Marketing Mix

LEARNING GOALS
Key learning goals:
This topic will continue the discussion of
marketing management issues, especially
marketing mix and product life cycle.
1. Explain the four elements of marketing mix.
2. State the difference between place and
promotion.
3. Explain the stages of product life cycle.
4. Explain how a business can extend its product
life.
5. State the reasons why a business may analyze its
product life cycle.
 What is marketing mix?
Marketing mix refers to those four elements
(product, price, promotion, and place) of a
firms marketing strategy which are designed
to meet the needs of customers. These are
often known as the four Ps.
Simply, to meet consumers needs, businesses
must produce the right product, at the right
price, make it available at the right place, and
let consumers know about it through right
promotion.
 Elements of Marketing Mix
Marketing
Mix

Product Price Place Promotion

Appearance Cost based Retailers

Advertising
Competition Wholesalers
Function based Sales
Distribution Promotion
Production Consumer
Transportation Personal Selling
Costs based

Capable or Cost Convenienc Communica

Solution e tion
 Marketing Mix: Product
Product:
Products must be ensured to meet the
needs of customers in terms of the
following aspects:
1. Appearance
2. Function
3. Cost
 Marketing Mix: Product
Features of a product to meet the needs of customers

Aspects Brief explanations or examples

The appearance Color, size, shape, etc. must meet the
consumer needs.
The function Able to be used
Convenient for use
Meeting special needs of customers

The cost Production costs must be low enough to

earn some profit.
High cost, higher price.
Too high price, customers unlikely to
buy.
 Marketing Mix: Price
Price:
The pricing policy that a business chooses
is often a reflection of the market at
which it is aiming.
The right price set must take into account
of production costs, competitors prices
and consumers purchase ability and
demand level.
 Marketing Mix: Price
Influences from the pricing factors
Factors Influences on the price of a product
High High production costs would mean the
production high sale price for the goods supplied
costs by sellers.
High High customer demand will lead to the
customer increased price of the goods or services.
demand Suppliers are more wiling to provide
the goods or services as it is more
profitable for them to supply.
Low prices If the price of the substitute product
charged by offered by competitors decreases, the
competitors demand for a product will be decreased
as well.
 Marketing Mix: Price

Attention: High-price strategy

In general, from the economic point of view, the

higher the price of a product is, the less quantity
demanded by consumers. Or there are few
buyers who would like to high-price products.

However, in practice, a business may charge a

high price because it is aiming to sell to those
customers who regard its products as unique
and high quality although the production costs
are not high. For example, high pricing strategy is
one of the marketing strategies for China Haier.
 Marketing Mix: Place
Definition:
Place refers to the means by which products
can be distributed to the consumers. The
product must get to the right place at the right
time.

Decision making may be based on the following:

1. How the product is distributed physically,
such as air, sea, rail, or road.
2. How the product is sold, such as through
retailers, wholesalers, or direct mailing, etc.
 Marketing Mix: Promotion
Definition:
Promotion refers to a number of promotional
methods, such as advertising, sales promotion,
competitions, and personal selling, etc.

A business must choose a method of

promotion which is the most effective in its
particular market and for its own product. For
example, TV advertising may be better for the
product with a high sales turnover or a wide
appeal. But for high-technology machines or
equipment, it is better to choose personal
selling methods.
 Marketing Mix
Factors for making choices of marketing mix:
1. The type of product sold, e.g. for high tech.-
equipment, the business needs to emphasize the
product and its quality rather than promotion.
2. The market sold to, e.g. for consumer markets,
promotion may be emphasized.
3. The degree of competition, e.g. if the
competition is high, price is needed to be
emphasized in order to gain some advantages in the
market.
4. The position of the business in the industry,
e.g. if the business is large or the market leader, it
has more freedom to choose the market mix.
5. The stage of product life cycle in which a
product is, e.g. if the product is in the stage of
introduction, of course, promotion must be
emphasized...
 Product Life Cycle
Definition:
Products pass through several stages of
development in its life from introduction to
decline:

Stages of product life cycle usually include:

1. Development
2. Introduction
3. growth
4. Maturity
5. Saturation
6. Decline
Explanations:
See the following tables and figures.
 Product Life Cycle

The stages of the product life cycle:

Development Introduction Growth Maturity Saturation Decline

 Explanations of the stages of Product life cycle
Stages Brief explanations
The product is being designed.
Suitable ideas are tested.
Development Decision is to be made whether or not to produce
the product.
If OK, the business begins to produce.
The product is new in the market.
Sales are still low and increasing.
Introduction Promotion is needed to increase the sales and make
it aware widely.
Product is still not profitable.
The product is established in the market.
Sales begin to grow rapidly.
Growth The product becomes very profitable.
The business needs to seek new opportunities and
enlarge the market.
 Explanations of the stages of Product life cycle
Stages Brief explanations
The product has a stable market share.
The growth levels off in the sales.
Sales have reached the top.
Maturity
Competitors have entered the market.
The business needs to consider new product development or
innovate the product.
Too many competitors have entered the market.
Some businesses are forced out of their business.
Businesses have to develop some extension strategies to
Saturation
extend their product life cycle. For example, find new uses of the
product; finding new markets for the product; changing
components of the products, etc.
Sales decline.
Consumers have changed their taste or styles.
New products have to be produced by competitors
Decline
Businesses have to develop new products or improve the old
product with new technology or simply give up the product.
 Product Life Cycle
Uses of product life cycle:

The reasons why the business needs to analyze the

product life cycle are as follows:
1. It can help a business find out which stage its
product is in;
2. It can help to find out when to launch a new
product or stop the production of a product;
3. It can help to identify when to introduce an
extension strategy;
4. It can help to identify the revenue trends or
profitability of a product at each stage;
5. It can help to plan different marketing strategies
for a product in different life cycles
Marketing Strategy Implications of the
Product Life Cycle
 Categories of Nontraditional Marketing
 Expanding Marketings Traditional
Boundaries
Nontraditional Marketing
Person Marketingefforts designed to
attract attention, interest, and preference of a
target market toward a person

Place Marketingattempts to attract people

to a particular area, such as a city, state, or
nation
 Expanding Marketings Traditional
Boundaries

Nontraditional Marketing
Cause Marketingefforts to promote a
cause or social issue, such as the prevention of
child abuse, antilittering efforts, and anti-
smoking campaigns
Expanding Marketings Traditional
Boundaries
Nontraditional Marketing
Event Marketingmarketing or sponsoring
short-term events such as athletic competitions
and cultural and charitable performances

Organization Marketingattempting to
influence consumers to accept the goals of,
receive the services of, or contribute in some
way to an organization
 Developing a Marketing Strategy
Target Market and Marketing Mix within the
Marketing Environment
 Developing a Marketing Strategy
1. Decision-makers in any successful organization, for-
profit, or not-for-profit, follow a two-step process to
develop a marketing strategy:
a. They study and analyze potential target markets
and then choose among them.
b. They create a marketing mix to satisfy the
chosen market
2. A written marketing plan often becomes a key
component of a firms overall business plan as it
outlines its marketing strategy, includes information
about the target market, sales, and revenue goals,
and the timing for implementing the elements of the
marketing mix.
The End