Elements of the Marketing Mix

• Marketing Mix:

  • product
  • price
  • place
  • promotion
• effective marketing mixes constantly adapt to the ever-changing business environment
• choice of marketing mix depends on:

  • product
  • competitor's products
  • target customers
  • business approach
• Product


  refers to the products or services the business sells
• Product

  Development:

  • new product development - design, price, expected sales and the cost of development and production
  • businesses need to change its products to keep up with changes in customer needs
• Product

  Stages of Development:

  • generating an idea
  • checking the idea
  • developing the product
  • trialling the product
  • launching the product
• Product

  Differentiation - standing out from their competitors

  • building a brand image (advertising, celebrity endorsements and its logo)
  • unique selling points
• Product

  portfolio - collection/range of products the business sells as it grows
• Product

  product portfolio's are managed using the Boston Matrix - a diagram that allows a business to analyse its product portfolio or product mix
• Product

  Boston Matrix - categories measures a product in terms of its market share and market growth

  • star: high market share, fast growth market
  • cash cows: high market share, low growth market
  • question marks: low market share, fast growth market
  • dogs: low market share, low growth market
• Product

  Life cycle - the sales of a product from its development to its decline
• Product

  Life cycle:

  • development - product is designed and tested, high costs, no sales = no revenue
  • introduction - product launch, promotion costs, starting sales = starting revenue
  • growth - product success, sales increase rapidly
  • maturity - product matures, sales begin to slow
  • decline - sales fall, business decides on investing money to try boost sales or to remove product from sale
• Product

  Extension strategies - help prevent a product going into decline

  • reducing the price
  • advertising
  • new packaging
  • new features
• Price


  -the amount a business charges for its product/service

  -set according to how much a customer is willing/able to pay

  -value for money: low prices generate higher levels of sales (generally)
• Price


  increase in price = decreases in demand (generally)
• Price

  how to stop demand changes by changes to price:

  • strong USP
  • strong brand image
• Price


  methods:

  • price skimming - starting high price, decreased over time
  • price penetration - starting low price, increased over time
  • competitive pricing - similar price to competitors
  • loss leader - selling one product at a loss, customers have to buy additional products that will generate a profit
  • cost-plus - cost of making a product + a percentage for profits
• Price


  influences to price:

  • costs - ensure a profit is made
  • demand - if demand = low, prices may be lowered
  • degree of competition - price reductions to compete with other businesses
  • product life cycle - dependant on stage
  • brand image - if brand = desirable, prices may be higher
• Place

  the channels of distribution used to get the products from the producer to the final customer
• Place

  channel of distribution can include:

  • producers - maker of product/service
  • wholesalers - buys products to sell in smaller quantities to retailers
  • retailers - sell goods/service to final customer
• Place

  distribution channel examples:

  producer -> customer

  producer -> wholesaler -> customer

  producer -> wholesaler -> retailer -> customer
• Place

  other distribution channels:

  • mail order businesses - don't have stores, send catalogues to customers who place orders
  • telesales - businesses who sell products over the telephone, customers place orders/potential customers are called to try and convince them to buy them
  • e-commerce - selling products on a website
  • m-commerce - selling products on mobile devices
• Promotion

  the method a business uses to communicate information about its products and services among its customers and potential customers
• Promotion

  main aim = to persuade customers to purchase or inform about products

  • advertising
  • sales promotion
  • public relations
  • personal selling
• Promotion

  Advertising:

  • television
  • newspaper, magazines and billboards
  • online
  • radio
• Promotion


  Public relations - increases awareness of the business and its products

  • free media coverage (opening of new stores/launching new products)
• Promotion

  Sales promotion - increases sales in the short-term

  • discounts
  • buy one get one free
  • competitions and coupons
  • point of sales displays
  • free gifts
  • free samples
• Promotion

  Sponsorship - increases the profile of the business

  • sport events
  • sport teams
  • television programmes
• Promotion

  Social media - cheap way to communicate with customers about new products/special offers - takes customers to their website
• Promotion

  Personal selling - using a mix of different promotion methods to increase its sales, the 'promotional mix'

  • depends on type of product/service on offer
  • competitor's actions
  • target market
  • relative costs of the different methods
  • size of budget the business has
• Competitive Environment


  the pressure placed on a business by its competitors
• Competitive Environment

  mass market - for products and services that are aimed at large groups of customers with similar characteristics
• Competitive Environment

  operating in a mass market = having a tough competitive environment as there are many other business offering very similar products and services

  • if a business charges too much -> customers won't remain loyal
• Competitive Environment


  adapting the marketing mix means trying to convince customers that their product is better than the competition - aim is to gain a competitive advantage
• Competitive Environment

  Adaptions to Marketing Mix:

  • filling a gap in the market (product/service)
  • offering better sales promotions, e.g buy one get one free, online discount codes or cashback
  • creating a unique selling point
  • developing relationships with existing customers (creates customer loyalty)
• Technology

  'promotional mix' may have to change to enable it to interact with its customers through increasingly popular technologies (online messaging/digital advertising)
• Technology

  use of social media: promotions

  • sponsorship
  • influencers
• Technology

  adapting to advances and trends in technology:

  • increasing use of e-commerce and m-commerce
  • use of digital media to promote products and maintain consumer interest
  • changes to products design to incorporate new technologies
  • reduction of prices due to increased efficiency in production
  • increased competitive pricing - easy access to price comparisons across retailers