3 Marketing Mix Flashcards
Influences on the marketing mix
type of product
external influences
positioning
internal influences
External Influences on the Marketing Mix
Political/Legal - meeting emission goals, adhering to laws
Economic - charging higher prices in a period where incomes are high
Social - environmental concerns changing raw materials
Technological - online promotion, after sales service
Competition - may need to enhance goods to compete (USP)
Internal Influences on the Marketing Mix
Corporate Objectives
Finance - profitability, cash flow, liquidity
HR - quality of workforce, skills, customer service
Operational Issues - compete pn cost and quality
Business culture - production oreintated culture result in management setting unrealistic targets
Marketing Mix Elements
PRODUCT
PRICE
PROMOTION
PHYSICAL ENVIRONMENT
PLACE
PROCESS
PEOPLE
Purpose of the Product Life Cycle
shows the sales of a product over its life
Stages of the Product Life Cycle
Research & Development
Introduction
Growth
Maturity
Saturation
Decline
Research & Development Phase
market research carried out
prototypes are produced
product idea developed
negative cash flow - 0 sales
considers all elements of the mix
Introduction / Launch Phase
sales begin and start slowly as customers getting to know
high promotion expenditure to gain publicity
need to convince distributors to stock the new product
marketing campaigns
Growth Phase
sales accelerating if it is well advertised
more outlets for products need to be found
firm starts to break even on costs
begin to make profit
Maturity Phase
sales rate begins to slow down - at its peak
competitor may have launched a new product that impacts sales
customers desire new products
considers extension strategies
highest cash flow
Decline Phase
sales fall as popularity falls
profits still high but starting to fall
can introduce new product as extension strategy
considers if the product should be withdrawn
Extension Strategies
add new fature USP
change packaging
increase advertising budget
reposition brand into niche market
enter new markets
market segmentation
lower the price
redesign product
Boston Matrix
model which aides businesses in analysis a balanced portfolio of products - decision how to allocate investment (product development, promotion)
based on market share and market growth
Key Assumptions made in Boston Matrix
market share gained by investment in marketing
market share gains will always generate cash surpluses
cash surpluses generated when the product is in the maturity phase
best opportunity to build dominant market position during grwoth phase
STARS
high market share in a high growth market
cash neutral HOLD
Cash Cows
high market share, low market growth
mature and successful little need for investment
generates strong cash flows HARVEST
Question Marks
low market share in high growth markets
needs substantial investment to grow market share
cash absorbing BUILD
Dogs
low market share in low growth markets
may only generate cash to break even
cash neutral DIVEST
Benefits of Boston Matrix
useful for analysing portfolio decisions
only a snapshot of current position
no predictive value
does not consider external factors
flaws from assumptions
Drawbacks of Boston Matrix
market growth is inadequate measure of market’s attractiveness
market share is adequate measure of product’s ability to generate cash
focus on market share/growth ignores issues
product life cycle varies
What may happen to a Boston Matrix?
stars become cash cows
cash cows finance question marks
question marks develop into stars
remove dogs
revive dogs through extension strategies
Penetration Pricing
low prices charged to attract customers and gain a foothold within a market
used to establish market share
low introductory price increases over time
presumes a price elastic demand
Price Skimming
high price charged initially to gain a high profit margin from early adopters
used in established businesses
strong brand image
loyal customer base
USP - often patent protected
first mover advantage gaining competitive advantage
Dynamic Pricing
when pricing changes paidly in response to changing market conditions
(airlines and hotel rooms)
ideally suited to online sales where demand can be tracked in real time
maximise profits
Influences on Pricing Decisions
costs
stage of product’s life cycle
PED
positioning
other elements of marketing mix
competitiveness of environment
Influences on Promotional Mix
promotional budget
target market
the message
positioning
competitive advantage
Promotional Mix
Advertising
PR
Sales promotions
sponsorship
branding
Merchandising
the presentation and promotion of goods that are available to purchase
Branding
creating a distinct identity for a business in the minds of your target audience and the general population
Promotion
the process of communicating with customers to increase sales
Methods of Promotion
sponsorship
sales
celebrity endorsements
word of mouth
websites / radio / newspapers
direct mail
banners
Social Media
the social interaction among people when they exchange / create information and ideas in virtual platforms
Viral Marketing
marketing technique that uses social media netwroks to raise brand awareness and boost sales by getting users to recommend the promotional campaign
Brand
a promise to deliver certain beneifts and services
can be identified via a recognisable name, symbol, slogan, logo that os used to distinguish from competitors in the market
Persuasive Tactics
language and imagery used to revoke an emotional reaction and convinces buyers that a company is reliable
Informative Tactics
providing as many details as possible through advertisements
Place Function of the Marketing Mix
the route to market and the process of distribution to consumers
placement of products within stores
product manufacturers will employ merchandisers to liase with retailers
Multichannel Distribution
customers can buy the product in several ways (in store, online, click and collect)
Producer
supplies the goods
selling directly to customers will help to maximise profit margins as profit is not lost in intermediary’s mark ups
Wholesaler
firms that break the bulk and supply them in smaller quantities to retailers
producers want to sell to bigger wholesalers as it reduces distribution costs and time taken to negotiate
Retailers
shops that sell goods to final customers
Agent
a firm that never actually owns the good but will facilitate buyers and sellers coming together to make a deal happen
Factors Influencing Location
competitors
target market
type of product
proximity to suppliers
proximity to customers
Analysing Distribution Decisions
degree of coverage
costs of different strategies
nature of the product
degree of control a business wants over promotion and pricing
how customers expect to access the product
People Element of the Marketing Mix
how employees interact with customers
major impact on the firms quality of customer service and their brand image / customer loyalty (repeat sales, after sales service)
impacted by HR policies such as recruitment, training and motivation
Process Element of the Marketing Mix
how the company deals with its customers and delivers the product or service
covers areas such as communication and after sales service
Physical Environment
tangible feature that can enhance customers’ experience
buildings that the company operates in
store layouts/displays
equipment used
websites, catalogues, brochures, advertising literature, emails, letters
staff appearance and uniforms
packaging
Main Influences on Marketing Mix
position in the product life cycle and the boston matrix
type of product
marketing objectives
target market
competition and positioning
