Marketing Mix

1
Marketing Mix

• Marketing Plan
• Product
• Price
• Promotion
• Place

2
Marketing Mix

• Marketers have essentially four variables to use
  when crafting a marketing strategy and writing a
  marketing plan. They are price, promotion,
  product and distribution (also called placement).
  They are sometimes referred to as the four p's.

3
Marketing Mix

• A marketing mix is a combining of these four
  variables in a way that will meet or exceed
  organizational objectives. A separate marketing
  mix is usually crafted for each product offering.
  When constructing the mix, marketers must always
  be thinking of who their target market are.

4
Marketing Mix

• Mix coherency refers to how well the components
  of the mix blend together. A strategy of selling
  expensive luxury products in discount stores has
  poor coherency between distribution and product
  offering.

5
Marketing Mix

• In the long term, all four of the mix variables
  can be changed, but in the short term it is
  difficult to modify the product or the
  distribution channel. Therefore in the short
  term, marketers are limited to working with only
  half their tool kit. This limitation underscores
  the importance of long term strategic planning.

6
Marketing Mix

• Some commentators have increased the number of
  p's in the mix to 5, 6 or even 8. "People" is
  sometimes added, recognizing the importance of
  the human element in all aspects of marketing.
  Others include "Partners" as a mix variable
  because of the growing importance of colaberative
  channel relationships.

7
Marketing plan

• A Marketing Plan is a written document that
  details the actions necessary to achieve a
  specified marketing objective(s). It can be for a
  product or service, a brand, or a product line.
  It can cover one year (referred to as an annual
  marketing plan), or cover up to 5 years.

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Marketing plan
In general terms, it must

• describe and explain the current situation
• specify the expected results (objectives)
• identify the resources that will be needed
  (including financing, time, and skills)
• describe the actions that will need to be taken
  to achieve the objective(s)
• devise a method of monitoring results and
  adjusting the plan where necessary

9
Marketing plan
There are many formats for marketing plans and
every company does it a little different, but the
outline that follows is a very complete format.
Using this format will produce a 30 to 40 page
plan. Many companies prefer an abridged format
that would yield a 10 to 20 page plan.
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Marketing plan

• Title page
• Executive Summary
• Current Situation - Macroenvironment
• economy
• government
• legal
• technology
• ecological
• sociocultural
• supply chain

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Marketing plan

• Current Situation - Market Analysis
• market definition
• market size
• market segmentation
• industry structure and strategic groupings
• Porter 5 forces analysis
• competition and market share
• competitors' strengths and weaknesses
• market trends

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Marketing plan

• Current Situation - Consumer Analysis
• nature of the buying decision
• participants
• demographics
• psychographics
• buyer motivation and expectations
• loyalty segments

13
Marketing plan

• Current Situation - Internal
• company resources
• financial
• people
• time
• skills

14
Marketing plan

• objectives
• mission statement and vision statement
• corporate objectives
• financial objective
• marketing objectives
• long term objectives
• corporate culture

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Marketing plan

• Summary of Situation Analysis
• external threats
• external opportunities
• internal strengths
• internal weaknesses
• key success factors in the industry
• our sustainable competitive advantage

16
Marketing plan

• Marketing research
• information requirements
• research methodology
• research results

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Marketing plan - Product

• Marketing Strategy - product
• product mix
• product strengths and weaknesses
• perceptual mapping
• product life cycle management and new product
  development
• Brand name, brand image, and brand equity
• the augmented product

18
Marketing plan

• product portfolio analysis
• B.C.G. Analysis
• contribution margin analysis
• G.E. Multi Factoral analysis
• Quality Function Deployment

19
Marketing plan - Price

• Marketing Strategy - Price
• pricing objectives
• pricing method (eg. cost plus, demand based, or
  competitor indexing)
• pricing strategy (eg. skimming, or penetration)
• discounts and allowances
• price elasticity and customer sensitivity
• price zoning
• break even analysis at various prices

20
Marketing plan - Promotion

• Marketing Strategy - Promotion
• promotional goals
• promotional mix
• reach, frequency, flights, theme, and media
• sales force requirements, techniques, and
  management
• sales promotion
• publicity and public relations
• electronic promotion (eg. Web, or telephone)

21
Marketing plan - Place

• Marketing Strategy - Distribution
• geographical coverage
• distribution channels
• physical distribution and logistics
• electronic distribution

22
Marketing plan

• Implementation
• personnel requirements
• assign responsibilities
• financial requirements
• management information systems requirements
• month-by-month agenda
• pert or critical path analysis
• monitoring results and benchmarks
• adjustment mechanism
• contingencies (What if's)

23
Marketing plan

• Financial Summary
• assumptions
• pro-forma monthly income statement
• contribution margin analysis
• breakeven analysis
• Monte Carlo analysis

24
Marketing plan

• Appendix
• pictures and specifications of the new product
• results from research already completed

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Pricing

• Pricing is one of the four aspects of marketing.
  The other three parts of the marketing mix are
  product management, promotion, and distribution.
  It is also a key variable in microeconomic price
  allocation theory.

