Marketing Mix.ppt

MARKETING MIX…
Dr. Sandeep Nandram Dive,
PVG Nashik

CONCEPT…
 The term "marketing mix" was coined in 1953 by
Neil Borden.
 A broad concept which includes several aspects of
marketing which all inquire to obtain a similar goal
of creating awareness and customer loyalty.
 It is like an receipe, mix of various ingredients,
and all the ingredients are very important.
 However the quantity of different ingredients can
be changed as per the requirement.
PVG Nashik

DEFINITIONS…
 “Marketing mix consists of a list of important
elements that make up marketing program and a
list of forces to which manager must adjust.” – Neil
Borden.
 “Group of various policies used by producer to
succeed in market, can be said as marketing mix.”
– R S Dawer.
 “Marketing mix refers to the combination of
marketing decisions that are used to market
specific products, to specific markets over a
specific time period.”
PVG Nashik

MEANING…
 Each product of a company has a marketing
mix different from other products.
 The marketing mix of same product can be
different in different markets.
 Marketing mix should be in effect for a
specific period of time.
 Marketing mix decisions should be made
carefully considering the company resources
and strategies.
PVG Nashik

MEANING…
 The marketing mix principles are controllable
variables which have to be carefully managed and
must meet the needs of the defined target group.
 All the elements are planned in harmony with each
other.
 All elements of the mix are Linked and must
support each other.
 Consumer satisfaction and profit maximisation are
the two aims of every marketing mix.
PVG Nashik

The 4 P's of Marketing Mix…
The major marketing management decisions
can be classified in one of the following four
categories:
 Product
 Price
 Place (distribution)
 Promotion
A firm needs to have a perfect blend of these
4 categories in order to satisfy the customers
needs and requirements.
PVG Nashik

PRODUCT
PVG Nashik

PRODUCT MIX
 Includes all the decisions related to a
product.
Product Decisions
Branding Quality Features
Benefits offered
PVG Nashik

PRODUCT MIX IS A COMBINATION
OF…
 Product Planning
 Product Development
 New Product Development
PVG Nashik

 Product Planning :
- Product planning is concerned with the determination
of the precise nature of the product.
Physical Factors : Colour, Design, Features,
Performance
Non-physical factors : Utility, Value, Quality, etc.
- Product planning involves decisions that are to be
taken
before the product is brought into the market.
PVG Nashik

 Product Planning of Consumer Goods :
- Resource Analysis :
- A Company cannot product everything the
customer demands.
- Select a particular demand and develop a
product to satisfy that demand.
- Selection of product should be depending
on their own availability of resources.
- manpower, finance, equipment, raw
material, infrastructure, etc
PVG Nashik

 Quality Decision:
- High quality, medium quality, market quality, low
quality
- Target Market Selection depending on quality
consciousness.
- Likes and dislikes of the consumers to be
considered.
• Developing the Product:
- Developing a product considering above 2
factors.
PVG Nashik

 Pre-testing the Product:
- To measure the effectiveness of the product before actually
launching the product.
- Simulation of the real market conditions.
- Product sample or product models are developed
- Modifications are made depending on the pre-test results.
- 3 Types of Tests
PVG Nashik

 3 types of Tests:
i. Concept Testing
ii. Product Testing
iii. Test Marketing
PVG Nashik

 Actual Production:
- After the modification is done, large scale production
is carried out.
- Promotional activities can be subsequently conducted.
• Marketing the Product:
- Marketing Strategies for the Target Market
- Designing the Distribution Channel – wholesalers,
retailers, agents, brokers, franchisees, etc.
- Developing own sales force.
PVG Nashik

 Control & Evaluation:
- Control over major marketing activities and supply
chain.
- Evaluating the difference between the actual and
expected.
- Evaluation of performance at various levels.
Product level, distribution chain level.
PVG Nashik

 Product Development :
Product Innovation:
- Develop a new product idea.
- Adding new features to a existing product
- New market, new technology, new style, etc.
Product Improvement:
- Improvement in features, designs, packaging.
- Improved methods of distribution, promotion
- Changes in the existing product.
- Strategic Decision considering customer feedback, or
competition. Dr. Sandeep Nandram Dive,
PVG Nashik

 New Product Development :
Make or Buy :
- Mergers & acquisitions.
- Product/Brand acquisitions.
- New Ideas.

