4.5 Marketing Mix | Quizlet

Extended Marketing Mix

Product

Price

Place

Promotion

People

Processes

Physical Evidence

Brand Awareness

The Ability of consumers to recognize a firm's product or service ahead of their competitors. There may be little difference between the product, but the brand can make the difference.

Brand Development

Any action taken to improve or strengthen a brand's image in the eye of the consumer. It is a way of enhancing brand awareness of a product by increasing the power of its name, symbol or sign - this can lead to higher sales and market share.

Brand Loyalty

When a consumer becomes committed to one firm's brand and is willing to buy repeatedly from that firm. Successful businesses will often employ a variety of marketing strategies to cultivate loyal customers. In doing so, these businesses develop brand ambassadors.

Brand Value

How much a brand is worth in terms of reputation, potential income and market value. Brand value is the extra money a business can make from its products because of its brand name.

Cost-Plus Pricing

A pricing strategy where a business adds a fixed percentage mark-up to the average cost of producing a product to determine its selling price. The mark-up represents the desired profit margin per unit sold.

Penetration Pricing

A strategy where a firm sets a low initial price for a product, supported by strong promotion, to attract customers and gain market share. Once a large customer base is established, the price may be gradually increased to improve profitability.

Loss Leader Pricing

A strategy where a business sells a product below its cost price to attract customers, encouraging them to purchase additional higher-margin items. It is commonly used by large retailers to increase foot traffic and overall sales but can disadvantage smaller competitors.

Predatory Pricing

A strategy where a firm deliberately sets very low prices to drive competitors out of the market and create barriers to entry. It is considered an anti-competitive and often illegal practice in many countries as it unfairly disadvantages new businesses that enter the market.

Premium Pricing

A strategy where a business sets a high price for its product to create the perception of superior quality, exclusivity, or prestige. This pricing method is sustained over time and targets consumers who are willing to pay more for perceived higher value.

Promotion

Promotion is concerned with communicating information about a firm's products to consumers. The main aim of promotion is to obtain new customers or to retain existing ones. Promotional activities should be communicated clearly to consumers and provide useful information to enable them to purchase a firm's product.

Choosing a Promotional Method Considerations

Cost

Legal framework

Target market

Stage in the product life cycle

Type of product

Above The Line Promotion (ATL)

Refers to mass media marketing strategies aimed at reaching a wide audience through channels such as television, radio, newspapers, magazines, billboards, and online ads. It focuses on brand awareness rather than direct targeting of specific customers.

ATL Promotion Types

Informative Advertising

Persuasive Advertising

Reassuring Advertising

Below The Line Promotion (BTL)

Refers to direct and targeted marketing activities that focus on specific consumer segments rather than mass media. It includes personal selling, direct mail, sponsorships, sales promotions, and digital marketing, aiming to create a more personalized and measurable impact.

BTL Promotion Types

Direct marketing

Personal selling

Public relations (PR)

Sales promotions

Through The Line Promotion (TTL)

A marketing strategy that combines both ATL and BTL promotional methods to create an integrated approach. It uses mass media advertising (ATL) for broad reach and direct, targeted marketing (BTL) for engagement and conversion, ensuring a more comprehensive and effective promotional campaign.

TTL Promotion Types

360-Degree Marketing

Digital marketing

Social Media Marketing (SMM)

Place

The distribution strategy a business uses to make its products available to consumers in the right location at the right time. Decisions about place are concerned with how products should pass from manufacturer to the final customer.

Distribution Channels

The chain of intermediaries a product passes through from producer to the final consumer, we can have direct selling, single-intermediary channels, or single intermediary channels.

Direct Selling (No Intermediaries)

A business sells its products or services directly to consumers without the use of intermediaries such as wholesalers or retailers. (Producer -> Consumer )

Advantages of Direct Selling

Low cost

Fast

Ideal for perishable products

Producer is key decision maker

Customer relationships

Disadvantages of Direct Selling

Promotion done by producer might be expensive

Sorage and delivery costs

Single Intermediary Channel

A distribution strategy where a manufacturer sells its products to consumers through one intermediary, typically a retailer or distributor. (Producer -> Retailer -> Consumer).

Advantages of Single Intermediary Channel

Retailers handle promotion and customer service

Stock-holding costs are covered by retailer

Retailers provide convenient product access for consumers

Disadvantages of Single Intermediary Channel

Higher prices due to retailer markups

Producer may lack control over promotions

Two-Intermediaries Channel

A distribution method where a producer sells its products to wholesalers, who then distribute them to retailers, before they reach the final consumers. (Producer -> wholesaler -> retailer -> consumer).

Advantages of Two-Intermediaries Channel

Wholesalers handle storage, reducing costs for producers.

Wholesalers divide large quantities into smaller batches for retailers.

Suitable for selling across long distances.

Disadvantages of Two-Intermediaries Channel

Multiple mark-ups make the product more expensive for consumers.

Producers have less control over marketing efforts.