26
Pricing
Pricing involves asking questions like

• How much to charge for a product or service?
• What are the pricing objectives?
• Do we use profit maximization pricing?
• Do we use profit maximization pricing?
• How to set the price? (cost-plus pricing,
  demand based pricing, rate of return pricing, or
  competitor indexing)

27
Pricing

• Should there be a single price or multiple
  pricing?
• Should prices change in various geographical
  areas, referred to as zone pricing?
• Should there be quantity discounts?
• What prices are competitors charging?
• Do you use a price skimming strategy or a
  penetration pricing strategy?
• What image do you want the price to convey?
• Do you use psychological pricing?

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Pricing

• How important are customer price sensitivity and
  elasticity issues?
• Can real-time pricing be used?
• Is price discrimination or yield management
  appropriate?
• Are there legal restrictions on retail price
  maintenance, price collusion, or price
  discrimination?
• Do price points already exist for the product
  category?

29
Pricing

• How flexible can we be in pricing? The more
  competitive the industry, the less flexibility we
  have.
• The price floor is determined by production
  factors like costs, economies of scale, marginal
  cost, and degree of operating leverage
• The price ceiling is determined by demand factors
  like price elasticity and price points

30
Pricing

• Are there transfer pricing considerations?
• What is the chance of getting involved in a price
  war?
• How visible should the price be? - Should the
  price be neutral? (ie. not an important
  differentiating factor), should it be highly
  visible? (to help promote a low priced economy
  product, or to reinforce the prestige image of a
  quality product), or should it be hidden? (so as
  to allow marketers to generate interest in the
  product unhindered by price considerations).

31
Pricing

• Are there joint product pricing considerations?
• What are the non-price costs of purchasing the
  product? (eg. travel time to the store, wait
  time in the store, dissagreeable elements
  associated with the product purchase - dentist -gt
  pain, fishmarket -gt smells)
• What sort of payments should be accepted? (cash,
  cheque, credit card, barter)

32
Pricing
A well chosen price should do three things

• achieve the financial goals of the firm (eg.
  profitability)
• fit the realities of the marketplace (will
  customers buy at that price?)

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Pricing

• support a products positioning and be consistent
  with the other variables in the marketing mix
• price is influenced by the type of distribution
  channel used, the type of promotions used, and
  the quality of the product
• price will usually need to be relatively high if
  manufacturing is expensive, distribution is
  exclusive, and the product is supported by
  extensive and promotional campaigns
• a low price can be a viable substitute for
  product quality, effective promotions, or an
  energetic selling effort by distributors

34
Pricing
From the marketers point of view, an efficient
price is a price that is very close to the
maximum that customers are prepared to pay. In
economic terms, it is a price that shifts most of
the consumers surplus to the producer. The
effective price is the price the company receives
after accounting for discounts, promotions, and
other incentives.
35
Pricing
A loss leader is a product that has a price set
so low that it acts as a promotional device and
draws customers into the store. Promotional
pricing refers to an instance where pricing is
the key element of the marketing mix.
36
Pricing
The price/quantity relationship refers to the
perception by most consumers that a relatively
high price is a sign of good quality. The belief
in this relationship is most important with
complex product that are hard to test, and
experiential products that cannot be tested until
used (such as most services).
37
Pricing
The greater the uncertainty surrounding a
product, the more consumers depend on the
price/quantity hypothesis and the more of a
premium they are prepared to pay.
38
Premium pricing
Premium pricing (also called prestige pricing) is
the strategy of pricing at, or near, the high end
of the possible price range. People will buy a
premium priced product because

• They believe the high price is an indication of
  good quality

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Premium pricing

• They believe it to be a sign of self worth -
  "They are worth it" - It authenticates their
  success and status - It is a signal to others
  that they are a member of an exclusive group and
  
• They require flawless performance in this
  application - The cost of product malfunction is
  too high to buy anything but the best - example
  heart pacemaker

40
Demand based pricing

• Demand based pricing refers to any of the pricing
  methods that use consumer demand as the central
  element. These include price skimming, price
  discrimination and yield management, price
  points, psychological pricing, bundle pricing,
  penetration pricing, price lining, and premium
  pricing.

