4.5 The seven P's of the marketing mix

Appropriate marketing mixes (AO3)

Product

Product

both physical (goods) and non-physical (services) items sold by a business or purchased by a customer.

Price

The value of a good or service that is paid by the customer.

promotion

The various marketing processes used to inform customers about a product and persuading them to purchase the product.

place

The marketing process of getting the right products to the right customers in the right place and at the right time

people

the importance of employee-customer relationships in the marketing of a service

processes

the importance of delivery processes in the marketing of a service processes of operations, managing customer feedback, and identifying consumer needs

• after-sales care

• value-added services

• payment systems

• delivery services

• queuing systems

physical evidence

the importance of tangible physical evidence in the marketing of a service

product life cycle

different stages that most products go through from their research and development (R&D) stage to their final removal from the market.

R&D

development of a product pre-launch

Intro

low profit and marketing is vital

Growth

exponential growth of sales

Maturity

sales revenue peaks, sales become saturated and extension strategies are considered

Decline

sales fall significantly, emergence of substitutes, eventual withdrawal of product

Extensions strategies

• reducing price

• different promotional strategies

• product modifications

• product differentiation Strategies

• rebranding

Boston matrix

outlines the product portfolio of a business, based on market share the product possesses and growth rate of the market that its in:

• star: high market share, high market growth, holding strategy

• problem child(?): high market share, low market growth, building strategy

• cash cow: low market share, high market growth, harvesting strategy

• dog: low market share, low market growth, divesting strategy

Brand

the registered name used to identify a product of a particular business organization.

Branding

marketing technique used to give a product/business a unique identity/name

Brand awareness

The degree of customer knowledge and recognition of a particular brand in order to gain more customers.

Brand development

communicating the value of a brand and what the brand stands for.

Brand loyalty

The degree of customer devotion to a particular brand

Brand value

The expected earning potential of a brand

Cost-plus pricing (or mark-up pricing)

Adds a profit margin to the costs of production, in order to determine the profits

penetration pricing

setting low prices so as to gain entry in a new market.

Loss leader pricing

Pricing a product below its cost of production so as to attract customers to also buy other items (with a higher profit margin).

Predatory pricing

charging a low price, sometimes even below the cost, so as to damage the sales of rivals.

Premium pricing

charging significantly higher prices than similar or competing products in the market.

Dynamic pricing

charging different prices based on the ability and willingness of customers to pay at a specific time

Competitive pricing

setting prices relative to competitors

Contribution pricing

setting the price of a product at a level higher than the direct costs. each sale earns the firm a positive contribution towards paying its indirect costs.

ATL

through independent consumer media, business does not have direct control over.

ATL PROMOTIONAL METHODS

• television

• radio

• cinema

• magazines

• newspapers

• outdoors: billboards, posters

• celebrity endorsements

BTL

form of promotion where the business has direct control with little dependance on external media agents

BTL PROMOTIONAL METHODS

• direct mail

• pr

• sponsorship

• point of sale promotion

• email

• customer loyalty Programme’s

• merchandising

• exhibitions

• sales promotions

TTL

combinations of ATL methods and BTL methods across multiple platforms, its a more integrated approach to reach more audience

TTL PROMOTIONAL METHODS

• 360 degree marketing (consistent message through use of all all and btl platforms)

• digital marketing (use of online marketing channels)

Zero-channel distribution network

no use of intermediaries / direct distribution

One-channel distribution network

involves the use of a single intermediary

Two-channel distribution network

involves the use of two intermediaries, usually wholesalers and retailers. good for mass produced products and when goods need to be distributed over long geographical distances

agents

independent intermediaries help to sell a vendor’s products in return for commission

retailers

commercial businesses that sell a manufacturer’s products directly to consumers.

wholesalers

intermediaries that buy products from a manufacturer and sell these in smaller quantities to retailers.

Three-channel distribution network

uses three intermediaries. It often involves an agent who sells the goods to wholesalers on behalf of the producer. In turn, wholesalers sell to retailers. often the case of agents selling products in overseas markets.