Marketing MixMarketing Mix

The productThe product• Value of a Value of a product: Value of a product means the : Value of a product means the

relationship between the between the consumer's expectations 's expectations of product of product quality, to the actual amount paid for , to the actual amount paid for it.it.

• Value = Benefits / Price Value = Benefits / Price Or alternatively: Or alternatively: • Value = Quality received / Expectations.Value = Quality received / Expectations.• There are parallels between There are parallels between

cultural expectations and consumer expectations; and consumer expectations; the value in the the value in the marketplace varies from varies from place to to place as well as from place as well as from market to market. to market.

The productThe product• For a firm to deliver value to its customers, they For a firm to deliver value to its customers, they

must consider what is known as the must consider what is known as the "total "total market offering."market offering." This includes the This includes the reputation of reputation of the organization, staff representation, product the organization, staff representation, product benefits, and technological characteristicsbenefits, and technological characteristics as as compared to competitors' market offerings and compared to competitors' market offerings and prices. prices.

• The key to deliver high perceived value -- The key to deliver high perceived value -- making making consumers believe that what you are offering is consumers believe that what you are offering is beyond expectationbeyond expectation -- helping them to solve a -- helping them to solve a problem, offering a solution, giving results, and problem, offering a solution, giving results, and making them happy.making them happy.

Components of the market offering through Components of the market offering through productproduct

• planning its market offering, the marketer needs to address five planning its market offering, the marketer needs to address five product levels:product levels:

1.1. The fundamental level is The fundamental level is the core benefitthe core benefit: the service or benefit : the service or benefit the customer is really buying.the customer is really buying.

2.2. At the second level, the marketer must turn the core benefit At the second level, the marketer must turn the core benefit into a into a basic productbasic product. .

3.3. At the third level, the marketer At the third level, the marketer prepares an expected product, prepares an expected product, a set of attributes and conditionsa set of attributes and conditions buyers normally expect when buyers normally expect when they purchase this product.they purchase this product.

4.4. At the fourth level, the marketer prepares At the fourth level, the marketer prepares an augmented an augmented productproduct that exceeds customer expectations. that exceeds customer expectations.

5. At the fifth level companies search for new ways to satisfy customers and distinguish their offering.

Requirements of a good advertisementRequirements of a good advertisementThe AIDA principle. Attention, Interest, Desire and The AIDA principle. Attention, Interest, Desire and

Action:Action:

• Attract attention (awareness).Attract attention (awareness). • Stimulate interest.Stimulate interest. • Create a desire.Create a desire. • Bring about action (to buy the product).Bring about action (to buy the product).

Planning for advertisingPlanning for advertisingAny advertising plan addresses the following stages:Any advertising plan addresses the following stages:

• Who is the potential target audience?Who is the potential target audience?

• What does the company wish to communicate to this What does the company wish to communicate to this

target audience?target audience?

• Why is this message so important to them?Why is this message so important to them?

• What is the best medium for this message to take?What is the best medium for this message to take?

• What would be the most appropriate timing?What would be the most appropriate timing?

• What resources will the advertising campaign need?What resources will the advertising campaign need?

• How does the company control its advertising and How does the company control its advertising and

monitor success? monitor success?

Personal salesPersonal salesOral presentation given by a salesperson Oral presentation given by a salesperson that approaches individuals or a group of that approaches individuals or a group of potential customers:potential customers:•Live, interactive relationship. Live, interactive relationship. •Personal interest .Personal interest .•Attention and response .Attention and response .•Interesting presentation. Interesting presentation. •Clear and thorough. Clear and thorough.

Sales promotionsSales promotions

are Short-term incentives to encourage buying of are Short-term incentives to encourage buying of

products and to get the following advantages:products and to get the following advantages:• Instant appeal. Instant appeal. • Anxiety to sell.Anxiety to sell.• People are given an incentive to buy, but this does not People are given an incentive to buy, but this does not

build customer loyalty or encourage future repeat buys. build customer loyalty or encourage future repeat buys.

Marketing Public Relations (MPR)Marketing Public Relations (MPR)• Stimulation of demand through press release giving a Stimulation of demand through press release giving a

favorable report to a product favorable report to a product • Higher degree of credibility Higher degree of credibility • Effectively news Effectively news • Boosts enterprise's image.Boosts enterprise's image.