41
Promotion

• Promotion is one of the four aspects of
  marketing. The other three parts of the marketing
  mix are product management, pricing, and
  distribution. Promotion is comprised of four
  subcategories
• personal selling
• sales promotion
• publicity and public relations

42
Sales
Sales, or the activity of selling, forms an
integral part of commercial activity. As a
practical implementation of marketing, it often
forms a separate grouping in a corporate
structure, employing separate specialist
operatives known as salesmen (singular salesman
or salesperson).
43
Sales
The primary function of sales is to find and
close leads, turning propective customers into
actual ones. From a marketing point of view,
selling is one of the methods of promotion used
by marketers. Other promotional techniques
include , sales promotion, publicity, and public
relations.
44
Sales
Moral strictures applied to marketeers often
apply even more vigorously to those in sales.
People selling second-hand cars, real estate or
encyclopedias (of the non-Wikipedia variety)
often come in for particular disdain. Sellers of
snake oil have become stock figures for mirth at
their quackery they merge with the category of
the confidence trickster or the carny.
45
Sales
Small wonder that many organisations contract out
sales to end-users. Moral strictures applied to
marketeers often apply even more vigorously to
those in sales. People selling second-hand cars,
real estate or encyclopedias (of the
non-Wikipedia variety) often come in for
particular disdain.
46
Sales
Sellers of snake oil have become stock figures
for mirth at their quackery they merge with the
category of the confidence trickster or the
carny. Small wonder that many organisations
contract out sales to end-users.
47
Sales
Forms of selling include

• door-to-door
• multi-level
• direct
• mail-order
• telephone
• retail
• consignment

Also see Sales Planning and Operations
48
Sales promotion
In marketing, sales promotion is one of the four
aspects of promotion. The other three parts of
the promotional mix are , personal selling, and
publicity/public relations. Sales promotions are
non-personal promotional efforts that are
designed to have an immediate impact on sales.
49
Sales promotion
Sales promotion is media and non-media marketing
communications employed for a pre-determined,
limited time to increase consumer demand,
stimulate market demand or improve product
availability.
50
Sales promotion
Examples include

• coupons
• discounts and sales
• contests
• point of purchase displays
• rebates

51
Sales promotion
Sales promotions can be directed at either the
customer, your sales staff, or distribution
channel members (such as retailers). Sales
promotions targeted at the consumer are called
consumer sales promotions. Sales promotions
targeted at retailers and wholesalers are called
trade sales promotions.
52
Consumer Sales Promotion Techniques

• Price deal A temporary reduction in the price
• cents-off deal offers a brand at a lower price.
  Price reduction may be a percentage marked on the
  package
• price-pack deal The packaging offers a consumer
  a certain percentage more of the product for the
  same price (eg 25 more free)
• Coupons coupons have become a standard mechanism
  for sales promotions.

53
Consumer Sales Promotion Techniques

• Free Standing Insert (FSI). A coupon booklet is
  inserted into the local newspaper for delivery
• on-shelf couponing Coupons are present at the
  shelf where the product is available.
• checkout dispensers On checkout the customer is
  given a coupon based on products purchased

54
Consumer Sales Promotion Techniques

• on-line couponing Coupons are available on line.
  Consumers print them out and take them to the
  store.
• Rebates Consumers are offered money back if the
  receipt and packaging is mailed to the producer.
• contests/sweepstakes/games The consumer is
  automatically entered into the event by
  purchasing the product.

55
Consumer Sales Promotion Techniques

• Point-of-Sales displays
• Aisle interrupter A sign the juts into the aisle
  from the shelf
• Dangler A sign that sways when a consumer walks
  by it
• Dump Bin A bin full of products dumped inside
• Glorifier A small stage that elevates a product
  above other products
• Wobbler A sign that jiggles
• Lipstick Board A board on which messages are
  written in crayon
• Necker A coupon placed on the 'neck' of a bottle
  
• Y.E.S unit Your Extra Salesperson is a pull out
  fact sheet.

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Trade Sales Promotion Techniques include

• Trade Allowances short term incentive offered to
  induce a retailer to stock up on a product.
• Dealer Loader An incentive given to induce a
  retailer to purchase and display a product.
• Trade Contest A contest to reward retailers that
  sell the most product

57
Trade Sales Promotion Techniques include

• Point-of-purchase displays Extra sales tools
  given to retailers to boost sales
• Training Programs dealer employees are trained
  in selling the product
• Push Money also known as spiffs. An extra
  commission paid to retailer employees to push
  products.

