THE MARKETING MIX
When marketing their products and services,
firms need to create a successful mix of:
 PRODUCT
 PRICE
 PROMOTION
 PLACE
The 4 P’s of marketing
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PRODUCT
The Product is the actual item that a
consumer purchases, including the
packaging, image, guarantee and
after-sales service
Learn this definition!
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THE PRODUCT LIFE CYCLE
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New product
Sales low
G
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Sales grow
rapidly as
product
becomes well
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INJECTING NEW LIFE
Time
Product fully established
Sales even out
Competitors enter market
Popularity
declines and
sales fall
New marketing strategies are
introduced to reverse decline
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Extension Strategies
 A business wishing to extend the life of a
product which has reached maturity or is in
decline can alter one or more of the marketing
mix by changing
 PRODUCT eg.. alter the packaging, introduce a new
version
 PRICE eg.. reducing the price to interest customers
 PROMOTION eg.. introduce a new advertising
campaign
 PLACE eg.. change where it can be bought, eg online
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EXTENSION STRATEGIES
 One company launched a new drink 7 times
before it was successful. Can you guess what
•Answer: 7 UP
they called it?
 Malteesers
 Introduction of new variety, eg white chocolate
 New advertising campaign for new variety
 Guidance
 Changed name to Pastoral Support
 PS teachers spend more time on guidance and less on teaching
 Marathon
 Changed name to snickers
 Sponsors of sporting event
 Banks
 Services now available via internet or telephone
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Cadburys Flake
Extention Strategies
•The Cadbury Flake bar was originally launched in 1920
•In 1930 the Flake 99 ice cream accompaniment was
introduced
•2001 the Snowflake (a crumbly white chocolate Flake centre
covered in milk chocolate) was launched.
•In 2003 the Cadbury Flake Dipped was introduced where
consumers can enjoy all the benefits of the Flake withouth
the mess - ideal for on the go.
•In September 2004 Cadbury Flake Moments were launched,
a selection of miniature milk chocolate and white chocolate
Flake pieces, which extended the Flake brand into the giving
market - creating the ideal gift.
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QUESTIONS
1.
FOR YOUR CONSIDERATION
Chanel No5 is an expensive perfume which has been
around for many years. It’s sold exclusively in only
certain stores and its target market is women over
35. The company feels it is losing ground to newer
perfumes and wants to extend the life of the
product. Suggest as to how they might achieve this.
2. Name 3 other products or services which have
altered some element of their marketing mix
recently and describe how they have done this.
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BRANDING
 A product with a ‘personality’
 Instantly recognizable by logo,
packaging, taste, advertising and other
features
 Believed to be a guarantee of quality
 Some brands have ‘snob value’
 Usually cost more
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BRAND LOYALTY
 Some customers are loyal to a particular
brand. They will buy the brand again
and again and also other associated
products
 TIDE laundry detergent
 TIDE fabric Softener
 TIDE dishwasher pods
 The product is often sold in places that
reinforce the brand image, eg sports
drinks in leisure centers, gyms, & clubs
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OWN LABELS
What about
premium own
brands? em
 Retailer’s own brands eg Essentials at
ACME
 Not manufactured by retailer
 Sold only in retailer’s stores
 Less expensive than branded goods
 Need little advertising
 Seen as inferior quality
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Which brands do you associate with the
following products?
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Toilet paper
Chocolate
Soft drink
Toothpaste
Washing liquid
Potato Chips
Cat food
Disposable diapers
Ice cream
Bandage
Coffee
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Scott
Hersheys
Coca-cola
Colgate
Tide liquid
Herr’s
Whiskas
Pampers
Ben & Jerry’s
Band Aid
Nescafe
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QUESTIONS
1.
FOR YOUR JOTTER
From a marketing point of view, describe the
differences between Heinz baked beans and
Safeway own label baked beans under the
following headings
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Product
Price
Place
Promotion
2. Heinz produces many products other than baked
beans. Describe the advantages of producing
several products under the same brand name?
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PRICE
The amount consumers are prepared
to pay for a product or service
Learn this definition!
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What is the best price for a
product?
 Charging the right price is a very
important part of the marketing mix.
 How much you charge will depend on
 How much it cost you to make your product
 How much your competitors are charging
 Whether you are trying to introduce a new
product
 The image you want for your product
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THE PRICING DECISION
 A low price will attract sales. This
makes it possible to sell large
quantities at a low average cost
 An average price will mean you need
to compete with your rivals by a
means other than price, eg by having
a better quality product or better
promotion or advertising
 A high price can be charge if your
product is seen a being better than
your rivals
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For each of the following products, try to explain whether the
manufacturer/retailer is going for a low price, an average price or a
high price
Chanel No 5
Aramis
CK One
Porsche Boxster
Nissan Sentra
Ford Fusion
(HIGH – prestige product, expensive packaging)
(LOW – lower quality, cheaper packaging)
(AVERAGE – in competition with similar brands)
(HIGH – prestige product, sporty image)
(LOW – smaller car, lower spec)
(AVERAGE – in competition with other models)
Supermarket own brand
Heinz beans
Bush
Levi 501
Old Navy
Tommy Hilfiger
sports and entertainment marketing
(AVERAGE – competitively price alternative)
(HIGH – market leader, quality product)
(LOW– lower quality, cheaper price to attract
customers)
(LOW– lower quality cheaper price to attract
customers)
(HIGH – market leader, quality product)
(AVERAGE – competitively price alternative to
branded goods)
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PRICING TECHNIQUES
 Time-based - suitable for repairing a washing machine
where the price is dependent on how long the job takes
 Cost plus - calculate how much it costs to make a product
then add on profit
 Start-up or penetration pricing - a firm bringing out a
new product or trying to break into a market might
charge a low price at first in order to interest
consumers. (penetration)
 Off the top or price skimming– a prestige product or a
new highly sought after product can often be sold at a
high price because consumers want to be associated with
the product
 Destroyer – selling a product at a very low price in order
to destroy a competitor. Once the rival firm has been
forced out of business the price of the product will be
increased
 Market Orientated – Selling a product at a price in line
with competitors. This is typical where there are many
competitors.
