MARKETING MIX
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Learning objectives (L11/12)
Introduce the concept of the marketing mix
Describe the key features of each element of
the traditional mix, as:
Product
Price
 Place
 Promotions


And, of the 7Ps of the services mix.
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Borden HBR 1964
The Marketing Mix
Culliton 1948
Marketers as
“mixers of ingredients”
Green Mix- BPP
McCarthy 1950s
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Marketing Mix- 4Ps
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Marketing Mix- 4Ps
Figure1.5
Brassington & Pettitt
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Marketing Mix- 4Cs
Customer focus:
Customer benefits
Cost to customer
Convenience
Lauterborn 1990
Communication
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Undifferentiated Mix
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Differentiated Mixes
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Concentrated Mix
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Services Mix -7Ps
Any activity or benefit that one
party can offer to another…
that is essentially intangible…
and does not result in the
ownership of anything
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Services Mix -7Ps
INTANGIBLE… though there may be
some physical aspects
INSEPERABLE… from the provider
HETEROGENEOUS or VARIABLE
… from customer to customer
PERISHABLE… can’t store and sell later
NON-OWNERSHIP… no title deed
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Services Mix- 7Ps
People
people buy people
Processes
make it easy
Physical evidence
proxy for tangibility
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PRODUCT
The 4Cs marketing mix
Customer benefits
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Product dimensions
INTANGIBLE
CONSUMER GOODS
Durables/Semi-Durables
Convenience goods
Shopping goods
SERVICE
TANGIBLE
ATTRIBUTES
Speciality goods
Unsought goods
Kotler
INDUSTRIAL GOODS
Raw materials
Installations
Equipment
Components
Consumables
Services
Energy/Utilities
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Product Dimensions: car
INTANGIBLES
Marque, image, reputation, exclusivity, quality, reliability
SERVICE
Pre/after-sales, delivery, servicing,
repairs, HP & finance, warranty,
TANGIBLES
Physical aspects of size,
seats, colour, styling, mpg,
performance etc
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Product dimensions
POTENTIAL
INTANGIBLE
ACTUAL PRODUCT
Quality
Brand
Credit
Economy
Warranty
Auto-steer
Dibb et al
CORE
BENEFIT
Travel
Speed
Spec’n
Styling
Servicing
Trade-in
Staff
Delivery
Self repairing
Water fuel
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FAB: Product Benefits
People buy a bundle of benefits:
Features: what the product is
Advantages: what this does
Benefits: how the customer gains
FAB: Product Benefits
People buy a bundle of benefits:
Features: what the product is
FEATURE…this car has a seat belt
which
that…
Advantages:
whatmeans
this does
ADVANTAGE… it secures you in a crash
which
that…
Benefits: how
themeans
customer
gains
BENEFIT…. you don’t get injured
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FAB: Product Benefits
Multiple advantages & benefits:
FEATURE
ADVANTAGE
BENEFITS
This car has power It takes less effort to • It’s easier to park
steering
turn the wheels • It’s less tiring to drive
This fleet /Co car It makes the car fuel • It’s cheaper to run
has a Gizmo©
efficient
• Lower car tax
engine management
• Less time wasted filling up
system
High performance
• Lower outlay until exp paid
Less engine wear
• Less pollution
Low octane
fuel
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Product features
But what benefits
will they deliver?
100% pure cotton
Tasty and filling
Authentic recipes
Pure ingredients
Easy to prepare
Oven, grill or microwave
Full meal in a box
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Hard-wearing
Range of fittings
Easy-care
Range of colours
Classic design
USP: Unique Selling
Proposition (Point)
What benefits make your
product stand out?
Citroen:
Technology as it should be: 100% useful..
Olympus cameras:
All the features of a professional camera
but without the fuss..