58
Publicity
Publicity is one of the variables that comprise
the promotional mix. The other components of
promotions are , sales promotion, and personal
selling. Promotion is one of the variables that
comprise the marketing mix. The other three are
product management, pricing, and distribution.
59
Publicity
Publicity is closely related to public relations.
Whereas public relations is the management of all
communications between the firm and the general
public, publicity is the management of product or
brand related communications between the firm and
the general public.
60
Publicity
It is primarily an informative activity (as
opposed to a persuasive one), but its ultimate
goal is to promote the companies products,
services, or brands. A publicity plan is a
planned program aimed at obtaining favorable
press coverage for a companies products.
61
Publicity
The most basic tool of the publicist is the press
release, but other techniques include telephone
press conferences, in-studio media tours,
multi-component video news releases (VNRs),
newswire stories, and internet releases.
62
Publicity
For these releases to be used by the media, they
must be of interest to the public ( or at least
to the market segment that the media outlet is
targeted to). The releases are often customized
to match the media vehicle that they are being
sent to. Getting noticed by the press is all
about saying the right thing at the right time.
63
Publicity
A publicist is continuously asking what about you
or your company will pique the reader's curiosity
and make a good story? The most successful
publicity releases are related to topics of
current interest. These are referred to as news
pegs.
64
Publicity
An example is if three people die of water
poisoning, an alert publicist would release
stories about the technology embodied in a water
purification product.
65
Publicity
But the publicist cannot wait around for the news
to present opportunities. They must also try to
create their own news. Examples of this include

• Contests
• Walkathons
• Art exhibitions

66
Publicity

• Event sponsorship
• Arrange a speech or talk
• Make an analysis or prediction
• Conduct a poll or survey
• Issue a report
• Take a stand on a controversial subject
• Arrange for a testimonial

67
Publicity

• Announce an appointment
• Celebrate an anniversary
• Invent then present an award
• Stage a debate
• Organize a tour of your business or projects
• Issue a commendation

68
Publicity
The advantages of publicity are low cost, and
credibility (particularly if the publicity is
aired in between news stories like on evening TV
news casts). The disadvantages are lack of
control over how your releases will be used, and
frustration over the low percentage of releases
that are taken up by the media.
69
Public relations
Public relations (PR) is internal and external
communication (use of symbols and symbolic acts)
to inform or influence specific publics using
writing, marketing, advertising, publicity,
promotions, and special events.
70
Public relations
Some public relations specialists work as
full-time employees of companies, politicians,
nonprofit organizations, or governments while
others work for PR agencies that contract their
services to clients (usually corporations,
wealthy individuals or other special interests)
who pay for their expertise at keeping them in or
out of the spotlight, whichever is necessary.
71
Public relations
According to the Public Relations Society of
America (PRSA), one of the profession's leading
trade associations, public relations "has been
defined in many widely differing ways. Not
unsurprisingly sic, the earliest definitions
emphasized the roles of press agentry and
publicity since these were major elements from
which modern public relations grew."
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Public relations
More recently, the PR industry has pushed to
redefine itself as a management function. From a
more critical perspective, public relations is
sometimes also referred to as the manufacturing
of consent, following a phrase popularized by
Edward Herman and Noam Chomsky (see Manufacturing
Consent).
73
Public relations
The practice of public relations is often
disparaged using terms such as "spin," and public
relations practitioners are sometimes
characterized as "spin doctors" or "flacks."
74
Public relations
Table of contents 1 History2 The Industry
Today3 Ethical and Social Issues4 See also5
External links6 Books
75
Distribution (business)
Distribution is one of the four aspects of
marketing. The other three parts of the marketing
mix are product management, pricing, and
promotion. Distribution deals with how to get the
product or service to the customer. It must
answer questions such as

• What kind of distribution channel to use?

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Distribution (business)

• Should the product be sold through retailing?
• Should the product be distributed through
  wholesale?
• Should multi-level marketing channels be used?
• How long should the channel be (how many
  members)?
• Where should the product or service be available?

77
Distribution (business)

• When should the product or service be available?
• Should distribution be exclusive or extensive?
• Who should control the channel (referred to as
  the channel captain)?
• Should channel relationships be informal or
  contractual?

78
References
This Presentation is based on Fact Index
Adaptation by Finntrack
79
Distribution (business)

• Should channel members share (referred to as
  co-op ads)?
• Should electronic methods of distribution be
  used?
• Are there physical distribution and logistical
  issues to deal with?
• What will it cost to keep an inventory of
  products on store shelves and in channel
  warehouses (referred to as filling the pipeline)?