Marketing Mix And Strategy

• The Boston Consulting Group (BCG) matrix is a 2x2 grid used by businesses to analyze their product portfolio and make strategic decisions about which products to invest in

  
• The four quadrants of the BCG matrix are:

  • Stars: high relative market share and high market growth
  • Question marks: high market growth but low relative market share
  • Cash cows: low market growth but high relative market share
  • Dogs: low market growth and low relative market share
• The BCG matrix helps businesses identify valuable products and those that should be considered for divestment
• Product life cycle stages:

  • Product development: researching and designing the product
  • Introduction: initial slow sales, no profit, high research and development costs
  • Growth: rapid sales growth, unit costs may fall, profitable
  • Maturity and saturation: stable market share, highest sales point, competitors enter the market
  • Decline: sales decrease due to changing tastes, new technology, or new products
• Extension strategies aim to prolong the life of a product before it declines, including advertising, launching new designs, and selling in new areas
• The marketing mix (4P) elements are:

  • Product
  • Price
  • Promotion
  • Place
• Outbound marketing strategies involve directing marketing material at potential customers, while inbound marketing strategies attract potential customers to websites when they are looking for solutions
• Product / Service Design involves the generation and development of ideas through a process that leads to new products and services

  
• Design mix considerations:

  • Function: must be capable of doing the job that is sold to do, convenient and easy for the customer to use
  • Aesthetics: should stimulate people’s senses in addition to performing a function, includes appearance, size, shape, smell, taste, or the presentation of services
  • Cost / Economic Manufacture: a well-designed product or service is more likely to be economically viable
• Product designers need to be aware of changes in social trends, like designing for waste minimization, re-use, recycling, and ethical sourcing
• Benefits of adapting product designs to changes in social trends:

  • Reducing waste leads to using fewer resources, lower cost of production, and higher profit
  • Designs reflecting social trends are likely to be more popular and sell in large quantities
  • Some businesses use design features as a Unique Selling Proposition (USP)
  • Businesses viewed as good corporate citizens if they adopt emerging design features related to social trends
• Promotion involves businesses drawing attention to their products, services, or companies with specific aims like telling consumers about new products, reminding customers about existing products, reaching a wide target audience, reassuring customers that rival products are not as good, and improving or developing the image of the business
• Above the line promotion involves advertising in the media, with informative advertising giving clear information about product features and persuasive advertising convincing customers to buy a particular brand over competitors, focusing on emotional appeal
• Below the line promotion methods include sales promotion (encouraging people to buy products through free gifts, coupons, loyalty cards, competitions, BOGOF offers, and money-off deals), public relations, merchandising and packaging, direct mailing, and direct selling or personal selling
• Advantages and disadvantages of different media for advertising:

  • Television: reaches large audiences, demonstrates product use, but is expensive and some viewers avoid ads
  • Newspaper and Magazines: can refer to in the future, relatively cheap, but not eye-catching and ads may get lost
  • Internet: firms can select the audience, measurable, no delay for online products, but some ads like pop-ups are irritating and not everyone can access the internet
• Methods of promotion selection criteria include cost-effectiveness, market type, product type suitability, stage in the product life cycle, competitors' promotions, and legal factors like EU restrictions on tobacco advertising on television
• Types of branding:

  • Manufacturing Brands: created by producers, involved in production, distribution, promotion, and pricing decisions
  • Own-label brands: products manufactured for wholesalers and retailers by other businesses, sold under their own name
  • Generic brands: products with the name of the product category rather than a company or product name
• Benefits of strong branding include added value to products, ability to charge premium prices, and reduced price elasticity of demand, where a strong brand may result in less impact on demand with price increases
• Pricing strategies are plans designed to meet objectives, helping businesses achieve marketing and corporate goals
• Cost-Plus pricing:

  • Description: Adding a mark-up to unit costs, common for retail businesses
  • Advantages: Gain profit as firms prefer
  • Disadvantages: Ignore market conditions
• Price skimming:

  • Set high price for new product or innovation
  • Advantages: Help business recover research and development cost, increase sales when demand is inelastic
• Penetration Pricing:

  • Charge low price to enter the market
  • Advantages: If demand is elastic, firms can receive more revenue, but there will be a lower profit margin
• Predatory pricing:

  • Aim to eliminate competitors by charging unrealistically lower prices
  • Advantages: Can eliminate some competitors
  • Disadvantages: It is illegal and unfair for some businesses
• Competitive pricing:

  • Some businesses set prices based on rivals' prices
  • Advantages: Firms can increase sales revenue if demand is elastic, but it is impractical for inelastic demand
• Factors determining the most appropriate pricing strategy:

  • Differentiation and USP: Higher price if product has a Unique Selling Proposition or is differentiated from rivals
  • Price Elasticity of demand: Price inelastic demand allows for price increase and revenue growth
  • Amount of competition influences pricing; less competition allows for higher prices
  • Strength of the brand, stage in the product life cycle, cost, and the need to make a profit are also crucial considerations
• Distribution refers to the location where consumers can buy products from
• If a business cannot get products in the right place at the right time, they are not likely to be successful
• Businesses can choose from different distribution channels:

  • Two-Stage: Producer — Consumers
  • Three-Stage: Producer — Retailers — Consumers
  • Four-Stage: Producer — Wholesalers — Retailers — Consumers
• Wholesalers usually buy from manufacturers and sell to retailers, they may break bulk, repack goods, redistribute smaller quantities, store goods, and provide delivery services
• Retailers are businesses that buy goods and sell them directly to consumers, providing various services
• Two-stage distribution includes methods like the internet, direct mail, door-to-door selling, mail order catalog, direct response adverts, shopping parties, and telephone selling
• Agents or brokers act as third parties linking between buyers and sellers
• When choosing the appropriate distribution:

  • Consider the nature of the product, costs, the market, and control over distribution