Business

• Marketing mix


  The combination of product, price, place and promotion for any business venture
• No one element of the marketing mix is more important than another – each element ideally supports the others
• Firms modify each element in the marketing mix to establish an overall brand image and unique selling point that makes their products stand out from the competition
• Market research findings are important in developing the overall marketing mix for a given product
• Product portfolio


  The mix of products the business produces and sells
• Product portfolio


  • Spreads fixed costs
  • Allows for greater economies of scale
  • Allows the targeting of wider markets
  • Reduces risk
  • Smooths out overall sales
  • Creates opportunities for growth
• Asset-led marketing


  A marketing strategy based on a firm's strengths, not solely on the customers' needs
• Advantages of asset-led marketing


  • Strengths linked to market needs
  • The business will be aware of its weaknesses and will not produce products that it does not believe it can do well just because the market has requested them
  • The cost of market research may be less
  • Likelihood of success likely to be greater
• Case study example


  • Tesco sending details of their back-to-school children's clothes promotions to customers on their database, who spend money on fish fingers and burgers
• Ways to market a business


  • Find out customers' requirements and make sure products meet them
  • Assess whether the layout/presentation of the business is attractive enough
  • Review the product range – is it appropriate? Are they targeting the right market?
  • Review the pricing, e.g. in comparison with the competition
  • Review the way the business promotes their products. Alternative promotional offers
  • Find out about competition again via market research and try to match what they are doing
  • Consider the location – is it suitable – for the business/customer?
• Unique selling point


  Something that differentiates the product from its rivals
• Purposes of packaging


  • Design
  • Convenience
  • Protection
  • Information
  • Environmental factors
  • Cost of materials to make the packaging
• Branding


  A name, term, sign, symbol or design that identifies a seller's products and differentiates them from competitors' products
• Advantages of branding


  • Create brand loyalty
  • Differentiate the product
  • Gain flexibility when making pricing decisions
  • Help recognition
  • Develop a brand image
  • Customers tend to trust the product and may purchase other products that are associated with the brand
  • Give a business a clear and easily recognisable identity, which will help to differentiate products from those of competitors
  • Retailers will be more willing to stock and sell the branded products
  • Competitors have to discount heavily to attract customers away from their preferred brand
• Disadvantages of branding


  • High cost of advertising
  • Loss of brand value for one product can affect a whole range of similarly branded products
  • Brands invite competition – often from copycat manufacturers
  • High cost of research and development in ensuring that the brand continues to develop and lead the market
• Factors that make a brand valuable


  • Reputation
  • Best prices
  • Good service
  • Convenience
• For some businesses, the concept of quality is central to the image of that business – for example, Apple; they are at the expensive end of the market and therefore cannot allow their reputation to be damaged by either poor quality or poor quality service
• Some businesses aim to be the very best in the industry – therefore providing a quality product will be integral to that
• Customers will not repeat purchase if the quality is poor – lost revenue in the longer run – word of mouth
• Retails will not stock a business' products if they cannot be relied upon, as their own reputation will be damaged
• The price for its products must be set at the right level. Too cheap and it will not fit in with the image of the business. Too expensive and they may lose some customers
• The place where the products are sold/displayed is important – a wide geographical spread is important in order to allow people to access the products
• The promotion of its products and service is also important in maintaining the right image as well as informing the customers of the products existence. Well-designed website and impressive brochures
• Ways to differentiate products from competition


  • Methods of promotion – creating a personality for the product
  • Packaging – eco-packaging
  • Form – making your products look different from the competition
  • The provision of add-ons
  • Quality and reliability
• Marketing plan


  A detailed statement of how the company's marketing strategy will be put into action
• Advantages of a marketing plan


  • The plan forces a business to think about the future
  • It will improve co-ordination, takes a holistic view of a business marketing activities and helps to ensure that all departments work together
  • It will help ensure that the business achieves its objectives
  • Employees will be more informed and perhaps better motivated
  • A marketing plan should make banks feel more confident about offering loans to a firm
• Product differentiation


  • Helps create customer loyalty
  • Gives a business more control over the pricing strategies used
• Advantages of a marketing plan


  • The plan forces a business to think about the future
  • It will improve co-ordination, takes a holistic view of a business marketing activities and helps to ensure that all departments work together
  • It will help ensure that the business achieves its objectives
  • Employees will be more informed and perhaps better motivated
  • A marketing plan should make banks feel more confident about offering loans to a firm
• Disadvantages of a marketing plan


  • The plan itself is costly and time-consuming to devise
  • If the plan is not well drawn-up or includes too much information, it may do more harm than good as it fails to help the business achieve its objectives
  • A bad plan can de-motivate employees who have no faith in it
  • Businesses are often organised into departments and the success of the marketing plan will depend upon each being prepared to put aside their own goals to satisfy consumers' needs
• Elements of the marketing mix


  • Marketing strategy
  • Promotion
  • Services
  • Branding
  • Social media
  • Research
  • Publicity
  • Advertising
  • Customer
  • Products
  • Print
  • Blog
  • Pricing
  • Graphics
• Product life cycle


  The life of a product in the market with respect to sales. Products pass through these stages at different speeds – some products do not make it past the early stages and fail!
• Stages of the product life cycle


  1. Development

  2. Introduction

  3. Growth

  4. Maturity and Saturation

  5. Decline
• Extension strategies


  A medium-/long-term plan for lengthening the life cycle of a product or brand, or to generate more sales. Likely to be implemented during the maturity or decline stages.
• Extension strategies


  • New feature
  • Develop a wider product range
  • Aim at specific target markets that have not purchased the product before
  • Change brand name/packaging/appearance
  • Produce different quality
  • Market in different places
  • New promotions
  • Adopt new pricing strategies
• Relationship between the Product Life Cycle and Cash Flow


  Profits and sales change over the life cycle
• Reasons for changes in product life cycle


  • Fall in demand for products
  • Same quantity of goods sold at lower price so value fallen
  • Goods available from alternative suppliers
  • Recession
  • Technological change
  • Products already owned
  • Products last longer
• Cash Cow


  High market share in a relatively slow growing or declining market. High sales generate cash, which may be used to help support new products being launched in new or existing market segments.
• Problem Child (Question Mark)


  Low market share in a high growth market. Could well provide a lot of revenue in the future, but are probably the most difficult to manage.
• Star


  High market share in a high growth market. Does well in a growing market.
• Dog


  Low market share in a low growth market. They hold little appeal unless they can be revived.