1.3 Marketing Mix and Strategy

• marketing mix

  price

  product

  place

  promotion
• marketing

  process of finding out, meeting and exceeding customers' needs

  involves adjusting the marketing mix to meet needs
• companies are keen to bring new products to market as they help to generate more revenue and ensure that the business stays competitive
• design mix

  aesthetics

  function

  economic manufacture (cost)
• function

  the way a product works

  does it do what it needs to do

  is the product reliable
• common features of products that successfully emphasise function in the design mix

  more predictable and stable demand

  longer product lifecycles

  lower promotional costs

  build reputation for quality based on reliability

  economic manufacture through economies of scale
• economic manufacture (cost)

  does the design allow the product to be made and sold profitable

  how much value is added during the production process
• lower cost of production

  gives a competitive advantage to the business

  businesses can pass on lower prices to customers, making the product more appealing

  this should increase demand and revenue of the business
• aesthetics

  how the product appeals to the customer in terms of how it looks, feels etc

  based on the subjective judgement of customer

  a popular way to differentiate a product
• consumers are asked through marketing research about their feelings towards products: how the product looks, tastes, feels

  aesthetics can mean how the senses respond to the product e.g. the smell of a scented candle

  more stylish and beautiful products tend to sell better and can charge a premium price

  aesthetics can even be the emotional attachment that the customer has with the product
• common features of products that successfully emphasise aesthetics in the design mix

  high added value

  demand fuelled by customer aspiration

  potentially shorter product lifecycle

  attract imitation - need for design protection

  need for greater promotional support
• bespoke design

  custom made, custom built, tailor made to the consumer

  e.g. customised car, wedding cake, customised wedding
• standard design

  products or services that are sold as standard, the customer cannot ad any extra features or benefits
• changes in design to reflect social trends

  shifts in social trends may mean that companies have to adapt the design mix

  current trends towards concern over resource depletion which means that products are being designed for waste minimisation, re-use and recycling, sustainability is part of the purchased design
• benefits of adapting to social trends

  reduce waste - fewer resources used - lower costs - higher profits

  designs reflect social trends - more popular - more sales - increase revenue and profits

  USP - strengthens brand image - loyal customers - increase prices
• if designs reflect social trends=more popular with consumers=sell in greater quantities=raise revenue and profits
• efficiencies in production can be achieved by changing the types of materials used or by updating the technology used in production
• ethical sources

  'ensuring that the products being sources are created in safe facilities by workers who are treated well and paid fair wages to work legal hours' and implies that the supplier is respecting the environment during the production and manufacture of the products'
• promotion purpose

  tell consumers about a new product

  remind customers about an existing product

  reach a widely dispersed target audience

  reassure customers about products

  show consumers that rival product aren't as good

  improve or develop the image of the business
• promotion

  an attempt to obtain and retain customers by drawing their attention to a firm or its products
• above-the-line promotion

  placing adverts using the media

  paid for communication in the independent media e.g. advertising on TV or newspapers, it can be targeted, it can also be seen by anyone outside the target audience

  main aims - inform customers, raise awareness and build brand positioning

  tends to have a higher cost since the promotional methods used are less precise
• advertising

  paid for communication through a wide variety of advertising media - TV, radio, newspapers, magazines, online, cinema, billboards

  consumers are subjected to many advertising messages each day and so it is hard to get through

  mass marketing like this is very expensive
• advantages of advertising

  wide coverage

  control of message

  repetition, message can be communicated effectively

  can be used to build brand loyalty
• disadvantages of advertising

  often very expensive

  impersonal

  one way communication

  lacks flexibility

  limited ability to close a sale
• informative advertising

  adverts designed to increase consumer awareness of products

  give clear information about a product's features
• persuasive advertising


  designed to try to convince customers to buy a particular brand - often aimed at people emotions
• reassuring advertising

  advertising aimed at existing customers, e.g. financial services - money is safe
• below-the-line promotion

  any promotion that does not involve the media

  concerns promotional activities where the business has direct control over the target or intended audience

  sales promotions, public relations, direct marketing, personal selling and sponsorships
• sales promotion

  tactical, point of sale materials or other incentives designed to boost short-term sales

  free gifts, coupons, loyalty cards, competitions, BOGOF offers, money-off deals
• BOGOF

  buy one get one free

  encourage customers to go into the shop or buy the item
• advantages of BOGOF

  very popular with shoppers

  encourages trial and use of the product

  good way to encourage shoppers to switch from their normal brand

  boosts sales - sales revenue increases
• disadvantages of BOGOF

  loss of profit as there is an increase in costs, will not be balanced by the increase in sales

  only useful in the short-term
• price discounts

  the normal RRP of the product or service has been reduced
• advantages of price discounts

  great way to clear old or out-of-date stock
• disadvantages of price discounts

  customers may regard the business as a cheap option

  too many discounts and customers become suspicious
• coupons

  can be used to capture new customers as it adds an incentive to buy (often with a time limit)

  can also be used with existing customers to encourage repeat purchases
• advantages of coupons

  can help the customer feel they are getting better value for money

  available from websites, loyalty cards, store magazines and on the back of some packs to encourage repeat purchase
• disadvantages of coupons

  reduced profits from the cost of running the promotion

  some customers may be waiting for the coupons before they purchase

  customers may have been wanting to make a purchase anyway
• samples/giveaways

  where a business may send out or give customers free samples in order to persuade them to try the product for the first time

  giveaways may occur on the front of a magazine
• advantages for samples/giveaways

  ideal for new product launches

  works especially well with some products e.g. shampoo, food etc

  encourages word-of-mouth promotion