MSM_Unit_3_Final

UNIT 3 MARKETING MIX

Definition of Marketing Mix

• A set of actions or tactics used by a company to promote its brand or product.

• Consists of the 4Ps: Price, Product, Promotion, and Place.

• The marketing mix is a combination of product offerings used to reach target markets.

• Represents optimum combinations of internal controllable marketing variables optimizing customer needs.

• All four elements are interrelated; decisions in one area affect actions in others.

• Marketing mix is dynamic, changing according to market conditions (customer demand, competition, etc.).

Elements of Marketing Mix

1. Product Mix

   • Definition: Sum of physical and psychological satisfaction provided to the buyer.

   • Components: Product range, brand, package, physical attributes, psychological benefits, warranty, service, special features.

   • Classification:

     • Based on tangibility: Tangible and Intangible.

     • Based on durability: Durable and Non-Durable.

     • Based on usage: Consumer and Industrial.

2. Price Mix

   • Definition: The monetary value of a product.

   • Considers consumer expectations (discounts, terms of credit).

3. Place Mix (Distribution Mix)

   • Smooth flow of goods from producers to consumers.

   • Includes channels of distribution and physical supply.

4. Promotion Mix

   • Persuasive communication about the product to prospective customers.

   • Two forms of communication:

     • Personal (Direct Selling)

     • Impersonal (Advertising, Sales promotion, Public relations).

PRODUCT

Definition of Product

• Comprises physical, economic, social, and psychological benefits offered to a market.

• Various forms are components that serve as selling points for that product:

  • Physical Attributes, Psychological Benefits, Brand, Brand Image, Warranty, Service, Special Features.

Classifications of Products

1. Consumer Goods:

   • Convenience Goods: Frequently purchased with minimal effort (e.g., bread, milk).

   • Shopping Goods: Compare quality, price, style before purchasing (e.g., clothing, furniture).

   • Specialty Goods: Unique features, significant brand identification (e.g., luxury cars).

   • Unsought Goods: Not commonly considered for purchase (e.g., insurance).

2. Industrial Goods:

   • Materials and Parts: Directly enter the finished product.

   • Capital Items: Long-lasting goods facilitating product development/managing the finished product.

Levels of a Product

1. Core Product: Basic need or want satisfied by consumption.

2. Generic Product: Basic attributes necessary for function.

3. Expected Product: Attributes expected by consumers.

4. Augmented Product: Additional factors setting the product apart from competitors.

5. Potential Product: Future augmentations and transformations expected.

Product Positioning & Strategy

• Process of identifying market segment needs and optimizing product strengths.

• Involves considering product plan characteristics such as product line, mix, branding, and packaging.

PRICING

Definition

• Method adopted by a firm to set selling prices based on average costs and customer's perceived value.

• Involves factors influencing marketing decisions, sales volume and profit margins, and product image.

Importance and Objectives of Pricing

• Vital importance due to its influence on production, distribution, consumption.

• Objectives include:

  1. Early Cash Recovery

  2. Survival

  3. Preventing Competition

  4. Price Profit Satisfaction

  5. Market Share

  6. Sales Maximization and Growth

Pricing Methods

1. Cost Oriented Pricing: Mark-up, full cost, marginal pricing, break-even pricing.

2. Customer Demand Oriented Pricing: Market skimming, penetration pricing, stabilizing strategy.

3. Competition Oriented Pricing: Right pricing, market plus, market minus pricing.

PLACE / MARKETING CHANNELS

Definition of Channels of Distribution

• Set of interdependent organizations involved in making a product/service available for consumption.

• Involves intermediaries like agents, wholesalers, distributors, and retailers.

Types of Distribution Strategies

1. Manufacturer-Consumer (Direct Sale)

2. Manufacturer-Retailer-Consumer

3. Manufacturer-Agent-Wholesaler-Retailer-Consumer

Factors Affecting Channel Choice

• Market related factors, product factors (perishability, nature, seasonality, unit value), company factors (financial strength, control, past experience), channel related factors, and environmental factors.

PROMOTION

Definition

• Promotion is the persuasive communication aimed at informing, persuading, and reminding consumers about products.

• It involves selecting appropriate promotional mix elements: Advertising, Sales Promotion, Public Relations, Direct Marketing.

Objectives and Types of Promotion

• To inform, persuade, and create awareness.

• Types:

  • Advertising: Paid non-personal communication.

  • Sales Promotion: Short-term incentives.

  • Public Relations: Focuses on maintaining a favorable company image.

  • Direct Marketing: Interactive approach for personalized customer engagement.

CONCLUSION

• The marketing mix combines essential strategies in product marketing, pricing, distribution, and promotion to meet organizational objectives, enhance customer satisfaction, and secure competitive advantage.