Marketing Mix and the 4Ps Overview

Marketing Mix

• A set of elements considered by companies for their business.
• Also referred to as the 4Ps.
• Products, Price, Place, and Promotion are the elements.

What are the 4Ps?

• Product: Offered by a firm, satisfying customer needs.
• Price: The amount the firm sells the product for.
• Place: The method the firm uses to make products available.
• Promotion: The strategies companies employ.

Products and Services Defined

• Tangible and intangible.
• Goods, services, and ideas are the main product types.
• Goods are physical products.
• Services are intangible products.

Levels of Products

• Core or Generic Product: The essential function of the product.
• Actual Product: Basic features of the product.
• Extended Product: Additional features added.
• Modified Product: Meeting new customer demands.
• Potential Product: Future additions or changes planned.

Classification of Products

• Consumer Products: Personal use by customers.
  • Types of Consumer Products:
    • Convenience: Frequently bought.
    • Shopping: Less frequent purchase.
    • Specialty: Exclusively distributed.
    • Unsought: Not actively sought by consumers
• Industrial Products: Used by companies
  • Types of Industrial Products:
    • Raw materials: Used to create new products.
    • Finished products: The final product.
    • Equipment: Tools used in production.
    • Supplies: Items used in production but are not necessarily a direct component of the final product.

Packaging, Labeling and Branding

• Packaging: Enclosing the product in a container.
• Labeling: Provides information about the product.
• Branding: Companies use branding to differentiate their products.
• Scramble Merchandise: Grouping of related products.

Stages in Developing a Product

• Idea generation (internal or external sources).
• Idea screening (careful review).
• Project planning.
• Product development (prototype creation).
• Test marketing (small-scale testing).
• Commercialization.

Product Life Cycle (PLC)

• Encompasses the stages of a product's existence.
  • Introduction: Initial launch.
  • Growth: Increasing awareness and sales.
  • Maturity: Peak sales performance.
  • Decline: Declining sales. Product Diffusion: Progression of the product.

Types of Adopters

• Innovators: Willing to try new products.
• Early adopters: Less adventurous but still willing to try new things.
• Early majority: Those who wait before adopting a product.
• Late majority: Adopting products mostly because they are already popular.
• Laggards: Consumers who adopt a product very late.

Nature and Characteristics of Services

• Intangibility: Cannot be seen or touched.
• Inseparability: Produced and consumed simultaneously.
• Variability: High dependence on service providers.
• Perishability: Cannot be stored for future use.

Price

• Related to revenue.
• Pricing concepts: Computation, variability, and price and quality.
• Customer value: Benefits customers gain from purchasing.

Pricing Objectives

• Survival pricing: Used in heavy competition.
• Market penetration pricing: Increasing market share, often below competitors' prices.
• Market skimming pricing: High initial prices to maximize profits from early adopters.
• Parity pricing: Benchmarking prices against competitors.
• Regulated pricing: Following government regulations.

Common Pricing Strategies and Schemes

• Cost-based pricing: Considering production costs.
• Demand-based pricing: Understanding the customer's value.
• Break-even pricing: Determining the point where revenue equals costs.
• Psychological pricing: Appealing to customer perceptions of affordability.
• Time-based pricing: Based on the time involved.
• Location-based pricing: Considering customer location.
• Competitive pricing
• Premium pricing

Place (Distribution Channels)

• Distribution channels: Pathways for products to reach consumers.
• Marketing intermediaries: Individuals or businesses involved in product distribution.
• Manufacturers, suppliers, wholesalers, retailers, distributors and agents are common marketing intermediaries.
• Direct marketing: Manufacturer sells directly to consumer (e.g. online).
• Indirect marketing: Uses intermediaries to reach consumers (traditional approach).

Distribution Channels Examples

• Vending machines, sidewalk kiosks, home services.
• Gray marketing unauthorized distribution of genuine products.

Intensity of Distribution

• Exclusive: Employing one intermediary in a specific area.
• Selective: Using several intermediaries.
• Intensive: Utilizing many outlets.
• Vertical marketing systems.
• Horizontal marketing systems.

Online Banking, Telemarketing

• Online banking: Used for product payments online.
• Telemarketing: Directly contacting customers through phone/internet.

Concerns in Utilizing Distribution Channels

• Logistical issues.
• Failing to meet needs.
• Pressure from channel leaders.
• Franchise chain stores.

Supply Chain Management

• Managing resources orderly, for orderly production and delivery.
• Upstream: Raw materials, inbound logistics.
• Downstream: Wholesalers and retailers.

Promotion

• Communication with customers about products and their benefits.
• Part of the marketing mix (communication strategies/mix).

Targets of Promotional Activities

• Current, former, and prospective customers.
• Influencers with impact on purchasing decisions.

Promotional Mix

• Advertising: Paid, non-personal promotion.
• Sales promotions: Short-term incentives for sales improvement.
• Public relations: Maintaining positive public relations
• Personal selling: Direct interaction with customers.

Types of Promotional Strategies

• Push strategies: Promoting products through channels to consumers
• Pull strategies: Directly attracting customers to a product.

Methods to Set Promotion Budget

• Percentage-of-sales method: Simpliest method, but also has disadvantages.
• Affordable method: Based on what can be afforded.
• Competitive parity method: Matching competitors' budgets.
• Objective-and-task method: Setting goals and defining tasks to achieve those goals.

Guerilla Marketing

• Unique method through unconventional techniques to attract customer attention.
• Examples: Viral or buzz marketing, street marketing, wild posting.

Market Analysis and Segmentation

• Understanding market conditions.
• Identifying target markets.
• Analyzing competitors' strategies and market shares.
• Analyzing specific market segments.

Marketing Planning, Strategy, and Implementation

• Comprehensive marketing plan.
• Defining target market, marketing mix.
• Defining marketing strategy.
• Implementation and control.

Marketing Implementation and Control

• Execution of marketing strategies.
• Interdependence of strategies and planning.
• Implementation steps.
• Establish marketing control to ensure alignment with objectives and corrections of deviations

How to Make a Marketing Plan (Format)

• Specific sections to include for developing a comprehensive marketing plan.
• Essential components for a well-structured plan.