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Questions and Answers
Which element of the marketing mix focuses on the characteristics of a product or service?
What is a key consideration when determining the price of a product or service?
Which of the following is an example of a promotional activity?
What is the extended marketing mix also known as?
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What is Physical Evidence an aspect of in the extended marketing mix?
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What is the term used to describe the incomes earned by the factors of production?
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What is the difference between GDP and GNP?
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What does the term 'net' refer to in the context of national income?
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Study Notes
Marketing Mix
The marketing mix, also known as the 4 Ps, is a framework used to guide marketing strategies and tactics.
Product
- What your company sells or offers to meet the needs of your target market
- Characteristics:
- Features
- Quality
- Design
- Branding
- Packaging
- Warranty and support
Price
- The amount your customer pays for your product or service
- Factors to consider:
- Production costs
- Distribution costs
- Profit margins
- Competitor pricing
- Customer perceived value
Promotion
- All activities that communicate the value of your product or service to potential customers
- Types:
- Advertising
- Sales promotions
- Personal selling
- Public relations
- Digital marketing (e.g. social media, email)
Place
- The distribution and logistics of getting your product or service to the customer
- Channels:
- Direct sales
- Retail
- Wholesale
- Online sales
- Physical distribution (e.g. transportation, storage)
Extended Marketing Mix (7 Ps)
- The 4 Ps plus three additional elements:
- People: Human resources and customer service
- Process: Systems and procedures for delivering products and services
- Physical Evidence: Tangible aspects of the product or service (e.g. ambiance, packaging)
Marketing Mix (4 Ps)
- The marketing mix is a framework guiding marketing strategies and tactics.
Product
- Refers to what a company sells or offers to meet target market needs.
- Characteristics include:
- Features
- Quality
- Design
- Branding
- Packaging
- Warranty and support
Price
- The amount customers pay for a product or service.
- Factors to consider when setting a price:
- Production costs
- Distribution costs
- Profit margins
- Competitor pricing
- Customer perceived value
Promotion
- Includes all activities communicating the value of a product or service to potential customers.
- Types of promotion:
- Advertising
- Sales promotions
- Personal selling
- Public relations
- Digital marketing (e.g. social media, email)
Place
- Refers to the distribution and logistics of getting a product or service to the customer.
- Channels for delivering products or services:
- Direct sales
- Retail
- Wholesale
- Online sales
- Physical distribution (e.g. transportation, storage)
Extended Marketing Mix (7 Ps)
- The 4 Ps plus three additional elements:
People
- Human resources and customer service.
Process
- Systems and procedures for delivering products and services.
Physical Evidence
- Tangible aspects of the product or service (e.g. ambiance, packaging).
National Income Concepts
- There are different concepts of national income, including Gross Domestic Product (GDP), Gross National Product (GNP), and Net National Product (NNP)
Factor Incomes
- Factor incomes include rent, employment income, interest, and profit
- These incomes are earned by the factors of production:
- Land earns rent
- Labour earns wages
- Capital earns interest
- Entrepreneurship earns profit
National Income and Product
- National income is also called Net National Product (NNP)
- The terms "income" and "product" are two different aspects of the same circular flow of income
- The term "net" means "after deducting an amount for capital consumption or depreciation of fixed assets"
Gross Domestic Product (GDP)
- GDP is the aggregate of values added from economic activities within a country's geographical boundary
- GDP is measured gross, before deducting an amount for capital consumption or depreciation of fixed assets
- It is the total value of income/production from economic activity
Gross National Product (GNP)
- GNP is the gross domestic product (GDP) plus net property income from abroad
- Net property income from abroad is the difference between income generated from overseas investments and income earned by non-residents within the home country
Relationship between GDP, GNP, and NNP
- GDP + Net property income from abroad = GNP
- GNP - Consumption of fixed capital and national resource depletion = NNP
Nominal and Real GNP/GDP
- Nominal GNP is the value of national income at current market prices
- Real GNP is valued at the prices of a base year and strips out the effect of inflation on national income levels
- Real GNP helps to establish trends in national income over time and discover whether the economy is expanding in terms of production or earnings
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Description
Test your knowledge of the marketing mix, a framework used to guide marketing strategies and tactics, including product, price, promotion, and place.