PRODUCT STRATEGIES :
a) In straight extension : Product is
introduced into a market without any change
to it.
b) Product adaptation: Alter the product to
meet local conditions or preferences . For
e.g. Nokia mobile handset.
c) Product Invention: Creating something
new.
It can take 2 forms :
Backward invention : re-introducing earlier
product forms that are well adapted to other
market’scountry’s need.
Forward invention: i.e. creating a new
product to meet the needs in new

PRICE MIX…
 The only element in marketing mix, that produces
revenue….. Other elements produces cost.
 Its is not just a number on a tag, it also includes
rent, fees, rates, tolls, wages, commission,
incentives, etc.
 It is a monetary value that the customers pay in
return of a goods or services that they purchase.
 It is one of the most vital determinant of buying
decision.
 Fixed Cost + Variable Cost + Other Cost = Price
 Price – Cost = Profit Dr. Sandeep Nandram Dive,
PVG Nashik

PRICING AS A STRATEGY :
 Pricing gives a identification to a brand and
builds a brand image.
 Gives a competitive advantage to the brand.
 It is a very critical strategic decision.
 Important component in brand positioning.
 Various factors have to be considered for
determining the price.
PVG Nashik

FACTORS AFFECTING PRICING:
1. Internal Factors 2. External Factors
1.Internal Factors :
• Organizational Factors
 Cost
 Organizational & Product Objectives
 Marketing Strategy
 Brand Positioning
 Brand Image
PVG Nashik

1.External Factors :
• Market Demand
 Economic Condition
 Competition
 Government Regulations
 Consumer Behaviour
 Ethical Consideration
 Supplier
PVG Nashik

TYPES OF PRICING…
 Cost Based Pricing:
i) Mark-up Pricing: Cost Price + Profit Margin
- The price above the cost price is a mark-up
pricing.
- The seller fixes the markup price, managing his
own profit margin.
ii) Absorption Cost Pricing :
Total cost of Production + Profit Margin.
- Total Cost includes, production cost, selling
cost & administration cost
PVG Nashik

iii) ROI Pricing:
- Total value of investment is considered.
- Current value of the total investment is
determined.
- Then the a markup is decided.
PVG Nashik

 Market/Demand Based Pricing:
i) Skimming Pricing:
- Initial high price - subsequently decreases
- High Price – High Profit margin
- Grab market opportunity
- This is a push strategy
- Mostly used as a entry strategy specially in
unique or specialty goods.
ii) Penetration Pricing :
- Initial Low price – subsequently increases
- To increase customer awareness and market
penetration
- This is a pull strategy
PVG Nashik

 Administered Pricing:
- Regulated by the government
- Specially on essential commodities
- E.g Fertilizers, Medicines, personal services,
etc.
• Transfer Pricing:
- When goods/service are transferred from one
department to another department.
• Discount Pricing:
- Price below the retail price.
- for instant sale/profit or liquidation of goods,
etc.
PVG Nashik

OBJECTIVES OF PRICING :
1. Stability in prices
2. Profit maximization
3. Competition
4. Maintain market share
5. Stimulate sale
6. Maximum return on investment
PVG Nashik

MEANING…
 Modern marketing calls for more than developing a
good product, pricing it attractively, and making it
available.
 It is also important to communicate to the present and
potential stake holders and general public.
 The question now is not ‘whether to communicate’ or
‘not to communicate’,
but how, when, where, to whom and how often to
communicate.
 Now promoting the product is as important as
PVG Nashik

WHAT IS PROMOTION?
 “Any form of communication a business or
organization uses to inform, persuade, or
remind people about its products”.
The Promotional Mix is a combination of the
different types of promotion.
PVG Nashik

• TWO BASIC TYPES OF PROMOTION
 Product Promotion
 Type of promotion that a business uses to convince
potential customers to buy products from them and not
their competitors.
 Institutional Promotion
 Type of promotion that a business uses to create a
favorable image for itself.
PVG Nashik

• FOUR TYPES OF PROMOTION….

