4.3 The marketing mix 4Ps

Stages of Product Development

generate ideas, analyse potential product ideas, develop product, test market, launch product

Product includes:

variety, quality, design, features, brand, packaging, services

What are the different product levels

Core product- main benefit/purpose

Actual product - features, quality, brand name, packaging

Augmented product - additional services, warranties

Factors influencing packaging

Protection of fragile goods, environment, convenience, cost effective, design, info

Product life cycle

introduction, growth, maturity, decline

introduction stage

a new product is first distributed and made available for purchase

Growth stage

Sales and market share increase as product becomes more popular

Maturity stage

Sales stabilise and market is saturated (additional growth is difficult)

Decline stage

product's sales decline, consumer needs change, new tech and products in the market

Boston Matrix purpose

Help businesses decide which products to invest in

Categories of Boston matrix

stars, cash cows, question marks, dogs

Stars

high growth, high market share

Cash cow

low growth, high market share

Question marks

high growth, low market share

Dogs

low growth, low market share

Different pricing strategies

Penetration pricing, economy pricing, price skimming, psychological pricing, premium pricing, competitor pricing, cost plus/mark up pricing,

Penetration pricing and aim

Short term strategy that starts at a low price then slowly increases. Aim is to gain market share

Economy pricing?

Product has low costs for the business , sales price is low, sales demand high

Price skimming

High price and high demand, price decreases with demand

When is price skimming used?

When product has a USP (unique selling point) or competitive advantage

Psychological pricing

Eg. $4.99 instead of $5

Premium pricing

High selling price, high quality, luxury goods, high demand

Competitor pricing

Based on competitors pricing

Cost-plus pricing (markup pricing)

Product cost + profit margin = selling price

Weaknesses of mark up pricing?

Does not consider market or competition

What does place include?

Distribution, delivery, location

What is a distribution channel

The route taken by a product from the producer to the customer.

Types of distribution channels

-direct : producer to consumer

-indirect : intermediary such as retailer and wholesaler and agent

Benefits of direct and indirect distribution

Direct distribution allows control and profit margins, indirect distribution expands market reach and convenience

Retailer

Businesses that buy goods from producers to sell to consumers

Types of retailers

Independents (small shops, many owned by sole traders), Supermarkets, Department stores, chain stores, kiosks (street vendors), online retailers

online distribution

the supply of goods through the Internet

Benefits to consumers of online distribution

Cheaper, 24/7 shopping, huge amount of choice, shop anywhere

Benefits to businesses of online distribution

E-tailers do not have store operator costs, lower start up costs, more choice in location

Disadvantages to businesses of online distribution

High competition because of cheapness, lack of human contact, reliance on delivery services, technical problems

Disadvantages to consumers of online distribution

Cannot touch/look at products, delivery problems, customers who have no internet/credit cards are excluded, scams

Distribution methods

Direct selling B2C, producer to retailer to consumer, producer to wholesaler to retailer to consumer (for wider distribution), agents/brokers to producer to consumer (link buyers to sellers, eg. travel agents, real estate agents)

Influences of choosing distribution decisions

Nature of product, target market, cost, control

Objectives of promotion

informing, persuading, reminding, brand image

Different types of promotion

Above-the-line promotion - media, newspaper, magazine, tv, radio, ads on websites

Below-the-line promotion - press, coupons, discounts, direct mailing, point of sale displays

Factors affecting promotion strategy

Budget, target market, competition, stage in product life cycle

Types of promotion

Traditional advertising, sales promotion (discount, coupon, free sample), PR, direct marketing (emails, personalised messages), personal selling (face to face), sponsorship, digital marketing