Marketing

Tools: Each of
the
 What is 4P’s?
- It is popularized by Neil Borden in 1950.

- It is known as Marketing Mix

- Before the internet and greater integration between businesses

and consumers, the marketing mix helped companies account for
the physical barriers that prevented widespread product
adoption.
- Marketing mix is a particular combination of the product, its
price, the methods to promote it, and the ways to make the
product available to the customer.
Product Place

Price Promotion
 Product
It refers to a good or service a company offers. Ideally,
a product should meet a certain consumer demand or be
so compelling that consumers believe they need it. The
type of product also partially dictates how much
businesses can charge for it, where they should place it,
and how they should promote it.
 An important element of product strategy is new product
development. As technologies and tastes change, products
become out-of-date and inferior to competition. So companies
must replace them with new designs and features that customers
value. The challenging task is to include the latest available
technologies and solutions to the latest needs of the customer
in a company’s product.

Product decisions involve choices regarding brand names,

warranties, packaging and services which should accompany
the product offering.
 Components of Product

Core Product Formal Product Augmented Product

- End benefit of buyer - The actual or perceived - Support items

characteristics of the that complete the
product including its total product
level of quality, special offering.
features, styling,
branding or packaging
 STRENGTHs
Competitive Advantage
The greatest strength of effective
product positioning is that it can
create a competitive advantage. In
other words, if a company can
establish its products as uniquely
valuable, competitors will find it
difficult to make a compelling case for
buying substitutes.
Perception
Another potential strength of
product positioning is that the most
important factor in consumer
purchasing decisions can be
perception, not necessarily reality. In
other words, rather than create an
objectively better product, a company
can use a variety of marketing
techniques to position its products
favorably in the minds of consumers.
 Weaknesses
High Competition
A potential weakness of product
positioning is that every company wants to
position its products favorably in the
minds of consumers, so there is usually a
high level of competition. New companies,
for example, often find it difficult to
position their products in a market that
has well-established competitors. Also,
carving out a niche in a large and
competitive market is often difficult for
small businesses, so many newcomers
focus on a very narrow segment at the
start, building their brand identities before
stepping into larger competitive arenas.
Inevitable Change
Another weakness of product
positioning is that maintaining a
competitive position in a market is
always difficult. Consumers might tire
of a company’s products, for example,
requiring the company to freshen its
image by developing new products or
by significantly improving old
products. This can be especially hard
if the company has fostered a brand
image that is starkly different from the
new identity it wants to adopt.
 Price
This refers to the value that is put for a product. It
depends on costs of production, segment targeted,
ability of the market to pay, supply - demand and a
host of other direct and indirect factors. Pricing can
also be used to differentiate and enhance the image
of a product.

Pricing is one of the most important elements of

the marketing mix.
 Stages in Price Setting
Step 1: Selecting the Pricing Objective
Step 2: Determining Demand
Step 3: Estimating Costs
Step 4: Analyzing Competitors’ Costs, Prices, and Offers
Step 5: Selecting a Pricing Method
Step 6: Selecting the Final Price
 Pricing Factors
Pricing should take the following factors into account:

• Fixed and variable costs

• Competition

• Company objectives

• Proposed positioning strategies

• Target group and willingness to pay

An organization can adopt a number of pricing strategies, the pricing

strategy will usually be based on corporate objectives.
 Place
 Place: in the marketing sense refers to the Distribution of
the Product.

 Roll of Place Decisions: The product needs to be available

were customers want it

 The objective of distribution is clear. It is to:

“To make products available in the right place at the right
time in the right quantities”
 Four Types
of
Channel of Distribution
 Consume
Producer
r

Producer sells the

product directly to
the consumer.
 Producer > Consumer

ADVANTAGE DISADVANTAGE
 Producer will get all the profits  Consumers won’t be able to
 Producer controls all see or try the product
marketing mix  Delivery cost may be high
 Quickest method  Producer pays the storage
costs and finances
Producer Consume
Retailer
r

