AS2: Marketing mix

What is the marketing mix?

The way in which a business controls the elements yo ensure that their product or service is suitable for the potential customers.

The seven p's

- Product: The product or service that the customer buys.

- Price: The amount of money payed to purchase the product.

- Place: How the product was distributed to the customers.

- Promotion: How the customer was persuaded to buy the product.

- People: The people who make contact with customers in delivering the product.

- Process: The systems and processes that deliver a product to a consumer.

- Physical environment: The elements of the physical environment that the customer experiences.

What makes an effective marketing mix?

- Achieving marketing objectives

- Meeting customer needs

- Creating a competitive advantage

What is meant by the physical environment in the marketing mix?

Layout and design of premises, ambience, and ease of movement.

Examples:

- Location

- Hygiene factor

- Atmosphere

- Employee dress

What is meant by process in the marketing mix?

Transaction process, website design, and operational support.

Four examples of processes in the marketing mix

- Process for handling orders

- Process for marketing effectively

- Process for research and development

- Process for meeting the customer needs

Importance of E-Commerce

- Access to global market

- Better competitive position

- Permanent availability

- Economies of scale

Marketing mix consists of

- Industrial markets

- Consumer markets

- Product

- Price

- Promotion

- Place

- Business plan

Product Considerations

- Design

- Warranties

- Tailored to customer requirements

- Competitive advantage

- Quality

- Branding

- Packaging

Price Considerations

- Costs of production

- Profit margins

- Competition

- Season of the year

- Price elasticity

Promotion should be

- Informative

- Persuasive

- Reassuring

Promotion should include

- Incentives

- Public relations

- Marketing at point of sale

- Direct marketing

- Advertising

Give three examples of placement within the point of sale

- Similar products are placed together (e.g. biscuits), so that customers are able to make comparisons.

- Brightly coloured fruit and vegetable displays are visible from the outside of the stores.

- Popular products are given greater shelf space.

Examples of place in the marketing mix

- Wholesaler

-Internet

- Retailer

Distribution channel

A distribution channel moves a product through the stages from production to final consumption.

Main types of intermediary

1. Retailer

2. Wholesaler

3. Distributer

4. Agent

Main objective of distribution

To make products available in the right place at the right time in the right quantities.

Distribution is strongly influenced by the Nature of the Target market segment

- How does a business ensure that its products reach existing and potential customers?

- How and where do customers prefer to buy the products?

- How important the factors are such as stock availability, price, and pool?

Retailers

Businesses that sell directly to final consumers.

Types of Retail Stores

- Multiple chains owned by a single company.

- Department stores

- Independent stores

- Franchises

Advantages of retailers

- More convenience to customers.

- Often available nation wide for consumers.

- Retailers set the final price.

- Retailers deal with the transactions.

Whole salers

Wholesaler 'break bulk'

- They buy large quantities from the producers.

- They break the large quantities in to smaller ones to sell them to retailers.

Advantages of wholesaler

- Reduce producer's transport cost( less journeys taken to wholesaler than journeys to retailer)

- Retailers can order in smaller amounts from wholesalers.

- Wholesalers make money by buying at a cheaper price from the producer and adding a profit margin to the price paid by the retailer.

Mail order

To buy products, via catalogues, or delivery by mail.

Advantages of mail order

- Less capital required

- A wide market

- No risks of bad debts

- Consumer convenience

Disadvantages of mail order

- Colourful catalogues are expensive.

- Lack of personal contact

- Buyers rely wholly on catalogues to know about the goods. They cannot inspect the products before buying them.

Advantages of internet sales

- Easy to access global market

- Reduced overheads

- Potential for rapid growth

- Widen your market

Disadvantages of internet sales

- Website costs

- Security and fraud

- May lose customer's loyalty

Direct sales

- A method for selling goods and services directly to the consumers with out any intermediaries.

- Direct sales can take various forms, such as door-to-door, telemarketing, online, or home parties, with salespersons typically working on a commission basis.

Advantages of direct sales

1. Greater control: With direct sales, companies have greater control over the sales process, including pricing, promotion, and customer interactions.

2. Closer customer relationships: Direct sales enable companies to build closer relationships with their customers, which can lead to increased customer loyalty and repeat business.

3. Better customer feedback: Direct sales allow companies to receive direct feedback from customers, which can be used to improve products or services.

Disadvantages of direct sales

1. Higher costs: Direct sales can be more expensive than selling through intermediaries due to the costs of marketing, sales training, and managing a sales team.

2. Limited reach: Direct sales may not reach as many customers as selling through intermediaries, especially if the company does not have a large sales force.

3. Time-consuming: Direct sales can be time-consuming, as salespersons need to spend time building relationships with customers and making sales.

Choosing distribution channel

1. Producer--->Wholesaler--->Retailer--->Customer

2. Producer--->Agents--->Customer

3. Producer----------------------------->Customer

Note: each party in a distribution channel is called intermediary.