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USP: Unique Selling
Proposition (Point)
Authentic, pure and tasty
… just add wine
Work, rest and play… jeans
that will last the course,
whatever your lifestyle
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PRODUCT LIFE CYCLE
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Product lifecycle
Traditional plc
Break-even
M A T U R I T Y
EARLY
LATE
DECLINE
SENILITY
GROWTH
LAUNCH
PROFIT
DEATH
NPD
COSTS
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•
•
•
•
GROWTH
market acceptance gained
sales and profits rise
achieve break even
danger of copy-cats
Product lifecycle
LAUNCH-INTRODUCTION
Traditional plc
• aim to get “try and buy”
• can cost lot in promotion
• risk of failure- 80% fail
• low sales- loss making
•
•
•
•
•
•
•
•
MATURITY
sales stabilise- lower margins
competitive- fight for share
shake-out of less competitive
may extend via plc extension
DEVELOPMENT- R&D
product concept cheap
R&D costs may be high
need to keep secret
abort if unviable
•
•
•
•
DECLINE
sales and profits fall
often overcapacity
highly competitive
exit mkt…or milk
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PLC: demand plc
DEMAND LIFECYCLE: eg home music-players
TECHNOLOGY LIFECYCLE: waves of technology
PRODUCT LIFECYCLE: product types
MODELS LIFECYCLE:
specific models
Digital
music centre
solid state Hi-Fi
valve Hi-Fi
Analogue
mini
centre
valve radiogram
Pianola
Music
box
Mechanical recording
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Product lifecycle
Portfolio plc (cp BCG)
PROFIT
A
F
B
E
C
D
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PLC: strategic characteristics
LAUNCH
GROWTH
MATURITY
DECLINE/SENILITY
Based on Wilson and Gilligan
FOCUS
EXPAND MARKET
mktg objective trail purchase
GAIN SHARE
build cust’r base
DEFEND SHARE
keep share/profits
REDUCE COSTS
milk then exit
Sales
Low
Rapid increase
Peaking…stable
Falling
Cost per custr
High
Average
Low
Low
Profits
Negative
Increasing
High… low/unit
Declining
Customer type Innovators
Early adopters
Majority
Laggards
Competitors
Increasing- copies
High… shakeout
Few.. Shakeout
Few
Comp strategy Unfocussed and
indirect
Gain share- low
Price & aggressive
prod differentiation promotion
May revitalise
cost cut… exit
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PLC: mix strategies
LAUNCH
GROWTH
MATURITY
DECLINE/SENILITY
Based on Wilson and Gilligan
FOCUS
EXPAND MARKET
mktg objective trail purchase
GAIN SHARE
build cust’r base
DEFEND SHARE
keep share/profits
Product
Basic- untested
Develop range
Modify…differentiate Phase out dogs
Price
Low… or high?
Low- penetration
Competitive
Reduce.. or milk?
Place/Distb’n
Selective… limited
Intensive
Intensive
Selective
Promotion
Heavy.. awareness
Moderate.. high
Aim to differentiate
Limited
Sales promo
Hi-encourage trials Low level
Hi… brand switch
Few.. or sell off?
Planning
timeframe
Sort-medium term
Medium range
Short term
Long range
REDUCE COSTS
milk then exit
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PLC: product life extension
• Re-launch… revive, repackage and re-launch
• Re-position… Lucozade went from illness to sports
• Re-style… cars: new grilles, special editions etc
• Re-design… MS 97/2000/XP/Vista/Win7… Office Suite
• Customise… lunch box foods, handbag size tissues
• Innovate… mobile phones to I-phone
• Revive… VW Beetle and BMW Mini (retro-mktg)
growth
maintenance
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PLC: problems
Where
are you
on the
plc?
How long is maturity?
What shape is the plc?
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PLC: variations in shape
Tellis and Crawford (1981) identified 17 shapes
Swann and Rink (1982) identified 10
Short-life
…high sales
Incremental
growth
Re-vitalisation
Hump.. phases
to create
then settling
“S curve”
“classic” curve
Cyclical
revivals in
Short-life
popularity
…low sales Tail
Slow take-up
How do you know which shape yours is?
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PLC: self fulfilling?
