marketing mix

• Marketing mix


  A set of decisions in product marketing that need to be made by managers
• Elements of marketing mix

  • Product
  • Price
  • Promotion
  • Place
  • People
  • Processes
  • Physical evidence
• Goods


  Tangible products
• Services


  Intangible products
• Types of products


  • Consumer products (B2C)
  • Producer products (B2B)
• FMCG (Fast Moving Consumer Goods)


  Goods that do not have an expiration date but are used frequently, so they need to be purchased often
• Perishables


  Goods that perish quickly, e.g. food
• Durables


  Products that can last for a very long time, e.g. washing machine, car, computer
• Specialty Goods


  Goods with unique characteristics, usually distributed through limited channels, e.g. designer clothes
• Product life cycle


  Succession of stages a product goes through from launch to decline
• Stages of product life cycle

  • R&D
  • Launch/Introduction
  • Growth
  • Maturity/Saturation
  • Decline
• Product portfolio


  All the products an organization offers
• BCG Matrix


  A tool to evaluate products in a portfolio based on market growth and market share
• BCG Matrix categories


  • Stars
  • Cash cows
  • Question marks
  • Dogs
• Product life cycle


  Relationship with product portfolio and marketing mix
• Product life cycle


  Relationship with investment, profit and cash flow
• Profit


  Positive difference between revenues and costs
• Cash flow


  Total amount of cash inflows and outflows affecting an organization's liquidity
• Investment


  Purchase of long-term assets to generate future earnings
• R&D stage: Prototype of a good is usually produced, no sales or marketing mix yet, high investment, no profits or positive cash flow
• Introduction/Launch stage: Product is a Star or Question mark, price depends on elasticity of demand, promotion aims to increase awareness, few distribution channels, high investment, no profits yet but improving cash flow
• Growth stage: Product is still a Star or Question mark, price depends on elasticity and competition, promotion aims to persuade customers, more distribution channels, high investment in promotion and distribution, profits and cash flow start to improve
• Maturity/Saturation stage: Competition stabilizes, managers try to find new market segments, price and promotion strategies may be readjusted, distribution channels are well-established, investment is moderate, profits and cash flow are high
• Maturity


  Stage of the product life cycle when sales reach their peak
• Saturation


  Point of the product life cycle when sales are at their peak
• Maturity and saturation are sometimes used synonymously to refer to one stage of the product life cycle
• At the maturity/saturation stage, everything stabilizes including competition
• Managers at maturity/saturation stage

  Want to increase sales by targeting new market segments and readjusting marketing strategies
• Coca-Cola has been in the maturity/saturation stage for decades by using extension strategies
• Cash Cow


  Best product in the BCG Matrix, when market share is high but market is not growing
• Pricing goal at maturity/saturation stage

  Maintain high sales levels, whether by lowering or raising prices
• Promotion goal at maturity/saturation stage

  Remind people about the product, not increase awareness
• Coca-Cola's promotion is ubiquitous, reminding people about the product
• Distribution channels reach their peak and stabilize at maturity/saturation stage
• Investment at maturity/saturation stage

  Goes to promotion and extension strategies
• Profits are high at maturity/saturation stage
• Cash flow is positive and exceeds cash outflows at maturity/saturation stage
• Decline stage


  When sales start to fall after reaching their peak
• When a product reaches decline, organizations launch new products to compensate for the loss
• At decline stage


  Prices are decreased to clear stocks, promotion is minimal, distribution channels are reduced