marketing mix Flashcards
Marketing mix
the four key decisions that must be taken in the effective marketing of a product
marketing mix is made up of which four inter-related decisions
product design performance
price
promotion including advertising and place
The role of the customer – the 4Cs
■ Customer solution – what the firm needs to provide to meet the customer’s needs and wants.
■ Cost to customer – the total cost of the product including extended guarantees, delivery charges and financing costs.
■ Communication with customer – providing up-to-date and easily accessible two-way communication links with customers to both promote the product and gain back important consumer market research information.
■ Convenience to customer
Linking the 4Ps and the 4Cs
Product-Customer solution
Price-Cost to customer
Promotion-Communication with customer
Place-Convenience to customer
Developing effective long-term relationships with customers can be achieved by:
■ targeted marketing– giving each customer the products and services they have indicated
■ customer service and support
■ providing as much information to customers as possible– about product materials/quality/features and service levels
■ using social media
the best form of product differentiation is one that creates a unique selling point (USP) name Examples of effective USPs
■ Domino’s Pizza deliveries: ‘It arrives in 30 minutes or it’s free.’
■ Dyson vacuum cleaners: ‘100% suction, 100% of the time from bagless technology.’
Benefits of an effective USP include
■ Effective promotion that focuses on the difffeature of the product or service.
■ Opportunities to charge higher prices due to exclusive design/service.
■ Free publicity from business media reporting on the USP.
Tangible and intangible attributes
Intangible attributes of a product: subjective opinions of customers about a product that cannot be measured or compared easily.
Tangible attributes of a product: measurable features of a product that can be easily compared with other products
Product life cycle
the pattern of sales recorded by a product from launch to withdrawal from the market and is one of the main forms of product portfolio analysis.
Points to note on each stage of product life cycle
■ Introduction: This is when the product has just been launched
■ Growth: If the product is effectively promoted and well received by the market,
■ Maturity or saturation: At this stage, sales fail to grow, but they do not decline significantly either
■ Decline-During this phase, sales will decline steadily
Uses of the product life cycle
■ Identifying how cash flow might depend on the cycle.
■ Recognising the need for a balanced product portfolio
Price elasticity of demand:
measures the responsiveness of demand following a change in price
The formula for price elasticity of demand (PED) is: percentage change in quantity demanded divided by percentage change inprice
Factors that determine price elasticity
1 How necessary the product is: The more necessary consumers consider a product to be, the less they will react to price changes.
2 How many similar competing products or brands there are:
3 The level of consumer loyalty: successful branding
4 The price of the product as a proportion of consumers’ incomes
2 main uses of of price elasticity of demand
1 Making more accurate sales forecasts:
2 Assisting in pricing decisions
how do managers determine the appropriate price?
■ Costs of production:
■ Competitive conditions in the market: If the firm is a monopolist, it is likely to have more freedom in price setting than
■ Competitors’ prices
■ Business and marketing objectives
