The Marketing Mix Part 1: Product, price and place Marketing and Sales

1. The Marketing MixPart 1: Product, price and placeMarketing and Sales

2. Learning objectives • Learn what the marketing mix is. • Be able to understand the different types of promotion and how they are used. • Understand how research and development leads to the accumulation of knowledge about customers, and ultimately to the creation of new products.

3. The marketing mix Themarketing mixis a set of decisions that a business has to make in order to successfully market a product. They must take into account how these decisions meet the needs of their customers. To do this, they analyse their market research. A successful marketing mix will boost sales, create a brand identity and establish customer loyalty to the brand. The components that make up the marketing mix are the4 Ps: • Product • Place • Price • Promotion.

4. The 4 Ps What happens if the wrong marketing mix is chosen?

5. Research and Development (R&D) Unless a business is continually expanding and developing its range of products, it cannot succeed. Product life cycle If the marketing mix for a new product is correct, sales should gradually increase. However, after time, sales will begin to level and then decline. This sequence of introduction, growth, maturity and decline is known as theproduct life cycle. Can you describe it and give examples?

6. Tesco Purchases inside Tesco stores and on their website are processed electronically. The data from each purchase is stored in a database. The functional areas access that information and use it to perform their tasks and assess whether or not they are meeting their objectives. The Marketing department, for example, builds up customer profiles. This helps them target the right market segments. Tesco’s loyalty card, ‘Clubcard’, has enabled it to construct the UK’s largest database. How could Tesco’s other functional areas use the data fromEPOSto perform their tasks?

7. Product The marketing mix is made up from the key ingredients required to make a good or service successful. Known as the 4 Ps, they are product, price, promotion and place. Product: This refers to the good or service that a firm sells and its features, such as design, functions, colour, size etc. Making products stand out from rivals’ products helps firms compete – this is product differentiation. A good product is at the heart of a successful marketing mix – without it, sales will eventually fall.

8. Price, place and promotion Price: This needs to reflect the image of the product – whether it is a luxury or a budget product – but also offer the customer value for money. Place: This involves getting the product to the right customers when they need it via the correct distribution channels. Promotion: Its role is to inform customers about the product and its features in a way that persuades them to buy it. Promotional techniques include advertising, sales promotions, public relations and merchandising. What is meant by an ‘integrated marketing mix’?

9. Pricing strategies

10. Place and distribution channels A business needs to make decisions about where its products will be sold and how they will get to consumers. Many manufacturers sell goods to customers via wholesalers and/or retailers. This can increase market coverage, but long distribution channels increase the price paid by the end consumer. Some service providers, such as restaurants and hairdressers, need direct contact with customers, making the choice of location important. However, the Internet has made location less important for some businesses. First Direct was the first UK bank to sell to customers by phone. How might this have benefitted customers?