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Marketing Mix

Marketing Mix. Cameron Stevenson. The What and Why. The Marketing mix is the blend of the four marketing elements of a product. Very important for your business Products wont succeed without marketing If the consumer doesn’t know it they wont buy it. Four Marketing Elements. Product

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Marketing Mix

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  1. Marketing Mix Cameron Stevenson

  2. The What and Why The Marketing mix is the blend of the four marketing elements of a product. • Very important for your business • Products wont succeed without marketing • If the consumer doesn’t know it they wont buy it

  3. Four Marketing Elements • Product • Distribution • Price • Promotion

  4. Product The item(s) you sell is your products. • Product mix- products and services a business sells • Product Features • Product or Service Positions

  5. Distribution How to get the products and getting your product in the consumers hands. • Channels of Distribution (Retail) • Receiving the Goods • Channels of Distribution (Service) • Channels of Distribution (Manufacturing Business) • Physical Distribution

  6. Channels of Distribution (Retail) • Tips for distribution: • Open hours convenient for customer • Catalogs, fliers, and other advertisements • Orders by phone or fax and do the shipping • Create a website

  7. Receiving the Goods All business must receive goods from suppliers • List for locating distributors, wholesalers, and manufacturers • American Wholesalers and Distributors Directory • Thomas Register • AT&T’s Business Buyer’s Guide • Magazines

  8. Channels of Distribution (Service) • Deal directly with customer • Service needs to be available when the customer wants it • Keep customers in mind

  9. Channels of Distribution (Manufacturing) • Make products to sell to other businesses • Possibly use all channels of distribution • Possibly use special channels of distribution

  10. Physical Distribution • Transportation, storage, and handling of products • Transportation • Airplane, pipeline, railroad, ship, truck, or combination • Storage and Handling • Warehouses, shipyards, etc. • Packaging protects product

  11. Price The dollar value of a product where revenue should exceed the expense. • Objectives • Determining the Price • Pricing a Service • Psychology of Pricing

  12. Objectives • What do you want the price to do? • Maximize sales • Attract customers • Discourage competition • Return on investment • Percentage return from what they invested • Obtaining a market share • Percentage of total sales in the market • Attracting customers from competitors

  13. Determining a Price • Demand-based pricing • Pricing determined by how much customer will pay • Cost-based pricing • Price using wholesale cost to determine price charge • Markup- amount added to wholesale cost • Use markdown when buying to much of a product

  14. Determining a Price cont. • Competition-based pricing • Pricing based off competitors price • Charge the same or less? Up to you.

  15. Pricing a Service Cost of items, effort, and time must be considered • Time-based pricing • Amount of time to complete the service • Bundling • Combining prices together instead of several prices • Breakeven point • Based on the cost of items used by seller • No profit no loss

  16. Breakeven Point • Revenue equals the cost of producing and distributing a product or service • Fixed cost- cost to the business that never changes • Variable cost- cost that relates directly to the number of the products sold • Selling price- price expected to sell the product at Fixed Cost / (Selling Price-Variable Cost) = Breakeven Point

  17. Breakeven Point Example Fixed Cost / (Selling Price-Variable Cost) = Breakeven Point ($10,00) ( ) ( )

  18. Psychology of Pricing • Perception of Savings- people pay more attention to $.99 tags than $1.00 tags • Perception of Value- consumers flock to bundled products thinking they can save much more money • Perception of Discounts- discount prices rarely fail in attracting customers • Perception of Unbundling- availability of payments makes the price seem cheaper Click Here or Here for More Information

  19. Promotion Communication used to inform, persuade, or remind. The advertisement selected to show potential consumers the product. • Promotional Mix • Advertising • New Advertising • Sales Promotion • Publicity • Personal Selling • Promotional Plan

  20. Inform • Provide information about a new product • Provide information about a changed product • Used in introduction stage of product lifestyle • Customers may make more intelligent purchase decision

