Marketing Mix

Cameron Stevenson

The What and Why

The Marketing mix is the blend of the four marketing elements of a product.

Very important for your business Products wont succeed without marketing

If the consumer doesn’t know it they wont buy it

Four Marketing Elements

Product Distribution Price Promotion

Product

The item(s) you sell is your products. Product mix- products and services a

business sells Product Features Product or Service Positions

Distribution

How to get the products and getting your product in the consumers hands.

Channels of Distribution (Retail) Receiving the Goods Channels of Distribution (Service) Channels of Distribution (Manufacturing Busi

ness) Physical Distribution

Channels of Distribution (Retail)

Tips for distribution: Open hours convenient for customer Catalogs, fliers, and other

advertisements Orders by phone or fax and do the

shipping Create a website

Receiving the Goods

All business must receive goods from suppliers

List for locating distributors, wholesalers, and manufacturers American Wholesalers and

Distributors Directory Thomas Register AT&T’s Business Buyer’s

Guide Magazines

Channels of Distribution (Service)

Deal directly with customer

Service needs to be available when the customer wants it

Keep customers in mind

Channels of Distribution (Manufacturing)

Make products to sell to other businesses Possibly use all channels of distribution Possibly use special channels of

distribution

Physical Distribution

Transportation, storage, and handling of products

Transportation Airplane, pipeline, railroad,

ship, truck, or combination

Storage and Handling Warehouses, shipyards, etc. Packaging protects product

Price

The dollar value of a product where revenue should exceed the expense.

Objectives Determining the Price Pricing a Service Psychology of Pricing

Objectives

What do you want the price to do? Maximize sales Attract customers Discourage competition

Return on investment Percentage return from what they invested

Obtaining a market share Percentage of total sales in the market Attracting customers from competitors

Determining a Price

Demand-based pricing Pricing determined by how much customer will

pay Cost-based pricing

Price using wholesale cost to determine price charge

Markup- amount added to wholesale cost Use markdown when buying to much of a product

Determining a Price cont.

Competition-based pricing Pricing based off competitors price

Charge the same or less? Up to you.

Pricing a Service

Cost of items, effort, and time must be considered

Time-based pricing Amount of time to complete the service

Bundling Combining prices together instead of several prices

Breakeven point Based on the cost of items used by seller No profit no loss

Breakeven Point

Revenue equals the cost of producing and distributing a product or service Fixed cost- cost to the business that never changes Variable cost- cost that relates directly to the number

of the products sold Selling price- price expected to sell the product at

Fixed Cost / (Selling Price-Variable Cost) = Breakeven Point

Breakeven Point Example

Fixed Cost / (Selling Price-Variable Cost) = Breakeven Point

($10,00) ( ) ( )

Psychology of Pricing

Perception of Savings- people pay more attention to $.99 tags than $1.00 tags

Perception of Value- consumers flock to bundled products thinking they can save much more money

Perception of Discounts- discount prices rarely fail in attracting customers

Perception of Unbundling- availability of payments makes the price seem cheaper

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Promotion

Communication used to inform, persuade, or remind.

The advertisement selected to show potential consumers the product.

Promotional Mix Advertising

New Advertising Sales Promotion Publicity Personal Selling Promotional Plan

Inform

Provide information about a new product

Provide information about a changed product

Used in introduction stage of product lifestyle

Customers may make more intelligent purchase decision

Persuade

Encourages the customers to take a specific action

Not negative Show advantages over

competitors product May need coupons,

rebates, or free samples

Remind

Re tells about the product

Keeps the life cycle on going

Package new product in old boxes as a reminder of old times

Advertising

Television, radio, newspaper, direct-mail, magazine, outdoor, telephone directory, and transit

Most common promotional type

Nearly everywhere

Developing an Advertising Plan

Advertising cont.

Advantages Reaches many

people Message can be

repeated

Disadvantages Can be costly Sometimes to

broad of an audience

New Advertising

Mobile Thousands everyday

Social Network Facebook Myspace Twitter

Internet QR Code

For more information click here! (Source)

New Advertising cont.

Five most powerful online advertising Search engine Website Free re-print promotional articles Ezine Pay-per-click

For more information click here! (Source)

QR Codes

Two-dimensional barcode (matrix code)

Scan like a barcode and get information stored in the coding

Sales Promotion

Offer a customer direct incentive to buy

Coupons, sweepstakes, contest, rebates, and free samples

Sales Promotion cont.

Advantages Generates immediate

short-term sales Used to support other

parts of promotion

Disadvantages Costly May not succeed so

you loose money

Publicity

Transmitted through mass medium Non-paid communication about a business

Advantages Goodwill created for product Can be cheap

Disadvantage Organization has little control over it

Personal Selling

Person to person effort to inform, persuade, or remind a customer

Advantage Personal contact Immediate customer feedback

Disadvantages Per-person cost High cost per customer Every encounter doesn’t make a sale

Promotional Plan

Analyze the Market Identify Target Market Develop Promotional Objectives Develop Promotional Budget Select Promotional Mix Implement Promotional Plan Evaluate Results

Analyze the Market

Conduct market research

Identify the Target Market

Information obtained from analysis helps determine target market

Segmentation of market helps to identify needed promotional strategies

Develop Promotional Objectives

Identify purpose or expected result of promotion

Based on completed market research Flexible and reviewed periodically

Develop Promotional Budget

Done with leftover money Careful planning and

managerial commitment needed

Based on expenses from previous year

Select Promotional Mix

Reach target market, achieve organizational objectives, remain within budgetary guidelines

Decides: Advertising Personal selling Publicity Sales promotion

Implement Promotional Plan

Naming people and departments responsible for implementation of product sections

Specific dollar amounts associated with each activity

Evaluate Results

Evaluate strategies to see if they should be: Continued Altered Redone

Research on customers before and after product usage

Developing an Advertising Plan

Set Objectives Determine the Budget Develop the Theme Select Media Create the Advertisement Develop the Ad Schedule Evaluate Effectiveness

Set Objectives

Desired results Specific message to be communicated Target audience Specific period of time

Very detailed and measurable

Determine the Budget

Decide what you can afford Percentage of Sales

Bugets a percentage of past, present, or projected sales

Competitive Matching Spend similar amounts to competitors

Develop the Theme

Idea, appeal, or benefit around which all advertising messages in a plan revolve

Select Media

Type and the actual media Major media:

T.V., radio, newspapers, and magazines Analyze cost, reach, frequency, and lead time

Create the Advertisement Reach target market, be consistent, reflect chosen

theme, fit within budget. Slice-of-Life Fantasy Musical Technical Expertise Testimonial Lifestyle Mood or Image Character Scientific Evidence

Slice-of-Life

People using the product in an everyday setting

Fantasy

Fantasy about using the product Ex- Women combining themselves

to follow you is a fantasy

Musical

People or characters singing about the product

Technical Expertise

Manufacture or producer explaining how product was made

Testimonial

Celebrities or everyday people endorsing product

Lifestyle

Shows product or lifestyle in relation to a lifestyle

Mood or Image

Portrays a specific emotion

Character

Fictitious characters to represent a product

Scientific Evidence

Uses actual information on why the product is superior

Develop the Add Schedule

Continuity The ad will be scheduled regularly

Pulsing Increase advertising efforts during a specific

period of time

Evaluate Effectiveness

Measuring how well the advertising plan achieves its original objectives

In coupons, rebates, etc. evaluate the usage rate

Evaluate during use and development of ad

Regulating Advertising

State, local, and federal regulations Must be honest FTC and FCC main organizations that govern

advertisement The following link contains the regulations