Post on 29-Mar-2015
Marketing mixMarketing mix
THE TIMES 100
THE TIMES 100
Marketing mixMarketing mixThe marketing mix is the combination of
variables that a business uses to carry out its marketing strategy and meet customer needs.
The marketing mix is often called the 4Ps:ProductPricePlacePromotion
THE TIMES 100
ProductProduct
‘Product’ refers to the functions and features of a good or service
Should satisfy the needs of the customerMay have a Unique Selling Proposition
(USP)‘Product’ also includes a range of factors
such as packaging, quality, warranties, after-sales service and branding
THE TIMES 100
Product lifecycleProduct lifecycle
The product lifecycle looks at the sales of a product over time
THE TIMES 100
Stages of product lifecycleStages of product lifecycleDevelopment – high costs but no salesLaunch – high expenditure on promotion and
product development, low salesGrowth – sales increase and product should
break-evenMaturity – sales stabilise, less expenditure on
promotion needed, revenue & profit should be high
Decline – sales decline, extension strategies can be adopted or the product withdrawn
THE TIMES 100
Extension strategiesExtension strategies
Extension strategies should maintain or increase sales. They include:
Modifying the productReducing the priceAdding a featurePromoting to a
different market sector
THE TIMES 100
PricePrice
The price of a product will depend on:The cost to make itThe amount of profit desiredOther objectives of the businessThe price competitors chargeThe price customers are willing to pay
◦Is there a high demand?◦Is demand sensitive to changes in price?
THE TIMES 100
Price leaders and takersPrice leaders and takers
Price leader – businesses that dominate the market can often dictate the price charged for a product. Other businesses follow this lead.
Price taker – businesses have to charge the market price. This is often the case where there are many small firms competing against each other.
THE TIMES 100
Pricing strategies & tacticsPricing strategies & tacticsSkimming Launching with a high price when there is little
competition, then reducing the price later. Often used with technology.
Penetration Low price charged initially to penetrate the market and build brand loyalty; prrice is then increased e.g. introductory offers on magazines.
Competitive A similar price is charged to that of competitors’ products.
Loss leader Products may be sold at a price lower than the cost to produce it. Often used by supermarkets to encourage people into the store where it is hoped they will buy other products.
Psychological A price is set which customers perceive as lower than it is e.g. £39.99 instead of £40.
THE TIMES 100
PlacePlaceProducts should be conveniently available
for customers to buy‘Places’ include:
◦Stores◦Mail order◦Telesales◦Internet
The use of e-commerce
(promoting and selling on the internet) has
grown massively over the last few years
THE TIMES 100
Channels of distributionChannels of distribution
Manufacturers
Wholesaler
Retailer
Consumer
THE TIMES 100
PromotionPromotion
The aims of promotion are to:Raise awarenessEncourage salesCreate or change a brand imageMaintain market share
THE TIMES 100
PromotionPromotion
Above-the-line promotionThis uses advertising media over which a
firm has no direct control e.g. television, radio and newspapers
Below-the-line promotionThis uses promotional media which the firm
can control e.g. direct mail, sales promotions and sponsorship
THE TIMES 100
Promotional activitiesPromotional activitiesAdvertising e.g. TV, billboards and internet.Sales promotions e.g. Loyalty cards,
BOGOF, discounts & free giftsSponsorship – a business pays to be
associated with another firm, event or causeDirect mailing – promotional material is
sent to potential customers by post/emailPublic relations – building the relationship
between the firm and the public by enhancing its reputation
THE TIMES 100
Promotional mixPromotional mix
Most businesses use a combination of different promotional activities.
The chosen promotional mix will depend on:CostTarget marketProductCompetitors
THE TIMES 100
How the marketing mix evolves How the marketing mix evolves over timeover time
The marketing mix will evolve over time. For example:
The product portfolio may grow as a business becomes more established
More expensive promotional activities may be adopted as a firm’s revenue increases
More outlets may be opened, or products sold via the internet
Price may increase as demand grows
THE TIMES 100
Marketing mix in contextMarketing mix in context
THE TIMES 100
Product range at McCainProduct range at McCain
McCain Food’s product range includes frozen vegetables, ready meals and desserts; McCain is also the world’s leading manufacturer of frozen potato products such as Oven Chips. What factors have driven changes in the product range?
Use the McCain Food’s case study to help you
THE TIMES 100
Pricing at McCain FoodsPricing at McCain Foods
McCain uses a range of pricing strategies associated with adding value for money. One of the factors it must consider is how much the consumer will be prepared to pay.
Why do you think consumers will pay more for Oven Chips than it would cost them to buy the potatoes and oil to prepare chips themselves?
THE TIMES 100
McCain distribution channelsMcCain distribution channels
McCain sells its products to both wholesalers and retailers. Draw these distribution channels.
How does McCain reduce the environmental impact of transporting its products?
Use the case study to help
THE TIMES 100
Promotion of McCain productsPromotion of McCain products
Are the following promotional methods used by McCain above-the-line or below-the-line?
TV advertisementsDiscount vouchersAdvertisements on supermarket trolleysE-mail newsletterLeaflet drops
THE TIMES 100
Useful resourcesUseful resources
Marketing mix lesson suggestions and activities (The Times 100)
McCain case study (The Times 100)McCain website