This product’s still got life…lets
push it in the market
Let’s do nothing
We think this product’s
about to die… so lets
stop promoting it
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PLC: competitor’s action
Poor competition with
uncompetitive products
and marketing
Your plc
Strong competition
with competitive products
and marketing
Your
plc
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PRODUCT & BRAND
PORTFOLIO
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Product Portfolio:Dimensions
Product Portfolio
LINES
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Product Portfolio:Dimensions
Workwear
Standard
Fashion
LINE DEPTH
FASHION
Flares
LINE ITEMS
Hipsters defined by:
Colour
Baggies
Waist
Embroidered Leg
Faded
Bondage
Cut-off
LINE LENGTH
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Product Portfolio:Dimensions
Delish Ready Meals
Indian
Tex-Mex
Chinese
Italian
Line Depth:
Beef Madras
Rogan Gosh
Chicken Tikka
Beef Vindaloo
VegeKorma
Line items
Single
portion
Family
pack
Lunch
Pot
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Brand Portfolio
Hi quality/status
£low
£high
Viable segments
Lo quality/status
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BRANDS
Brand Portfolio
Extra
Superstore
60,000+ sq ft
20,000-50,000 sq ft
Express
Metro
up to 3,000 sq ft
7,000-15,000 sq ft
Non
Tesco 527 ONE-STOPS
Consumer VAT savings
Tesco tax savings
Direct
online
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BRANDS
Brand Portfolio
TECHNIKA
41
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BRANDS
14
Decathlon’s “passion” private brands
Kapferer
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INNOVATION AND NEW
PRODUCT DEVELOPMENT
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Innovation & invention
Technology Timeline:
OR… a downturn of
innovation and invention
since the 1800s?
bio/nano
age
silicon
age
Huebner and Jones (Sunday Times 16/10/05)
stone
age
age of
steam
enlightenment age
plastic
age
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Innovation & invention
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Innovation & invention
Take up:
technology transfer
… microchips
Military
Aerospace
Science
Specialist
Luxury
General
ubiquitous
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Innovation & invention
IDEAS
SCHEMES
offer bonuses
REVERSE
ENGINEERING
competitor's
products
COST SAVING
finding cheaper way
to do things
NEW
TECHNOLOGY
new products
SOURCES OF
INNOVATIVE
PRODUCTS
MKT RESEARCH
identify new and
changing needs
SEGMENTATION
identify new marketmicro/niches
TECHNOLOGY
TRANSFERANCE
new uses
TECHNOLOGY
IMPROVEMENT
incremental
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New Product
Development
NPD Process:
Ideas generation… research/feedback/sales team
Idea screening… fit with organisation/feasible/prima-facie
Concept testing… inc initial design/consumer testing
Market strategy development…market feasibility
Business case… marketability/sales… pay-back..profit
Product R&D… detailed development/testin/packaging
Market testing… feedback/test mkt/research/focus groups
Commercialisation… full launch
REVIEW… amend/revise/relaunch/extend etc
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New Product Development
New product failure rate:
Ideas
NPD
Cost
CUT
YOUR
Business case LOSSES
Screening
Development
Test market
Launch
Commercialisation
(profit)
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New Product Development
Risk of failure:
success
PROFIT
LOSS
technical
success
death
valley
failure
launch
breakeven
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New Product Development
Types of innovation & Success:
Adapted from Calentone & Cooper 1981 cit Blythe
CLUSTER 1
Improvements over
existing but no synergy
with Cos tech/mkts
CLUSTER 4
Truly “new to the
world” product with
unique technology
CLUSTER 7
A “me to” copy with no
extra benefits but with
some synergy with Co
CLUSTER 2
Technical development
but no real advantage
over current products
CLUSTER 5
A “me to” copy with no
extra benefits and no
synergy with Co
CLUSTER 8
Truly innovative and
improvements but no
synergy with Co
CLUSTER 3
A “me to” copy of a
competitor's product
with no extra benefits
CLUSTER 6
A “me to” copy with no
extra benefits but made
to be cheaper in mkt
CLUSTER 9
Line extension offering
minor improvements on
Cos current range
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Product adoption
New product adoption rate:
2.5%
Innovators
13.5%
Early
adopters
34%
Early majority
34%
Late majority
16%
Laggards
Schiffmann and Kanuk (from Bourne)
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