IT EXPLAINS THE MARKETING MIX DECISIONS WITH PRODUCT DECISIONS INCLUDES PRODUCT LINE, WIDTH, DEPTH ETC

1. MARKETING MIXMARKETING MIX
•The marketing mix principlesThe marketing mix principles
(also known as the 4 p’s.) are(also known as the 4 p’s.) are
used by business as tools toused by business as tools to
assist them in pursuing theirassist them in pursuing their
objectivesobjectives

2. • The marketing mix principles are controllable variables,The marketing mix principles are controllable variables,
which have to be carefully managed and must meet thewhich have to be carefully managed and must meet the
needs of the defined target group.needs of the defined target group.
• marketing mix is apart of the organizations planningmarketing mix is apart of the organizations planning
process and consists of analyzing the following-process and consists of analyzing the following-
– How will you design, package and add value to the product.How will you design, package and add value to the product.
Product strategies.Product strategies.
– What pricing strategy is appropriate to useWhat pricing strategy is appropriate to use Price strategies.Price strategies.
– Where will the firm locate?Where will the firm locate? Place strategies.Place strategies.
– How will the firm promote its productHow will the firm promote its product Promotion strategies.Promotion strategies.

3. PRODUCT STRATEGIESPRODUCT STRATEGIES
• When an organization introduces aWhen an organization introduces a
product into a market they must askproduct into a market they must ask
themselves a number of questions.themselves a number of questions.
• Who is the product aimed at?Who is the product aimed at?
• WhatWhat benefitbenefit will they expect?will they expect?
• How do they plan toHow do they plan to positionposition the productthe product
within the market?within the market?
• WhatWhat differential advantagedifferential advantage will thewill the
product offer over their competitors?product offer over their competitors?

4. • Kotler suggested that a product should be viewed in threeKotler suggested that a product should be viewed in three
levels.levels.
• Level 1: Core ProductLevel 1: Core Product . What is the core benefit your. What is the core benefit your
product offers?. Customers who purchase a camera areproduct offers?. Customers who purchase a camera are
buying more then just a camera they are purchasingbuying more then just a camera they are purchasing
memories.memories.
• Level 2 Actual ProductLevel 2 Actual Product : All cameras capture memories.: All cameras capture memories.
The aim is to ensure that your potential customersThe aim is to ensure that your potential customers
purchase your one. The strategy at this level involvespurchase your one. The strategy at this level involves
organizationsorganizations branding,branding, adding featuresadding features and benefits toand benefits to
ensure that their product offers a differential advantageensure that their product offers a differential advantage
from their competitors.from their competitors.
• Level 3: Augmented product:Level 3: Augmented product: What additional non-What additional non-
tangible benefits can you offer? Competition at this level istangible benefits can you offer? Competition at this level is
based around after sales service, warranties, delivery andbased around after sales service, warranties, delivery and
so on.so on.

6. Product DecisionsProduct Decisions
• Product designProduct design – Will the design be the selling point for the– Will the design be the selling point for the
organisation as we have seen with the iMAC, the new VW Beetle ororganisation as we have seen with the iMAC, the new VW Beetle or
the Dyson vacuum cleaner.the Dyson vacuum cleaner.
• Product quality:Product quality: Quality has to consistent with other elements ofQuality has to consistent with other elements of
the marketing mix. A premium based pricing strategy has to reflectthe marketing mix. A premium based pricing strategy has to reflect
the quality a product offers.the quality a product offers.
• Product featuresProduct features : What features will you add that may increase: What features will you add that may increase
the benefit offered to your target market? Will the organisation use athe benefit offered to your target market? Will the organisation use a
discriminatory pricing policy for offering these additional benefits?discriminatory pricing policy for offering these additional benefits?
• Branding:Branding: One of the most important decisions a marketingOne of the most important decisions a marketing
manager can make is about branding. The value of brands inmanager can make is about branding. The value of brands in
today’s environment is phenomenal. Brands have the power oftoday’s environment is phenomenal. Brands have the power of
instant sales, they convey a message of confidence, quality andinstant sales, they convey a message of confidence, quality and
reliability to their target market.reliability to their target market.

