Pearson Edexcel IAS Level Business

1. MARKETING MIX

2. Content
2
1. Product/ Service Design
2. Promotion and Branding
3. Pricing Strategies
4. Distribution

3. Product/
Service Design
1

4. “
The process of creating a new product
or service is called product design. It
involves the generation and
development of ideas through a
process that leads to new
products/services.
4

5. Example
When designing the new travel iron they may
take into consideration:
1. The shape and appearance of the iron
2. Whether its fit the intended need
3. How easily and cost effectively it can be
produced from the design
4. The dimensions and preferred materials
to be used
5. The image it gives when displayed
6. Corporate identity
5

6. Function
1. Does it do what
supposed to do?
2. Extra features?
3. USP > Rival
product?
Design Mix
Aesthetic
1. Appearance of
product
2. Includes
packaging
3. Does it fit the
segment
6
Cost
1. Do the economics make
sense?
2. Compare intended price vs
variable cost per unit

7. Design Mix & Social Trends
7
Design for Waste Minimisation
● Design product that more
durable and last a lifetime
● Design smaller and lighter
● Design could be
discouraged from
designing single use
Design for re-use
● Design packaging which
can be re-used.
● Component of product
easily re-used.
● Use recycled materials
● Use waste discarded by
other businesses in their
designs
Design for recycling
Business only use materials,
components, and services from
suppliers that respect the
environment, trade with honesty,
treat their workforce well
Ethical Sourcing

8. Promotion and
Branding
2

9. Above the line promotion
● Informative advertising
● Persuasive advertising
● Reassuring advertising
9

10. Below the line promotion
10
DIRECT SELLING
EXHIBITIONS
SALES PROMOTION
MERCHANDISING & PACKAGING
PUBLIC RELATIONS
DIRECT MAILING
Free gifts, Coupons, Loyalty cards, Competitions,
BOGOF offers, Money-off deals
Press release, press conference, Sponsorship,
Donations
Product layout, display material, Stock
Businesses mail out leaflets or letters to
households
selling products directly to consumers in a
non-retail environment.
Business attend trade fairs to promote their
products and services

11. Choosing Methods
of promotion
11
Cost Market Type Product Type Competitors
promotion
Stage in the product
life cycle

12. Ways to build a brand
12
1. Exploiting Unique
Selling Point (USP)
2. Advertising
3. Sponsorship
4. Using Social Media
5. Emotional branding

13. Pricing
Strategies
3

14. Pricing
Cost Plus Pricing
Adding a markup to total cost
Penetration Pricing
Competitive Pricing
Pricing strategies based on
the price charged by rivals,
ex: Grab, Gojek, Traveloka
Skimming
Setting a high price initially
and the lowering it late
Setting a low price to start with in
order to get established in the
market, price may be raised once
established
Psychological Pricing
Set the price slightly below a
round figure, charging
$ 999,99 instead of $100
Predatory Pricing
This practice is illegal, because it
can lead to a lack of competition
in the future

15. Price consideration
Differentiation and USP
A business can generally charge a
higher price if its product has a USP or
is sufficiently differentiated from those
of its rivals
Price elasticity of demand
If the demand for a firm’s products is
price inelastic, there will be scope for
price increases.
Amount of competition
If there is very little competition in the
market, a business can charge much
higher prices because consumers
cannot switch to a rival.
15
Strength of the brand
A business with a strong brand can
generally charge a higher price than
those with weaker brands.
Stage in the product life cycle
Product pass through a number of stages
over their lifetime. As a product passes
through the different stages of this life
cycle, a business may adjust the price
charged
Costs and need to make profit
In the long term, price must cover all the
costs of production and generate a
profit. Businesses need to consider the
value of their products in addition to
costs if they are to extract the most from
consumers

16. Distribution
4

17. Distribution
Channel
17

18. 18
Wholesaling
Wholesaler usually buy from
manufacturers and sell to retailers.
A wholesaler stocks goods
produced by many manufacturers
Retailing
Retailer buy large quantities from
manufacturers and wholesalers
and sell small quantities to
customers (breaking bulk)
Agents or brokers
Travel agents sell holidays and
flights for holiday companies,
airlines and tour operators. Estate
agents sell properties on behalf of
vendors. Agents are also used to
sell insurance and other financial
product. Manufacturers may also
use agents when exporting.

19. Consideration
19
1
The nature of the
product
Services will sold directly to
customer, fast moving
consumer goods will sold
directly by manufacturer to
consumers, exclusive
product will sold in special
outlet, and technical
product will sold by expert
salespeople
2
Cost
Business will choose
the cheapest
distribution channels
and prefer direct
channels and minimize
the intermediaries.
3
The market
Producers selling to
mass markets are likely
to use intermediaries.
In contrast, businesses
targeting smaller
markets are more likely
to target customers
directly
4
Control
Some producers need
to fully control over
distribution. Ex:
Producers do not want
to see their exclusive
product in less
prestigious outlets as
this might damage
their image

20. 20
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