ADVERTISING…
 Any paid form of non-
personal presentation
and promotion of
ideas, goods, or
services by an
identified sponsor.
PVG Nashik

MEANING…
 It is the means employed to draw attention to
an object or purpose.
 Advertisers intends to spread his ideas about
his offering among his customers and
prospects.
 Popularization of the product is the basic aim
of the advertising activity.
PVG Nashik

ADVERTISING OBJECTIVES :
 The advertising objectives includes decisions on
target market, brand positioning and marketing
program.
 An advertising objective is a specific
communications task and achievement level to
be accomplished with a specific audience in a
specific time period.
 E.g. To communicate to maximum customers
about the Diwali Offers at the Retail Store.
PVG Nashik

ADVERTISING MEDIA:
 Television Ads
 Print Ads
 Radio Ads
 Film Ads
PVG Nashik

ALTERNATIVE ADVERTISING OPTIONS:
 Billboards
 Public spaces
 Point of purchase
 Posters
 Product placement
This is called Place Advertising.

CHARACTERISTICS OF GOOD ADVERTISING:
 Should be of interest to the audience
 Audience should interpret the message in the
intended manner.
 Should also influence the audience
 Should have a clear message

PUBLIC RELATIONS
 Any activity designed
to create a favorable
image toward a
business, its products
or its policies.
 “A specific kind of public
relations that involves
placing positive and
newsworthy information
about a business, its
products, or its policies in
the media”

MEANING…
 A public is any group that has an actual or
potential interest in or impact on company’s
offer.
 Public Relation (PR) includes a variety of
programs to promote or protect a company's
image or product.
 Companies take concrete steps to manage
public relations
 Some companies have separate PR
departments.
PVG Nashik

FUNCTIONS OF PR :
 Press Relations
 Product Publicity
 Corporate Communications
 Lobbying
 Counseling
PVG Nashik

MARKETING PUBLIC RELATION (MPR):
 To support corporate or product promotion
and image making.
 The old name for MPR was Publicity
 It is a task of securing editorial space in print
and broadcast media to promote a product,
service, idea, place, person or organisation.
 It is an unpaid activity.
PVG Nashik

MPR PLAYS IMPORTANT ROLE IN …
 Launching new products.
 Repositioning a mature product.
 Building interest in product category.
 Influencing specific target groups.
 Defending product having encountered
public
problem.
PVG Nashik

MAJOR TOOLS IN MPR:
 Publications
 Events
 Sponsorships
 News
 Speeches
 Public Service Activities
 Identity Media – Visual Identity through
logos, signs, cards, buildings, uniform, dress
codes, brochures, etc
PVG Nashik

PERSONAL SELLING
 The act of persuading a customer to buy a
product, through having personal
communication with him/her.
 It is the task of communicating the value to
the customer personally.
 Promotion, Advertising & public relation are
indirect communication, where as Personal
Selling is a direct communication.
PVG Nashik

MEANING…
 It is a direct communication between a paid
company representative and the customer.
 It is provides analytical, consultative and
advisory service to customer.
 It is helping buyer to buy wisely and bringing
benefits to them with every purchase.
 It is creating value satisfaction for both the
customer and the firm. Dr. Sandeep Nandram Dive,
PVG Nashik

PERSONAL SELLING PROCESS
 Prospecting
 Pre-Approach
 Approach
 Sales Presentation
 Overcome Objections
 Negotiation
 Closing
 Post-Sale service/maintaining relations.
PVG Nashik

SIGNIFICANCE …
 Actual sales is its goal unlike advertising
promotion or public relation
 Performs several tasks – promoting,
communicating, locating buyer, information
sharing, etc.
 Serves as a competitive advantage
 Salesman, a unique & expensive resource
PVG Nashik

SALES PROMOTION
 All promotional
activities, other than
personal selling,
advertising, and
public relations is
called….

DEFINITION:
“It is defined as the marketing technique,
where an additional incentive apart from the
actual product benefits, are offered to the
target customer, sales force or the channel
partners.”
PVG Nashik

MEANING…
 It is a direct and open encouragement to the
consumers to buy the product instantly.
 Activities are mainly intended to supplement
personal selling, advertising and publicity
and increase the sale of the product.
 It is a silent salesman.
 It is the motivation, that drives the salesforce
or channel partners to put in additional efforts
and achieve a specific target.
PVG Nashik

OBJECTIVES OF SALES PROMOTION …
 Increasing sale in immediate time frame
 Introducing new product
 Encouraging trial purchases
 Overcoming seasonal slumps
 Retrieving lost customers and retaining new ones
 Motivating salesmen
 Motivating wholesaler/dealer/distributor/retailer
 Counter attacking competitor’s strategies
 Stock liquidation
 Steady flow of cash Dr. Sandeep Nandram Dive,
PVG Nashik

2 BASIC COMPONENTS OF SALES PROMOTIONS…
1. Consumer Promotion :
- meant for consumers,
- wide publicity through
common media
- E.g., Coupons, bonus,
trial
packs, test drives, price
discounts, quantity
discounts, lucky draws,
prizes, contests, etc.