  21. Persuade • Encourages the customers to take a specific action • Not negative • Show advantages over competitors product • May need coupons, rebates, or free samples

  22. Remind • Re tells about the product • Keeps the life cycle on going • Package new product in old boxes as a reminder of old times

  23. Advertising • Television, radio, newspaper, direct-mail, magazine, outdoor, telephone directory, and transit • Most common promotional type • Nearly everywhere Developing an Advertising Plan

  24. Advertising cont. Advantages • Reaches many people • Message can be repeated Disadvantages • Can be costly • Sometimes to broad of an audience

  25. New Advertising • Mobile • Thousands everyday • Social Network • Facebook • Myspace • Twitter • Internet • QR Code For more information click here! (Source)

  26. New Advertising cont. • Five most powerful online advertising • Search engine • Website • Free re-print promotional articles • Ezine • Pay-per-click For more information click here! (Source)

  27. QR Codes • Two-dimensional barcode (matrix code) • Scan like a barcode and get information stored in the coding

  28. Sales Promotion • Offer a customer direct incentive to buy • Coupons, sweepstakes, contest, rebates, and free samples

  29. Sales Promotion cont. Advantages • Generates immediate short-term sales • Used to support other parts of promotion Disadvantages • Costly • May not succeed so you loose money

  30. Publicity • Transmitted through mass medium • Non-paid communication about a business Advantages • Goodwill created for product • Can be cheap Disadvantage • Organization has little control over it

  31. Personal Selling • Person to person effort to inform, persuade, or remind a customer Advantage • Personal contact • Immediate customer feedback Disadvantages • Per-person cost • High cost per customer • Every encounter doesn’t make a sale

  32. Promotional Plan • Analyze the Market • Identify Target Market • Develop Promotional Objectives • Develop Promotional Budget • Select Promotional Mix • Implement Promotional Plan • Evaluate Results

  33. Analyze the Market • Conduct market research

  34. Identify the Target Market • Information obtained from analysis helps determine target market • Segmentation of market helps to identify needed promotional strategies

  35. Develop Promotional Objectives • Identify purpose or expected result of promotion • Based on completed market research • Flexible and reviewed periodically

  36. Develop Promotional Budget • Done with leftover money • Careful planning and managerial commitment needed • Based on expenses from previous year

  37. Select Promotional Mix • Reach target market, achieve organizational objectives, remain within budgetary guidelines • Decides: • Advertising • Personal selling • Publicity • Sales promotion

  38. Implement Promotional Plan • Naming people and departments responsible for implementation of product sections • Specific dollar amounts associated with each activity

  39. Evaluate Results • Evaluate strategies to see if they should be: • Continued • Altered • Redone • Research on customers before and after product usage

  40. Developing an Advertising Plan • Set Objectives • Determine the Budget • Develop the Theme • Select Media • Create the Advertisement • Develop the Ad Schedule • Evaluate Effectiveness

  41. Set Objectives • Desired results • Specific message to be communicated • Target audience • Specific period of time • Very detailed and measurable

  42. Determine the Budget • Decide what you can afford • Percentage of Sales • Bugets a percentage of past, present, or projected sales • Competitive Matching • Spend similar amounts to competitors

  43. Develop the Theme • Idea, appeal, or benefit around which all advertising messages in a plan revolve

  44. Select Media • Type and the actual media • Major media: • T.V., radio, newspapers, and magazines • Analyze cost, reach, frequency, and lead time

  45. Create the Advertisement • Reach target market, be consistent, reflect chosen theme, fit within budget. • Slice-of-Life • Fantasy • Musical • Technical Expertise • Testimonial • Lifestyle • Mood or Image • Character • Scientific Evidence

  46. Slice-of-Life • People using the product in an everyday setting

  47. Fantasy • Fantasy about using the product • Ex- Women combining themselves to follow you is a fantasy

  48. Musical • People or characters singing about the product

  49. Technical Expertise • Manufacture or producer explaining how product was made

  50. Testimonial • Celebrities or everyday people endorsing product

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