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QUESTIONS
FOR YOUR CONSIDERATION
Describe a suitable pricing technique for each of the
following situations? Justify your answers.
 A new state-of-the-art video mobile phone just
on the market
 A self-employed gardener wanting to quote
customers for general gardening jobs
 A newspaper in fierce competition with a rival
paper
 Hershey’s introducing a new chocolate bar
 A business makes and sells fresh sandwiches to
office workers
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PLACE
This is the route that products
take to reach the consumer
from the manufacturer
Learn this definition!
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The Market Place
No matter how good the product is – it
has to be in the right place at the right time.
buyers and sellers come together in the following ways
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Shop
Cash and Carry
Market stall
TV – shopping channel
Internet
Newspaper and Magazines
Mail order
Direct mail
Factory shop
sports and entertainment marketing
These are
referred to as
Direct
Marketing
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CHANNELS OF DISTRIBUTION
MANUFACTURER
MANUFACTURER
MANUFACTURER
WHOLESALER
CONSUMER
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RETAILER
RETAILER
CONSUMER
CONSUMER
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The channel of distribution chosen
will depend on:
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The product being sold
The finance available
The reliability of companies in the chain
The desired image of the product
Legal restrictions
The products life cycle
The manufacturer’s distribution capability
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QUESTIONS
FOR YOUR CONSIDERATION
1.
Wheels Ltd manufacture bicycles. They sell to customers
via wholesalers and retailers. They are considering opening
a factory shop to sell directly to customers. Outline the
advantages of this plan to Wheels Ltd and to their
customers? (4)
2.
Advances in technology have opened up new channels of
distribution. Describe one of these new channels and
illustrate your answer with an appropriate example.
1.
There are legal restrictions on the way in which some
products are distributed to consumers. Give examples of
such products and describe why these restrictions are
enforced.
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PROMOTION
Promotion is the way in which a
consumer is made aware of a
product or service and is persuaded
to purchase it
Learn this definition!
sports and entertainment marketing
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PROMOTION
 The aims of promotion are to
 PERSUADE consumer to buy the product
 INFORM consumers about the product
 REMIND consumer that the product still
exists
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ADVERTISING MEDIA
Television
Newspapers – National, Sunday, local
Magazines
Radio
Cinema
Outdoor media – billboards, sports
hoardings, bus shelters
 Internet
 Direct mail
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Above the Line Promotion
This targets everyone – even those not
interested in the product.
 TV
 Radio
 Newspapers
 magazines
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Below the Line Promotion
 The business has direct control.
 Direct mail (post or e-mail)
 Personal selling
 Trade fairs
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Quick Task…….
 State whether each of the media below is
Above or Below the Line.
 Suggest advantages and disadvantages for
each of the following Advertising Media.:
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Television
Daily Newspapers
Radio
Cinema
Billboards
Internet pop ups
Direct Mail
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Quick Task 2………
 Suggest a suitable advertising media
for Nike’s new trainers.
 Justify your answer.
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 PRODUCT ENDORSEMENT
 Famous sport or showbiz
personalities are paid to wear and
use a particular product, eg
Adidas, Gillette and David
Beckham
• PRODUCT PLACEMENT
–Paying for product to be used
in films and TV programmes, eg
James Bond driving a BMW in
Goldeneye
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Quick Task 3………….
 Explain possible advantages and
disadvantaged of celebrity
endorsement for an organization.
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The choice of advertising media depends
on:
 The product
 The audience to be targeted
 The type of coverage, eg national or
local
 The amount you want to spend
 The advertising used by competitors
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SALES PROMOTIONS
 Short term inducements used to
encourage sales
 There are 2 groups of sales
promotion:
 Into the pipeline
 Out of the pipeline
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INTO THE PIPELINE
 These are offered by manufacturer to
retailers (dealers) to encourage them to
stock their products:
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Point of sale displays
Sale or return
Dealer competitions
Staff training
Credit facilities
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OUT OF THE PIPELINE
 These are offered by the retailer to the
consumer to encourage purchases to be made:
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Free samples
Credit facilities
Demonstrations
Competitions
BOGOFs
Promotional prices
Free offers
Coupons/vouchers
sports and entertainment marketing
Buy One Get
One Free
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QUESTIONS
FOR YOUR CONSIDEARTION
1. Describe the difference between product
endorsement and product placement. Give
examples to illustrate your answer.
2. Compare the following advertising media –
television, newspapers and direct mail. Your
answer should refer to cost, coverage, market
segment, legal restrictions, and competition.
3. Describe 2 forms of each of the following
types of sales promotion
 Into the pipeline
 Out of the pipeline
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Activity…….
 Choose a Sports or Entertainment
Event
 Design a 4Ps Mobile explaining all you
know about each one of the 4Ps
 Include a definition on the back of
each P, and a definition of your event
and the specific P for your event.
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