2.2

• Marketing mix (4Ps of marketing)

  A framework for businesses to create and implement successful marketing strategies
• The 4Ps


  • Product
  • Price
  • Place
  • Promotion
• The 4Ps


  • They work together to satisfy the needs and wants of a target market while achieving the company's objectives
• Product design mix


  The combination of elements that make up a product's design
• Elements of product design

  • Function
  • Aesthetics
  • Cost
• Products can be tangible goods or intangible services
• Balancing function, aesthetics, and cost helps the product design to be both functional and attractive, while also being cost-effective for both the manufacturer and the consumer
• Manufacturers balancing all three elements

  • Fentimans ginger beer
• Manufacturers focusing on one aspect more than others

  • Asda own brand ginger beer
• Function


  The intended purpose and the specific tasks a product is designed to perform
• Aesthetics


  The product's visual and sensory appeal, including its form, shape, colour, and texture
• Cost


  The cost of production which directly affects the price point at which a product can be sold
• Product life cycle


  The different stages a product goes through from its conception to its eventual decline in sales
• Stages of the product life cycle

  • Development
  • Introduction
  • Growth
  • Maturity
  • Decline
• The implications for cash flow and marketing vary at each stage of the product life cycle
• Implications of the product life cycle for the business

  • Cash flow
  • Marketing strategy
• Extension strategies


  Techniques used by businesses to extend the life of a product beyond its natural life cycle
• Types of extension strategies

  • Product-related
  • Promotion-related
• Product-related extension strategies


  Changing or modifying the product to make it more appealing to customers and extend its life cycle
• Ways to achieve product-related extension strategies

  • Product improvements
  • Line extensions
  • Repositioning
• Promotion-related extension strategies


  Changing the marketing and promotion of the product to extend its life cycle
• Examples of promotion-related extension strategies

  • Changes to advertising
  • Price promotions
  • Sales promotions
• Product differentiation


  An attempt by a business to distinguish its products from those of competitors
• Strong product differentiation helps the firm to develop its competitive advantage
• Successful product differentiation helps the business to increase demand for its products, increase brand loyalty, and allow the business to charge higher prices
• Examples of successful product differentiation

  • Hyundai Cars in Singapore introducing a 3 year warranty
  • Green & Black using Fairtrade cocoa and sugar
• Pricing strategies


  The options businesses can choose from to be profitable, competitive, and successful in the long run
• Types of pricing strategies

  • High profit margin, lower volume (price skimming)
  • Lower profit margin, higher volume (penetration pricing)
• Businesses usually focus on one of the two pricing strategy options
• Freemium models


  Businesses that are able to benefit from high profit margins and high sales volumes
• Factors influencing the choice of pricing strategy

  • Number of USPs/Amount of Differentiation
  • Technology
  • Level of Competition
  • Strength of the Brand
  • Stage in the Product Life Cycle
  • Costs and the Need to Make a Profit
• Retailers have had to adjust their pricing strategies to remain competitive in an online marketplace where customers can easily compare prices
• Retailers now offer to match the prices of their competitors in order to prevent customers from switching to a competitor with a lower price
• Promotion is an important element of the marketing mix as it plays a crucial role in generating customer awareness, interest and desire for a product/service
• Promotion


  The variety of promotional methods a business can use to communicate with their target market
• Premium pricing strategy


  Used to recover research and development costs, and then gradually lowering prices over time
• Promotion


  • Plays a crucial role in generating customer awareness, interest and desire for a product/service
  • Helps to build brand awareness and loyalty which can lead to repeat purchases and referrals
• Types of Promotion


  • Advertising
  • Branding
  • Special Offers
  • Sponsorship
  • Product Trials
• Advertising


  Promotion occurs through paid channels such as television, radio, print media, and online advertising
• Branding


  The process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product/service or company from its competitors