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Combining the marketing mix by Maxwell Ranasinghe
 

Combining the marketing mix by Maxwell Ranasinghe

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Maxwell Ranasinghe

Maxwell Ranasinghe

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    Combining the marketing mix by Maxwell Ranasinghe Combining the marketing mix by Maxwell Ranasinghe Presentation Transcript

    • Combining the Marketing Mix
      • Product Life Cycle and the Marketing Mix
      • Marketing Mix Decisions for Consumer and Industrial services
    •  
    • Introductory stage of the PLC and the MM
      • Product
      • New to the market.
      • Quality problems may occur
      • Risk is high
      • Product mix may go through few modifications
      • Place
      • Distribution is limited
      • Channels have to be motivated to carry the product
      • May have problems in getting shelf space
      • Lot of personal selling to be done at the level of channels
      • Price
      • Pricing strategy may differ from Skimming to penetrative depending on the nature of the product and the status of the product/brand
      • Promotion
      • Lot of advertising and public relation activities will be done to make the market aware of and arouse interest for the product
    • Growth Stage of PLC and MM
      • Rapid climb in sales
      • Rising sales are linked to increasing profitability
      • Competitors will enter
      • Demand increases
      • Product
      • Product is accepted in the market
      • Product quality would improve with changes according to the consumers requirements
      • New models will be introduced to face the me too products
      • Acceptance and reliability of the product would increase the demand
      • Product will face struggle to retain distinctiveness
    • Growth stage….
      • Place
      • Many customers now go to fewer shops than in the past for their daily requirements of FMCGS
      • Establishing good dealerships and having the product in leading distributors is very important at this stage
    • Growth stage….
      • Price
      • Price may not change initially
      • At latter part price may be reduced slightly to face the competition
      • Profit per unit would increase due to the spread of expenses
      • Most players will earn good profits
    • Growth stage…
      • Promotion
      • The promo activities would be directed at brand building rather than making awareness
      • Promo cost per unit would be less as with the increasing volume of sales.
      • Early stages of an promo war could be seen with the arrival of major competitors
    • Maturity stage
      • Maturity stage is the longest stage. Many marketers will dwell more of their time in marketing a product in the maturity stage
      • Competition is high
      • Sales growth has become slow
      • Consumers know about the product
      • Technology is widespread
      • Many manufactures
      • Many distributors
      • Customers may start switching the other products at the latter part of this stage
      • A sales decline would experience
      • Overcapacity in the industry
      • Few giant firms may start dominating and weaker may exit earlier
    • Maturity stage….
      • Product
      • Product modification
      • New users of the same product, offer new value to consumers
      • Abandoning weaker products and keeping only the strong ones
      • More effort on R&D on products
    • Maturity stage….
      • Price
      • Price begin to fall
      • Low cost approach to e competitive
      • Downsizing and up grading plant to reduce cost
      • Offering basic product without extras
      • Cheaper technology and raw materials used
      • Innovative production process
    • Maturity stage….
      • Place
      • Low cost channels of distribution is sought
      • The battle for supermarket shelf space
      • More incentives offered to channels
    • Maturity stage…..
      • Promotion
      • Advertising may be directed to strengthening the existing customer base and getting new customers
      • May be directed to use frequently or to show wider variety of usage.
      • Directed at stimulating trail in non users
      • Sales promotions
      • Tie ins with many other products or services
      • Multipack purchase benefits/ complimentary products
    • Declining stage of PLC and MM
      • Shifts in consumer taste, demographic factors, increased competition or technological obsolesce may decrease the demand.
      • The decline may be slow as in the sewing machine or rapid as in the floppy disk or video tapes
      • Weaker will exit if exit barriers are low
    • Declining stage….
      • Three important factors determining the attractiveness of the declining markets
      • Demand
      • Competition/ rivalry
      • Exit Barriers
    • Five options are available for a firm in a declining stage of the market.
      • Exit - selling the business in the early stage of decline
      • Harvesting - Maximising short term cash flow, maintain or increase margins even if it could result in quicker decrease in the market share
      • Maintenance- This is a short term strategy to maintain market share even at the cost of declining margins
      • Profitable survivor- This aims to increase the share of a declining market with a view to future gains
      • Niche - Identify a small segment and concentrate activity in that area
    • MM at declining stage…
      • Product
      • Harvesting- R&D expenditure is eliminated. No new products or extensions or modifications developed.
      • Maintenance- Product and process expenditures are maintained for the short term
      • Profitable survivor- Product and process expenditures are maintained for the short term as part of strategy of pursuing increased market share
      • Niche - Continues product and process R&D aiming at [product improvements or modifications to appeal to a specific segment of the market that has not been served properly
    • MM at declining stage…
      • Price
      • Harvesting- Cost cutting across the board. Price may be raised to maintain margins
      • Maintenance- Lower prices, if necessary to maintain market share
      • Profitable survivor- Lower prices as appropriate to increase market share even with much lower margins
      • Niche- Price depends on the nature of the special segment targeted.
    • MM at declining stage…
      • Promotion
      • Harvesting- Sales and Marketing budgets are slashed.
      • Maintenance- Advertising, sales promotions and trade promotions are sustained at a level sufficient to prevent any erosion of the market share.
      • Profitable survivor- A signal is sent out to the competitors that the firm is going to remain in the market and will increase the market share. Advertising and Promotions are increased. Strong trade promos are done to strengthen the channels
      • Niche- Advertising and Promotions are concentrated at the selected market with much care .
      • Marketing Mix decisions for Consumer, Industrial & Service Products
    • Products Consumer Industrial Convenience shopping Speciality Unsought Staple Impulse Emergency Materials and parts Capital Items Supplies & services Raw Materials Manufactured Materials Installations accessories Supplies Business services
    • Convenience goods Product Price Place Promotion Products needed to be branded. Branded products can get brand loyalty. Price is not a major criterion but over pricing will loose the market Convenience is very crucial. Intensive distribution strategy followed Advertising and sales promotion plays a very big role Shopping Goods Quality, features and benefits, after sales service are important Prices tend to be high . Hire purchase, credit schemes will trigger sales Consumers will be willing to spend more time and energy in searching the product Personal selling may be good promo tool. Advertising also may help to make awareness. POSM s also plays a role
    • Specialty Goods Product Highly brand conscious. Refuse any other brand. Quality high Price Market skimming . High price will meet the expectation of the consumer as he seeks high quality Place Willing to do extensive search and refuse alternatives. Exclusive distribution will add to the image Promotion Mass promo may not suit. Adds to be placed in selected exclusive mediums. Personal selling professionals Unsought Goods Product Customers are reluctant to purchase. Benefits presented should be superior to perceived cost Price Price incentives are required to stimulate purchase Place Selective as the frequency is very high Promotion Hard selling, heavy promos, Personal selling, referral selling
    • Industrial Goods and MM
      • Product
      • Hardly any emotional appeal
      • Product purchased for functional benefit
      • After sales and Warranty very important
      • Packaging bulk purely to protect the product
      • Price
      • High value
      • Credit
      • Lease hire purchase
      • Place
      • Located in specific places where industrial customers are concentrated
      • Not many intermediaries
      • Specially appointed sales persons
      • Promotions
      • Direct marketing
      • Personal Selling
      • Hardly any advertising
      • Promote loyalty
    • Services and marketing mix
      • Services
      • Unique features
      • Intangibility
      • Inseparability
      • Variability
      • Perishability
      • Marketing Mix is extended to 7 ps by adding people, process and physical evidence to the traditional 4 ps.