Producer sells the products

directly to the retailer
 Producer >Retailer>Consumer

ADVANTAGE DISADVANTAGE
 Consumers can see or try  Retailers take a portion of
the products the profit
 Storage Costs is shared  Producers lose control over
with both producers and marketing mix
retailers  Retailers also sell
 Retailers pay for any competitors products in
advertisement their shops
 Convenient for consumers
Producer Wholesale Retailer Consumer
r

Producer sells in large quantities in

wholesalers. The wholesalers then sell
in smaller quantities in retailers, who
then sells it to the consumers
 Producer >Wholesaler>
Retailer>Consumer

ADVANTAGE DISADVANTAGE
 The wholesaler buys in bulk  Less profit for the producer
from the producer
 Less control over marketing
 Transportation cost is paid mix
by wholesaler
 Wholesaler pays for storage
costs
 Sells the product to a larger
market
Producer Agent Wholesale
Retailer Consumer
r

An agent is used when a business enters

a foreign market usually because agents
have specialist knowledge about a
particular country and its market
 Producer >Agent>Wholesaler>
Retailer>Consumer

ADVANTAGE DISADVANTAGE
 It is better to use an agent  Less profit for the producer
as they have specialist
knowledge
 Why use intermediaries?
 Geography- customers may live too far away to be
reached directly or spread widely
 Consolidation of small orders into large ones
 Better use of resources elsewhere
 Lack of retailing expertise
 Segmentation - different segments of the markets can
be best reached by different distribution channels
Factors to Consider… 
 Nature of the product
– Perishable/fragile?
– Technical/complex?
– Customized
– Type of product – e.g. convenience
– Desired image for the product
Factors to Consider… 
 The market
– Is it geographically spread?
– The extent and nature of the competition

 The business
– Its size
– Its nature
– Does it have established distribution network?
 PROMOTIO
N
Advertising, public relations and promotional
strategy. This ties into the other three Ps of the
marketing mix as promoting a product shows
consumers why they need it and should pay a
certain price for it. In addition, marketers tend to
tie promotion and placement elements together
so they can reach their core audiences.
Composition of Promotional Mix

 Stage in the products life cycle- Advertisement and PR are often

important at the launch stage
 Nature of the product – What information do customers require before
they buy?
 Competition – What are rivals doing? What promotional methods are
traditionally effective in a market?
 Marketing Budget – How much can the firm afford?
 Marketing strategy – Other elements of the mix
 Target market- Appropriate Ways to reach the target market
Effective Methods of Promotion
 Marketing Communication is the method of
informing, influencing and persuading.

 Either about the product or the services .

Uses of Promotion
 Increase Sales
 Attract new customers
 Encourage loyalty of ones customer
 Encourage Trial
 Create awareness
 Reassure new customers
 Change Attitudes
 Create an image
 Encourage brand switching
 Distribution channel
Elements
o Advertising
o Sales Promotion
o Personal Selling
o Public Relations
Elements must be:
Cohesive
o Direct Market Consistent
Logical Manner
 Effective Ineffective

Efficient Objectives achieved Low promotion

at lowest cost budget but
Effective and cost objectives not
efficient achieved

Inefficient Objective achieved Expensive

but at high cost promotion which
fails to achieve
objective
 Advertising
Advantages
 Wide Coverage
 Control of message
 Repetition means that the
message can be
communicated effectively
 Build brand loyalty
Disadvantages
 Often expensive
 Impersonal
 One way communication
 Lacks flexibility
 Limited ability to close a
sale
 Personal Selling
Advantages Disadvantage
 High customer attention  High cost
 Message is customized  Labor intensive
 Interactivity  Can only reach a limited
 Persuasive impact number of customers

 Potential for development of

relationship
 Adaptable
 Opportunity to close the sale
 Sales Promotion
Advantages Disadvantages
 Effective at achieving a  Sales effect may only be
quick boost to sales short term
 Encourage customers to  Customers may come to
trial a product or switch expect or anticipate further
brands promotions
 May damage brand image
 Public relations
- A goodwill action that is created toward an individual,
business, cause and even a product

Activities mostly focus on:

 Promoting new product
 Enhancing public awareness
 Projecting a business image
 Promote social responsibility
 Projecting business as a good employer
 Favorable reviews
GAME???
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