6 - 10. (Extended) Marketing mix

Question 1

What are the marketing mix + extended? (7Ps)

Answer 1

1. Product
   - what customer buys
2. Price
   - how much customer pays for product
3. Place
   - how is product distributed to customers
4. Promotion
   - to find our how customer actually knows abt product, where to find & how they are convinced to buy

(extended)
5. Physical evidence
- everything customer sees when interacting with business

6. People
   - people that make contact with customers when delivering product
7. Process
   - process of shopping for product to ordering & receiving product/service offered by company

Question 2

3 Levels of product

Answer 2

1. Core product
   - what consumers are actually buying
2. Actual product
   - consists of features, design, quality, brand name, packaging
3. Augmented product
   - additional benefits to enhance customer experience

Question 3

3 Levels of product

Answer 3

1. Core product
   - what consumers are actually buying
2. Actual product
   - consists of features, design, quality, brand name, packaging
3. Augmented product
   - additional benefits that enhances customer experience

Question 4

Types of consumer products

Answer 4

1. Convenience
   - buys frequently
2. Shopping
   - compares on price, quality, style, suitability
3. Specialty
   - Unique characteristics
4. Unsought
   - knows but does not think of buying

Question 5

Product decisions

Answer 5

1. Product attributes
2. Branding
3. Packaging
4. Labelling
5. Product support services

Question 6

3 Major pricing strategies

Answer 6

1. Value-based
2. Cost-based
3. Competition-based

Question 7

Factors affecting pricing decisions

Answer 7

Internal:
- overall marketing strategy, objectives & mix
- organisational considerations

External:
- market & demand
- economy
- others

Question 8

Pricing tactics

Answer 8

Product mix pricing:
- Product line
- Optional product
- Captive
- Product bundle

Price adjustment:
- Discount & allowance
- Segmented
- Psychological
- Promotional

Question 9

New-product pricing strategies

Answer 9

1. Market-skimming pricing
2. Market-penetration pricing

Question 10

Promotions mix tools

Answer 10

1. Advertising
   - any paid form of non-personal presenting & promotion of ideas, goods or services by an identified sponsor
2. Public relations
   - Building good relations with company’s various publics by obtaining favourite publicity, building up a good cooperate image and handling unfavourable rumours, stories & events
   - development, investor relations, press relations, product & brand publicity
3. Personal selling
   - Personal presentations by firm’s sales force for the purpose of engaging customers, making sales & building customer relationships
   - selling process: prospecting & qualifying > pre-approach > approach > presentation > handling objections > closing > follow-up
4. Direct marketing
   - engaging directly with carefully targeted individual consumers & customers communities to both obtain an immediate response and build lasting customer relations
5. Sales promotion
   - short-term incentives to encourage purchase or sale of a product/ service

Question 11

Channel design decisions

Answer 11

1. Analysing consumer “service” needs
2. Setting channel objectives & constraints
3. Identifying major alternatives

Intensive distribution (stock the product in as many outlets as possible; convenience goods)
Selective distribution (use of more than one but fewer than all of the intermediaries that are willing to carry the company’s products; shopping goods)
Exclusive distribution (giving a limited number of dealers the exclusive right to distribute the company’s products in their territories; specialty goods)

4. Evaluating major alternatives