Marketing Mix
\ \ \ \ \ \ \ \ Introduction
\ A marketing plan is part of the overall business plan. The business plan has two main purposes: to guide the actions of the business and to encourage external stakeholders (like investors, suppliers and lenders) to become involved in the business. The marketing plan explains how your business is going to position itself in the market and to gain and keep customers. It also provides evidence to external stakeholders that your business has the chance of being profitable (and therefore worthy of investment or lending).
\ \ Marketing Objectives (Goals)
\ Before beginning the marketing plan you must clearly know what you are trying to achieve – these are your marketing objectives. Sometimes your marketing objectives are determined by where your product is in the Market Life Cycle (see below).
\ \ Your marketing goals should be recorded as “S.M.A.R.T.” goals:
\ \ Specific: The goal must be clearly stated so that it is clearly understood by all who need to know.
\ \ Measurable: We will have a way of measuring when we have achieved our goal. We will be able to say “yes – we have reached our goal” or “no – we have not achieved our goal”.
\ \ Achievable: The goal must be something that can be done within the stated timeframe.
\ \ Realistic: The goal must be something that can actually be reached.
\ \ Timely: There must be a deadline by when we want to have achieved the goal.
\ \ \ Target Market
\ Your target market is the particular group of people you are going to focus your marketing on. Very few businesses are big enough or diverse enough to target “everyone” as their target market. Even Google can only target those people who have access to the internet as a means of finding information.
\ \ This does not mean that people outside of your target market can’t or won’t buy your product, it just means that you are not going to focus on selling to them.
\ \ Typically, a business will define its target market by describing the distinguishing features of people it is going to focus its marketing on. These distinguishing features can include:
\ Gender
\ Ethnicity
\ Age range
\ Income range
\ Location
\ Spending habits
\ Lifestyles
\ \ \ The Marketing Mix
\ In this section you explain the process you are going to use to get potential customers to buy your product. This must be related to the features of your target market, your competition & market trends and your market research results. The marketing mix is made up of the 4 P’s. This section needs to be detailed – you must say what you are going to do and why you are doing it.
\ \ Product
\ In this part you explain what makes your product unique (its unique selling point)? What features of your product would make people want to buy it? Where does your product fit into the market life cycle (below)? How do you intend to brand your product to make it stand out from your competitors? How are you going to present/package your product?
\ \ Market Life Cycle
\ The market life cycle shows where a product currently sits in terms of the overall lifespan of the market. Typically markets go through FOUR distinct phases, based on levels of sales and profitability.
\ \ \ Stage 1: Introduction to the Market
\ This is the stage when a new product is developed and introduced to the market. For example, Apple introduced their tablet – the iPad – to the market for personal computing in 2010. The iPad was originally released as a link between the mobile phone and the computer. When the iPad there were no other tablets available.
\ Typical features of this stage of the market life cycle include:
\ Only a narrow range of products (initially just ONE)
\ Only a few businesses in the market (the original developer of the product dominating the market)
\ Product available in a limited number of retail or on-line outlets
\ Price is set to penetrate the market – establish a customer base
\ Advertising focuses on informing and educating potential customers about what the product does, how it works, how they can use it
\ The main focus of marketing is:
\ Develop a customer base
\ Customers gain an awareness of the product
\ Create demand for the product
\ \ Stage 2: Growth Period
\ At this stage of the market life cycle there is a rapid increase in sales and all firms in the market are able to achieve growing profits. The size of the market both in terms of businesses and customers is increasing.
\ Typical features of this stage of the market life cycle include:
\ Several different versions of the product are available
\ There are a growing number of businesses entering the market
\ Product available in a range of different retail or on-line outlets
\ Price is set to gain market share – new businesses use price to gain a share of the market (such as “introductory offer”) and existing businesses also use price to maintain their share (such as sales, easy credit terms)
\ Advertising by individual businesses focusses on stressing their competitive differences (product, service, location, price)
\ The main focus of marketing is:
\ Gain market share
\ Develop individual recognisable brands
\ Stress differences
\ \ Stage 3: Maturity
\ At this stage of the market life cycle the market has peaked in terms of sales, size of the market and profits for individual businesses.
\ Typical features of this stage of the market life cycle include:
\ A full range of the product are available
\ There are a large number of businesses established in the market
\ Product available in a wide range of different retail or on-line outlets
\ Price is set to defend market share – with businesses tending to match their competitors’ prices
\ Advertising focusses on reminding customers about brand name or image
\ The main focus of marketing is:
\ Maintain market share
\ Maintain brand image
\ Maintain brand loyalty
\ \ Stage 4: Decline
\ At this stage of the market life cycle the market is declining in terms of sales, size of the market and profits for individual businesses. The product has become “out of date” and customers are switching to newer products.
\ Typical features of this stage of the market life cycle include:
\ Only the best selling products remain in the market
\ Only a few businesses continue to make and sell the product
\ Product only available in a few retail or on-line outlets – typically specialist shops
\ Price is set to just stay profitable
\ There is minimal advertising
\ The main focus of marketing is:
\ Extracting the last remaining sales of the product
\ Moving the customers onto other products under the same brand
\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Price
\ In this part you explain what price are you going to sell your product for? This determines your position in the market? You explain how this price matches with your competitor and customer analysis’ and how it fits in with your production costs? You explainy our pricing strategy: economy, skimming, penetration or premium and why have you chosen this strategy? You decide if you are going to offer discounted prices for cash sales or to get rid of excess stock and if you are going to use price as a point of difference in your advertising.
\ \ \ \ \ Place
\ In this part you explain your distribution channel – how are your customers going to be able to access your product? The main distribution channels include:
\ Retail shop (where customers come to you directly to buy your product)
\ Third-party sales (where your product is sold to your customers through another retail outlet)
\ On-line sales (where your customers can buy your product on-line – usually through your website or a general on-line site for businesses)
\ \ Many businesses may choose to use more than one method, for example supermarkets now also have an on-line “click & collect” and “free delivery” service.
\ \ In this part you also identify the physical location of your main selling place going to be? You explain the strengths/weaknesses of this location. You need to know where your main competitors are locate and should look at where else you might try to sell your product.
\ \ \ \ \ \ \ \ Promotions
\ In this part you explain any promotions – free samples, competitions, giveaways, celebrity endorsements you will use and look at how you are going to set up and maintain a profile/image in the local community. Some of these promotions are called Price Competition (you are competing for customers by using lower prices). These include:
\ Sales (opening sales, birthday sales, boxing day sales, and so)
\ Buy-one-get-one free deals (effectively selling the goods at half price)
\ Interest free credit (this usually applies to high priced goods that can be bought on credit)
\ Loyalty cards (these usually offer a “free” item for bulk purchases… such as every 10th item purchased is free)
\ \ Some business deliberately do not have sales or discount their prices because they are trying to maintain an image for high quality products. Apple does not discount its phones even when it brings out a newer model.
\ \ Some promotions are called Non-price Competition because they uses methods other than lowering prices to attract customers. These include:
\ Free delivery
\ Free gifts (for example, buy a 65” tv and get a free sound bar)
\ Competitions (customers go into a draw to win a prize)
\ Free samples
\ Celebrity endorsement (getting someone “famous” to support the use of your product)
\ Sponsorship
\ Note: the cost of these methods are usually included in the price of the product so they don’t necessarily cost the business to use them. Effectively the customers pay for the promotions.
\ \ You explain the advertising you are going to do to inform potential customers about your product – television, radio, billboards, websites? You explain where, when & how you will advertise? You look at how you can achieve an on-line [internet or social media] presence.
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