loyalty. </li></ul></ul><ul><ul><ul><li>How will I convince customers they are just as good as national brands? </li></ul></ul></ul>
  8. 8. Product-- Warranties <ul><li>Warranties </li></ul><ul><ul><li>Assurance by the seller that the product is as it is represented to be or that it will be as it is promised to be. </li></ul></ul><ul><ul><ul><li>A certain level of performance is expected from all products; however, some products may not meet customer expectations. </li></ul></ul></ul><ul><ul><ul><li>What steps will the business take to “back up” the products and ensure customer satisfaction? </li></ul></ul></ul><ul><ul><ul><li>Customer satisfaction is important for return customers. </li></ul></ul></ul>
  9. 9. Product-- Quality <ul><li>Level of quality of the products or the business relates to customer’s perception of product value. </li></ul><ul><ul><li>If the customer perceives higher quality, a higher price will be accepted. </li></ul></ul><ul><ul><li>Interpretation of customer perceptions must be accurate to succeed with higher prices. </li></ul></ul>
  10. 10. Product— Business Image <ul><li>Business image is the mental picture customers have of the business. </li></ul><ul><li>How do you want customers to “view” your business? </li></ul><ul><ul><li>Discount (Wal-Mart): Image is built on “low prices everyday.” </li></ul></ul><ul><ul><li>Popular-priced (Target, Marshall’s): Image is built on the concept of quality designer brand merchandise at lower prices. </li></ul></ul><ul><ul><li>Exclusive (Nordstrom’s): Image is built on the superiority of the products carried by the business. </li></ul></ul><ul><ul><li>Specialty (Victoria’s Secret): Image is built on the single brand or single type of merchandise carried. </li></ul></ul>
  11. 11. Product— Research and Development <ul><li>Product research and development is necessary in order to remain competitive. </li></ul><ul><li>An organization must consistently strive to improve products and services for customers and to keep up with trends, technology and customer spending patterns. </li></ul>
  12. 12. Product— Positioning <ul><li>Positioning of a business is the perceived standing of a business or its product in the minds of its customers as compared to the competition. </li></ul><ul><li>This perception will help the customers decide where to spend their money. </li></ul>
  13. 13. PRICE The amount of money a business charges customers for its goods and services
  14. 14. PRICE---Setting the Price <ul><li>Price setting : What are the pricing goals? </li></ul><ul><ul><li>Price below the competition? </li></ul></ul><ul><ul><li>or </li></ul></ul><ul><ul><li>Ensure a 15% (or some other established rate) profit? </li></ul></ul><ul><ul><li>or </li></ul></ul><ul><ul><li>Just break even? </li></ul></ul>
  15. 15. Price---Terms of Sale <ul><li>Terms of a sales are the conditions of purchase and payment, which are sometimes negotiated between suppliers and buyers. These will affect the price charged. </li></ul><ul><ul><li>When does the bill have to be paid in full? </li></ul></ul><ul><ul><li>Who will pay shipping charges? (This is a important issue with online sales.) </li></ul></ul>
  16. 16. Price---Discounts <ul><li>Discounts are reductions in the price of goods, which are negotiated in some situations. </li></ul><ul><ul><li>Seasonal discounts are given for buying products during the off-season. </li></ul></ul><ul><ul><li>Quantity discounts are for buying in large quantities. </li></ul></ul><ul><ul><li>Cash discounts may be allowed for paying the bill early. </li></ul></ul>
  17. 17. PLACE Considerations in getting the product or service in the right location at the right time
  18. 18. Place---Channels of Distribution <ul><li>Channels of distribution from the manufacturer to the customer </li></ul><ul><ul><li>The usual channel of distribution goes from manufacturer to wholesaler to retailer </li></ul></ul><ul><ul><li>How will your product get from the manufacturer to your customer? </li></ul></ul>From manufacturer To Wholesaler To Retail Store