2. Trade Promotion :
- Also called B2B
promotion,
- meant for sales
persons
or channel partners.
- to motivate them to
take additional efforts
- reward or award for
achieving the goals or
targets Dr. Sandeep Nandram Dive,
PVG Nashik

LIMITATIONS OF PROMOTION:
 It is meant only for short-term sales
achievement
 Its success is still doubtful until the results are
evaluated
 Brands may not get same response without
any promotion.
 Price-offs, discounts, offers, may affect brand
image.
 Promotional strategies can be copied by
competitors. Dr. Sandeep Nandram Dive,
PVG Nashik

DEFINITIONS…
 “The physical movement of goods or
services from producer to the consumer
through various intermediataries is called
the Physical distribution”.
 “Distribution channels are sets of
interdependent organizations involved in
the process of making a product or service
available for use or consumption”.
PVG Nashik

MEANING…
 It is the delivery of right product to right
customer at right time, at right cost and in right
form.
 It includes channels of distribution,
transportation, warehousing and inventory
control.
 Ensures the flow of products from point of
production to point of consumption.
PVG Nashik

PARTNERS IN PHYSICAL DISTRIBUTION PROCESS
 Manufacturer
 Wholesaler
 Retailer
 Dealer/Distributor/Stockist
 Franchiser
 Carry N forward Agent
 Company Sales Person
 Consumer
PVG Nashik

Consumer
LEVELS OF DISTRIBUTION CHANNEL
Consumer
Manufacturer Manufacturer Manufacturer
Retailer
Consumer
Retailer
Wholesaler
Zero Level One Level Two Level

FUNCTIONS OF DISTRIBUTION CHANNEL…
 Planning overall physical distribution system
 Warehousing
 Transportation
 Receiving
 Handling
 Inventory management
 Delivery
 Communication/Reporting
PVG Nashik

OBJECTIVES OF PHYSICAL DISTRIBUTION…
 Facilitate selling by being physically close to
customer
 Ensuring availability of goods
 Bridging the gap between the manufacturer an
the customer
 Breaking bulk
 Assortment of products
 Stock holding
PVG Nashik

 Assisting the sales process
 Risk bearing
 Sharing financial risk
 Assists in sales promotion
 Catering to geographically varied market.
 Provides market information
 Helps in formulating marketing strategies
 Leads to customer satisfaction.

Extended P’s of Marketing Mix
People
Process
Physical Evidence

PEOPLE…
 All people directly or
indirectly involved in
the consumption and
imparting of a service
are an important part
of the extended ps.
E.g. Employees, Management people, board of directors,
knowledge workers, consumers
PVG Nashik

 People are the most important element of
any service or experience.
 They are the representative of the
organisation.
 Services are performed by people whose
performance is monitored
 It influences the quality of the service
delivered and perceived to be delivered.
 Right people can be an competitive
advantage.
PVG Nashik

 Consumers make judgments and deliver
perceptions of the service based on the
employees they interact with.
 Staff should have the appropriate
interpersonal skills, aptitude, and service
knowledge to provide the service that
consumers are paying for.
 Essential to Recruit the right staff and impart
Training.
PVG Nashik

PROCESS
 Refers to the systems
used to assist the
organisation in
delivering the service

 Procedure, Mechanism and flow of activities
by which services are consumed or
rendered.
 These are the essential element of marketing
strategy.
 E.g. customer Relation management, Credit
facility, Customer Service, After-Sales
service, Planning, Strategies, etc.
PVG Nashik

 It can be tangible and intangible element.
 It helps to communicate and perform the
service and give experience to the
customers.
 It may enhance customer trust, satisfaction
and belongingness towards the services
provided.
 E.g. Building, office, documents, visiting
cards, websites, etc..
 The ability and environment in
which the services delivered.
PVG Nashik

Marketing Mix.ppt

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