7. Pricing StrategiesPricing Strategies
• Pricing should take into account thePricing should take into account the
following factors:following factors:
• Fixed and variable costs.Fixed and variable costs.
• CompetitionCompetition
• Company objectivesCompany objectives
• Proposed positioning strategies.Proposed positioning strategies.
• Target group and willingness to pay.Target group and willingness to pay.

8. Pricing StrategiesPricing Strategies
• Penetration pricingPenetration pricing : Where the organisation: Where the organisation
sets a low price to increase sales and marketsets a low price to increase sales and market
share.share.
• Skimming pricingSkimming pricing : The organisation sets an: The organisation sets an
initial high price and then slowly lowers the priceinitial high price and then slowly lowers the price
to make the product available to a wider market.to make the product available to a wider market.
The objective is to skim profits of the marketThe objective is to skim profits of the market
layer by layer.layer by layer.
• Competition pricingCompetition pricing : Setting a price in: Setting a price in
comparison with competitors.comparison with competitors.

9. • Product Line Pricing:Product Line Pricing: Pricing differentPricing different
products within the same product range atproducts within the same product range at
different price points. An example would be adifferent price points. An example would be a
video manufacturer offering different videovideo manufacturer offering different video
recorders with different features at differentrecorders with different features at different
prices.prices.
• Bundle Pricing:Bundle Pricing: The organisation bundles aThe organisation bundles a
group of products at a reduced price.group of products at a reduced price.
• Psychological pricing:Psychological pricing: The seller here willThe seller here will
consider the psychology of price and theconsider the psychology of price and the
positioning of price within the market place.positioning of price within the market place.
The seller will therefore charge 99p insteadThe seller will therefore charge 99p instead
£1 or $199 instead of $200£1 or $199 instead of $200

10. • Premium pricingPremium pricing : The price set is high to: The price set is high to
reflect the exclusiveness of the product. Anreflect the exclusiveness of the product. An
example of products using this strategy would beexample of products using this strategy would be
Harrods, first class airline services,Harrods, first class airline services,
• Optional pricingOptional pricing : The organisation sells: The organisation sells
optional extras along with the product tooptional extras along with the product to
maximise its turnover. This strategy is usedmaximise its turnover. This strategy is used
commonly within the car industry.commonly within the car industry.

11. PlacePlace
Place strategiesPlace strategies
• Refers to how an organisation will distribute theRefers to how an organisation will distribute the
product or service they are offering to the endproduct or service they are offering to the end
user.user.
• What channel of distribution will they use?What channel of distribution will they use?
• Two types of channel of distribution methods areTwo types of channel of distribution methods are
available.available.
– Indirect distribution involves distributing your productIndirect distribution involves distributing your product
by the use of an intermediary.by the use of an intermediary.
– Direct distribution involves distributing direct from aDirect distribution involves distributing direct from a
manufacturer to the consumer e.g. For example Dellmanufacturer to the consumer e.g. For example Dell
ComputersComputers

12. INDIRECT
DISTRIBUTION
DIRECT
DISTRIBUTION

13. Distribution StrategiesDistribution Strategies
• Depending on the type of product being distributed there are three commonDepending on the type of product being distributed there are three common
distribution strategies available:distribution strategies available:
• 1. Intensive distribution1. Intensive distribution : Used commonly to distribute low priced or: Used commonly to distribute low priced or
impulse purchase products eg chocolates, soft drinks. impulse purchase products eg chocolates, soft drinks.
• 2. Exclusive distribution:2. Exclusive distribution: Involves limiting distribution to a single outlet.Involves limiting distribution to a single outlet.
The product is usually highly priced, and requires the intermediary to placeThe product is usually highly priced, and requires the intermediary to place
much detail in its sell. An example of would be the sale of vehicles throughmuch detail in its sell. An example of would be the sale of vehicles through
exclusive dealers.exclusive dealers.
• 3. Selective Distribution:3. Selective Distribution: A small number of retail outlets are chosen toA small number of retail outlets are chosen to
distribute the product. Selective distribution is common with products suchdistribute the product. Selective distribution is common with products such
as computers, televisions household appliances, where consumers areas computers, televisions household appliances, where consumers are
willing to shop around and where manufacturers want a large geographicalwilling to shop around and where manufacturers want a large geographical
spread.spread.
• If a manufacturer decides to adopt an exclusive or selective strategy theyIf a manufacturer decides to adopt an exclusive or selective strategy they
should select a intermediary which has experience of handling similarshould select a intermediary which has experience of handling similar
products, credible and is known by the target audience.products, credible and is known by the target audience.

