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The Marketing Mix PowerPoint PPT Presentation

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The Marketing Mix. Maintaining the right marketing mix that satisfies the target market and creates long-term relationships with customers. Did You Know? Domino’s Pizza delivery drivers cover 9 million miles a week delivering 400 million pizzas a year. Product Strategy. Product development

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The Marketing Mix

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The Marketing Mix

  • Maintaining the right marketing mix that satisfies the target market and creates long-term relationships with customers

Did You Know?

Domino’s Pizza delivery drivers cover 9 million miles a week delivering 400 million pizzas a year.

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Product Strategy

  • Product development

  • Classification

  • Mix

  • Life cycle

  • Identification

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Developing New Products

  • New Idea Screening

  • Business Analysis

  • Product Development

  • Test Marketing

  • Commercialization

Did You Know?

In 2001, Microsoft planned to spend $4 billion on R&D.

Source: Rebecca Buckman, “Window into the future,” Wall Street Journal, June 25, 2001, p. R19.

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Consumer Products

Convenience products

Shopping products

Specialty products

Business Products

Raw materials

Major equipment

Accessory equipment

Component parts

Processed materials

Industrial services

Classifying Products

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Product Line

Closely related products that are treated as a unit because of similar marketing strategy, production, or end-use considerations

Product Mix

All of the products offered by an organization

Product Line and Product Mix

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Colgate-Palmolive’s Product Mix and Product Lines

Source: “Our Products,” Colgate-Palmolive (n.d.), (accessed June 5, 2004).

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Product Life Cycle

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Identifying Products

  • Branding

    • The process of naming and identifying products; can use a brand mark or trademark

  • Packaging

    • The external container that holds and describes the product

  • Labeling

    • The presentation of important information on a package

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The 10 Most Valuable Brands in the World

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Categories of Brands

  • Manufacturer Brands

    • Kellogg’s, Ford, Sony

  • Private Distributor Brands

    • Kenmore appliances (Sears)

  • Generic Brands

    • peanut butter, dog food, kitty litter

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Packaging Functions

  • Protection

  • Economy

  • Convenience

  • Promotion

Did You Know?

While shopping, the average time a consumer looks at a package is 2.5 seconds.

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  • The content of labeling, often required by law, may include:

    • Ingredients or content

    • Nutrition facts (calories, fat, etc.)

    • Care instructions

    • Suggestions or use (such as recipes)

    • The manufacturer’s address and toll-free number

    • Web site

    • Other useful information

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Product Quality

  • The degree to which a good, service, or idea meets the demands and requirements of customers

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Pricing Strategy

  • Four Common Pricing Objectives:

    • Maximize profits and sales

    • Boost market share

    • Maintain the status quo

    • Survival

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Pricing Strategies

  • New Product Pricing

    • Price skimming

    • Penetration pricing

  • Psychological Pricing

    • Odd/Even

    • Prestige pricing

  • Price Discounting

    • Quantity discounts

    • Seasonal discount

    • Promotional discounts

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Price vs. Non-Price Competition

  • For the following products, indicate whether they are sold using price competition or non-price competition and defend your selection:

    • Toyota Hybrid Prius

    • Hyundai Sonata

    • Porsche Cayenne SUV

    • Estee Lauder Electric Intense Lipcreme

    • Avon Brilliant Moisture Lip Color

    • Louis Vuitton’s Murakami Handbags

    • Olay Complete Moisturizing Lotion

    • Toshiba Widescreen Televisions

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Distribution Strategy

  • Marketing Channels

    • Retailers (Wal-Mart, Sears)

    • Wholesalers (food brokers to restaurants)

    • E-tailers (

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Supply Chain Management

  • Long-term partnerships among channel members to reduce costs, waste, and unnecessary movement through the channel to satisfy customers

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Channels for Consumer Products

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Channels for Business Products

  • More than half of all business products are sold through direct marketing channels.

  • Other business products may be distributed through channels employing wholesaling intermediaries.

    • Industrial distributors

    • Manufacturer’s agents

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Intensity of Market Coverage

  • Intensive distribution

    • Makes a product available in as many outlets as possible

  • Selective distribution

    • Uses only a small proportion of all available outlets to expose products

  • Exclusive distribution

    • Exists when a manufacturer gives a middleman the sole right to sell a product in a defined geographic territory

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Physical Distribution

  • Physical distribution includes all the activities necessary to move products from producers to customers.