  19. 19. Place---Exclusive Rights <ul><li>Specific stores </li></ul><ul><ul><li>Is this product sold anywhere else? Do you need to sell snow shoes in Atlanta, Georgia. </li></ul></ul><ul><li>Does this business have exclusive rights to distribute the product? </li></ul><ul><ul><li>Some products, like Yankee Candles and Snow Babies, require retailers to sign a licensing agreement to distribute these items. </li></ul></ul><ul><ul><li>You must abide by the guidelines of the distributor as to placement and putting their items on sale. </li></ul></ul><ul><ul><li>If you do not adhere to the specified guidelines, you will lose your licensing agreement. </li></ul></ul>
  20. 20. Place---Transportation <ul><li>Transportation </li></ul><ul><ul><li>What carrier will be chosen to move the products? </li></ul></ul><ul><ul><li>Remember, the more people that touch the product between the manufacturer and the consumer, the higher the cost of the product will be to the final customer. </li></ul></ul><ul><ul><ul><li>Common carrier: Provides transportation services for any business in its operating area for a fee. Examples include: </li></ul></ul></ul><ul><ul><ul><ul><li>UPS </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Federal Express </li></ul></ul></ul></ul><ul><ul><ul><ul><li>DHL </li></ul></ul></ul></ul>
  21. 21. Place---Transportation <ul><li>Transportation </li></ul><ul><ul><ul><li>Contract carrier: For-hire carriers that provide equipment and drivers for specific routes according to contracts between the carrier and the shipper. Examples include: </li></ul></ul></ul><ul><ul><ul><ul><li>AA Cargo (airline) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>DHX (airline in Hawaii) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>CSX Railroad Transportation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Norfolk Southern (NS) Railroad </li></ul></ul></ul></ul><ul><ul><ul><li>Private carrier: Transports goods for an individual business. Equipment can be purchased or leased to meet the specific transportation needs of the business. </li></ul></ul></ul><ul><ul><ul><ul><li>BlueMax Trucking </li></ul></ul></ul></ul>
  22. 22. PROMOTION The various forms of communication that marketers use to INFORM, PERSUADE, and REMIND customers of their product or service
  23. 23. Promotion--- Types of Promotion <ul><li>Advertising - Non-personal promotional messages paid for by an identified sponsor. </li></ul><ul><li>Personal Selling - Communication between a salesperson and a customer intended to influence the customer’s buying decision. </li></ul><ul><li>Publicity - Information about a business or its products distributed through the media at no cost to the business. </li></ul>
  24. 24. Promotion--- Types of Promotion <ul><li>Sales Promotion - All promotional activities other than advertising, personal selling, publicity, and public relations designed to stimulate sales and sales effectiveness. </li></ul>
  25. 25. Promotion <ul><li>As a new business owner, you must use a combination of these types promotion types in order to reach your customers giving consideration to the following: </li></ul><ul><ul><li>How many people will you reach with each type? </li></ul></ul><ul><ul><ul><li>Do more people watch television ads or read the newspaper? </li></ul></ul></ul><ul><ul><ul><li>Which magazine would reach the largest number of potential customers? </li></ul></ul></ul><ul><ul><li>What is the cost of each type of promotion? </li></ul></ul><ul><ul><ul><li>What is the cost of a newspaper ad? </li></ul></ul></ul><ul><ul><ul><li>Which time slot is the cheapest and yet still reaches a large audience on television or radio? </li></ul></ul></ul><ul><ul><li>What will give you the best return on your promotional investment? </li></ul></ul><ul><ul><ul><li>The bottom line is where can you promote your business to reach the most customers for the best price? </li></ul></ul></ul>
  26. 26. Review of the FOUR P’S of the Marketing Mix <ul><li>PRODUCT - The goods and services a business will offer to its customers </li></ul><ul><li>PRICE - The amount of money a business charges customers for its goods and services </li></ul><ul><li>PLACE - Considerations in getting the product or service in the right location at the right time </li></ul><ul><li>PROMOTION - The various forms of communication that marketers use to inform, persuade and remind customers of their product or service </li></ul>