Unit 7 - The Marketing Mix

Product

good or service characterized by tangible and intangible attributes that might satisfy a need or want

Pure commodity good

Used to make other goods

Pure goods

no associated services

Balance

Combination of both good and service

Pure services

Offers no tangible goods

Convenience products

• Widely available and inexpensive 

• Purchased frequently with minimal effort 

• Packaging → people look for something fancy

• Price → looking for cheaper options

• Availability → put them in as many places as possible

Shopping products

• Less widely available (i.e. selective distribution) and moderately priced 

• Purchased less frequently with moderate effort (comparison, research)

• Effective messaging → consumers can get information about your product during their research period 

• Positioning → emphasize that your product is superior to others

Specialty products

• Limited availability (i.e., low breadth of distribution) and high price 

• Purchased rarely, deliberately sought (low comparison)

• Targeted promotion → need a clear sense of who is buying your product and target your promotion material to your target market

• Build brand status → selling the exclusivity and luxury of your brand in general rather than just the product alone 

Unsought products

• Unknown to customers or undesirable to customers 

• Delay of benefits are common feature

• Extensive promotion (awareness, value, counter negative views)

Total product concept

The process of developing a product that helps to identify its major benefits

Core product

• Basic definition of a product 

• Fundamental benefits derived from using the product 

Actual product

• The product that is sold to customers 

• Point of product differentiation 

Augmented product

• Non-tangible, service-related features 

• Create a better customer experience

Cost-based pricing

setting prices based on the cost of manufacturing, distributing, and promoting a product

Value-based pricing

• Setting prices based on the customers’ perception of the product value

• focusing on how desirable our product is to our target market

Competition-based pricing

Setting prices based on the activities of competing organizations 

Penetration pricing

• Set a low initial price on a product, then increase the price → usually used for a new product that wants to gain initial attention

• Generates interest in new product 

• Attracts customers from competitors 

Skimming

• Set the highest initial price that consumers desiring the product are willing to pay, then lower the price once demand of these consumers are satisfied 

• Generates revenue early 

• Creates perception of high-quality 

Prestige pricing

• Product price is set high and remains high 

• Effective for products intended to be status symbols 

• Creates perception of high-quality 

Odd-even pricing

• Set prices a few dollars or cents under a target price 

• Creates the illusion of bargain 

• Promotes impulse and higher-volume purchases 

• Product may be perceived as being of lower quality

Loss leader pricing

• Susbet of products are priced below cost to stimulate the sales of other profitable goods 

• Can be short-term (e.g. black friday) or long-term (e.g., kids’ meals)

• Attracts customers and increases sales 

• Can attract “cherry picking” buyers

Independent retailer

• owned by an individual, family, or partnership

• owners are responsible for decision-making

• few retail locations

• higher prices due to lower stock

Corporate Chain

• numerous outlets under common ownership

• largely centralized control

• comparable shopping experience

• lower prices and larger inventory

Contractual System

• an agreement between an individual and a business to operate a retail location

• individual gains access to resources

• Business profits from the retail location

Place utility

• Placing products in locations where customer can most easily access them 

• Includes: convenient locations, online and in-person purchasing, pop-up stores

Possession utility

• Increasing ease of owning a product 

• Includes: numerous payment options, payment plans

Form utility

• Degree to which product and its design meets customer needs 

• Includes: customized products, product alterations, wider selection

Time utility

• Making products available when customers need them

• Includes: extended hours, fast delivery, streaming, seasonal items year-round

Sales promotion

• Provides short-term incentives to generate interest in a product 

  • Example: coupons, contests, rebates

• Encourages immediate purchase 

• May result in lower revenue

Public relations

• Activities meant to build and maintain a positive image for a brand or organization 

  • Includes: press releases, press conferences, content on websites/social media platforms

• Reflects a form of earned media - unpaid content generated about a product, brand, or organization

• Messaging can be seen as more objective and trustworthy 

• Limited control of messaging

Experiential/engagement marketing

• Create an interactive experience between customers and product/brand

• Consumers not viewed as passive message recipients 

• Can create an emotional connection to the product/brand (breeds customer loyalty)

Downside: taxing on time and resources

Advertising

• Paid form of media used to communicate to consumers about a product/brand 

  • Includes: billboards, print ads, tv commercials, radio commercials, online ads

• Controlled messaging → you have control of what the message says, how it looks, etc.

Shock appeals

• words, images, and/or actions intended to deliberately startle and offend

• intended to capture attention

Sexual appeals

• words, images, and/or actions intended to deliver a message designed to evoke sexual thoughts, feelings, and/or arousal in a target audience

• appears to attract consumer attention