14. Promotion StrategiesPromotion Strategies
• A successful product or service means nothing unless the benefit ofA successful product or service means nothing unless the benefit of
such a service can be communicated clearly to the target market.such a service can be communicated clearly to the target market.
An organisations promotional strategy can consist of:An organisations promotional strategy can consist of:
• Advertising: Advertising: Is any non personal paid form of communicationIs any non personal paid form of communication
using any form of mass media.using any form of mass media.
• Public relations:Public relations: Involves developing positive relationships withInvolves developing positive relationships with
the organisation media public. The art of good public relations is notthe organisation media public. The art of good public relations is not
only to obtain favorable publicity within the media, but it is alsoonly to obtain favorable publicity within the media, but it is also
involves being able to handle successfully negative attention.involves being able to handle successfully negative attention.
• Sales promotion:Sales promotion: Commonly used to obtain an increase in salesCommonly used to obtain an increase in sales
short term. Could involve using money off coupons or special offers.short term. Could involve using money off coupons or special offers.
• Personal selling:Personal selling: Selling a product service one to one.Selling a product service one to one.
• Direct Mail:Direct Mail: Is the sending of publicity material to a named personIs the sending of publicity material to a named person
within an organisation. There has been a massive growth in directwithin an organisation. There has been a massive growth in direct
mail campaigns over the last 5 years.mail campaigns over the last 5 years.

15. Message StrategyMessage Strategy
• What message are you trying to put accross toWhat message are you trying to put accross to
your target audience?.your target audience?.
• How will you deliver that message? Will it beHow will you deliver that message? Will it be
through the appropiate use of branding?through the appropiate use of branding?
• logos or slogan design?.logos or slogan design?.
• The message should reinforce the benefit of theThe message should reinforce the benefit of the
product and should also help the company inproduct and should also help the company in
developing the positioning strategy of thedeveloping the positioning strategy of the
product.product.

16. Media StrategyMedia Strategy
• Media strategy refers to how the organisation is going toMedia strategy refers to how the organisation is going to
deliver their message.deliver their message.
• What aspects of the promotional mix will the companyWhat aspects of the promotional mix will the company
use to deliver their message strategy.use to deliver their message strategy.
• Where will they promote?Where will they promote?
• Clearly the company must take into account theClearly the company must take into account the
readership and general behaviour of their targetreadership and general behaviour of their target
audience before they select their media strategy.audience before they select their media strategy.
• What newspapers do their target market read?What newspapers do their target market read?
• What TV programmes do they watch?What TV programmes do they watch?

17. Push & Pull StrategiesPush & Pull Strategies

18. push strategypush strategy
• AA push strategypush strategy is where the manufactureris where the manufacturer
concentrates some of their marketing effort onconcentrates some of their marketing effort on
promoting their product to retailers to convincepromoting their product to retailers to convince
them to stock the product.them to stock the product.
• A combination of promotional mix strategies areA combination of promotional mix strategies are
used at this stage aimed at the retailer includingused at this stage aimed at the retailer including
personal selling, and direct mail.personal selling, and direct mail.
• The product is pushed onto the retailer, henceThe product is pushed onto the retailer, hence
the name.the name.

19. pull strategypull strategy
• A pull strategyA pull strategy is based around theis based around the
manufacturer promoting their product amongstmanufacturer promoting their product amongst
the target market to create demand.the target market to create demand.
• Consumers pull the product through theConsumers pull the product through the
distribution channel forcing the wholesaler anddistribution channel forcing the wholesaler and
retailer to stock it, hence the name pull strategy.retailer to stock it, hence the name pull strategy.
• Organizations tend to use both push and pullOrganizations tend to use both push and pull
strategies to create demand from retailers andstrategies to create demand from retailers and
consumers.consumers.