PricingPricing is the process of determining what a company is the process of determining what a company will receive in exchange for its products. Pricing will receive in exchange for its products. Pricing factors are manufacturing cost, market place, factors are manufacturing cost, market place, competition, market condition, Quality of competition, market condition, Quality of product.product.What a price should do?What a price should do?A well chosen price should do three things:A well chosen price should do three things:•Achieve the financial goals of the company Achieve the financial goals of the company (e.g., profitability). (e.g., profitability). •Fit the realities of the marketplace (Will Fit the realities of the marketplace (Will customers buy at that price?). customers buy at that price?). •Support a product's positioning. Support a product's positioning.

• An efficient priceAn efficient price is a price that is very close to the is a price that is very close to the maximum that customers are prepared to pay. maximum that customers are prepared to pay. • Promotional pricingPromotional pricing: refers to an instance where pricing is : refers to an instance where pricing is the key element of the marketing mix.the key element of the marketing mix.• Reference pricesReference prices Research has shown that although Research has shown that although consumers may have fairly good knowledge of the range of consumers may have fairly good knowledge of the range of prices involved. prices involved. Reference pricesReference prices when customers examining when customers examining products, consumers often employ reference prices, products, consumers often employ reference prices, comparing an observed price to an internal reference price comparing an observed price to an internal reference price they remember or to an external frame of reference.they remember or to an external frame of reference.• The price/quality relationshipThe price/quality relationship refers to the perception by refers to the perception by most consumers that a relatively high price is a sign of good most consumers that a relatively high price is a sign of good quality. The belief in this relationship is most important with quality. The belief in this relationship is most important with complex products that are hard to test, and experiential complex products that are hard to test, and experiential products that cannot be tested until used (such as most products that cannot be tested until used (such as most services). services).

• DistributionDistribution (or place) is one of the four (or place) is one of the four elements of marketing mix.elements of marketing mix.

• An organization or set of organizations (go-An organization or set of organizations (go-betweens) involved in the process of making a betweens) involved in the process of making a product or service available for use or product or service available for use or consumption by a consumer or business user , consumption by a consumer or business user , we can name it as the we can name it as the distribution channel, or distribution channel, or distribution chain. distribution chain.

•The distribution channelThe distribution channelFrequently there may be a chain of Frequently there may be a chain of intermediaries; each passing the product down intermediaries; each passing the product down the chain to the next organization, before it the chain to the next organization, before it finally reaches the consumer or end-userfinally reaches the consumer or end-user

A number of alternate 'channels' of distribution may A number of alternate 'channels' of distribution may be availablebe available::

• Selling direct, such as with an outbound salesforce or Selling direct, such as with an outbound salesforce or

via mail order, Internet and telephone sales. via mail order, Internet and telephone sales. • Agent, who typically sells direct on behalf of the Agent, who typically sells direct on behalf of the

producer. producer. • Distributor (also called wholesaler), who sells to Distributor (also called wholesaler), who sells to

retailers. retailers. • Retailer (also called dealer or reseller), who sells to Retailer (also called dealer or reseller), who sells to

end customers. end customers. • Advertisement typically used for consumption goods. Advertisement typically used for consumption goods.

Channel decisionsChannel decisionsThe channel decision is very important. : the cost of The channel decision is very important. : the cost of using intermediaries to achieve wider distribution is using intermediaries to achieve wider distribution is supposedly lower. Many suppliers seem to assume that supposedly lower. Many suppliers seem to assume that once their product has been sold into the channel, into once their product has been sold into the channel, into the beginning of the distribution chain, their job is the beginning of the distribution chain, their job is finished. but, if they have any aspirations to be market-finished. but, if they have any aspirations to be market-oriented, their job should really be extended to oriented, their job should really be extended to managing all the processes involved in that chain, until managing all the processes involved in that chain, until the product or service arrives with the end-user. the product or service arrives with the end-user. This This may involve a number of decisions on the part of the may involve a number of decisions on the part of the supplier:supplier:• Channel membership. Channel membership. • Channel motivation. Channel motivation. • Monitoring and managing channels. Monitoring and managing channels.