    • Inventory control

    • Transportation

    • Warehousing

    • Materials handling

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Importance of Distribution in a Marketing Strategy

  • Distribution decisions are the least flexible marketing decisions.

    • Use committed resources

    • Establish contractual relationships

    • Are bound by time

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The Promotion Mix

  • A strong promotion program results from the careful selection and blending of:

    • Advertising

    • Personal selling

    • Publicity

    • Sales promotion

  • Integrated marketing communications

    • The process of coordinating the promotion mix elements and synchronizing promotion as a unified effort

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  • A paid form of non-personal communication transmitted through a mass medium

    • Advertising campaign

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Print media



Direct mail

Outdoor (billboards)

Electronic media



Cyber ads

Advertising Media

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U.S. Advertising Expenditures in Millions of Dollars

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Internet Advertising

  • Total revenues from internet advertising in the U.S. increased over 30 % between 2004 and 2005 and now totals over $12.5 billion.

Source: “IAB Internet Advertising Revenue Report,” PriceWaterhouseCoopers

and the Interactive Advertising Bureau, April 2006, p. 3.

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Top 10 Product Categories for Advertising Spending in the United States for the year 2003

Source: “U.S. Advertising Spending Rose More than 5% in 2003, Nielson Media Research press release, February 19, 2004, available at

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Ten Leading National Advertisers

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Personal Selling

  • Direct, two-way communication with buyers and potential buyers

  • A six-step process:

    • Prospecting

    • Approaching

    • Presenting

    • Handling objections

    • Closing – asking for the order

    • Following up

Did You Know?

A typical sales call on an industrial customer can cost between $200 and $300 per call

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  • Non-personal communication transmitted through mass media but not paid for directly by the firm

    • Presented in news story form

    • Describes what a firm is doing, what products it is launching, or other newsworthy information

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Sales Promotion

  • Direct inducements offering added value or some other incentive for buyers to enter into an exchange

    • Store displays

    • Premiums

    • Sampling and demonstrations

    • Coupons

    • Consumer contests and sweepstakes

    • Refunds

    • Trade shows

Did You Know?

Annually, 248 billion cents-off coupons are distributed, but less than 2% are redeemed

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Push and Pull Strategies

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Objectives of Promotions

  • Stimulate demand

  • Stabilize sales

  • Inform, remind, and reinforce customers

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Promotional Positioning

  • The use of promotion to create and maintain an image of a product in the buyer’s mind

  • A natural result of market segmentation

  • Assists in product differentiation

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Average Salary for Sales and Marketing Executives, 2003

Source: Galea, Christine. “The 2004 compensation Survey,” Sales & Marketing Management, May 2004, table p.29.

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Solve the Dilemma

  • Design a marketing strategy for the new product line.

  • Critique your marketing strategy in terms of its strengths and weaknesses.

  • What are your suggestions for implementation of the marketing strategy?

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Explore Your Career Options

  • Do you think the role of marketing will continue to be important in the face of increasing technological advances?

    • Should professionals such as doctors, lawyers, and dentists utilize marketing in the same way that manufacturing and retail firms do?

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Additional Discussion Questions and Exercises

  • Research and development is the process of identifying new ideas and technologies that can be developed into new products.

    • Where do these new ideas come from?

  • Assume you have the opportunity to buy a company that markets a product.

    • Which stage of the life cycle of that product would offer you the greatest opportunity for profits? Why?

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Additional Discussion Questions and Exercises

  • What is the difference between a “brand mark” and a “trademark”?

  • What are the advantages of businesses using coupons and/or contests and sweepstakes for sales promotion purposes?

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Chapter 13 Quiz

  • In the introductory stage of a product’s life, buyers may be charged the highest possible price for the product. This pricing approach is called

    • penetrating pricing

    • psychological pricing

    • price skimming

    • break-even point

  • Branding may include:

    • the brand name

    • the brand mark

    • the trade mark

    • all of the above

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Chapter 13 Quiz

  • Products that are purchased after the consumer has compared competitive products are:

    • convenience products

    • shopping products

    • specialty products

    • a product line

  • Intermediaries who sell products to ultimate consumers for home and household use rather than for resale or for use in producing other products are:

    • wholesalers

    • retailers

    • merchant middlemen

    • agent middlemen

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Multiple Choice Questions about the Video

  • How much market share does Apple have of the digital music devices market?

    • 90%

    • 60%

    • 30%

    • 10%

  • Which of the following is not currently offered by Apple?

    • GarageBand

    • iMovies

    • iThing

    • iWeb

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