The Seven Ps of the Marketing Mix

The Seven Ps of the Marketing Mix

• The marketing mix comprises seven core elements: product, price, promotion, place, processes, people, and physical evidence.
• This subtopic investigates these core elements.

Product

• A product is the outcome of a production process, using resources to fulfill a need or want.
• Goods are tangible; they possess physical characteristics and are measurable.
• Services are intangible; they cannot be touched or described by physical characteristics.

Product Life Cycle

• A model guiding business decisions regarding a product's marketing mix.
• The product life cycle demonstrates a typical sales trend over time.
• Stages: Research and Development, Introduction, Growth, Maturity, and Decline.

Research and Development (R&D)

• The R&D stage precedes product release and encompasses all activities before the market introduction.
• The duration of this stage varies by industry and specific product.
• The process may involve extensive testing (e.g., pharmaceutical drugs) or be quite short (e.g., fast fashion).
• Promotion during the R&D phase can generate a buzz about a product.

Introduction Stage

• This stage signifies the product's market launch.
• Initial sales figures tend to be low initially but increase gradually afterward.
• The business must create awareness about the product and highlight its unique selling points (USPs).
• Pricing and distribution strategies deserve careful consideration.

Growth Stage

• Characterized by increasing product sales.
• Businesses often increase their target market by exploring new markets.
• The marketing mix often adapts with strategic adjustments in pricing and distribution channels.
• Promotional messages target the new markets to enhance product awareness further.

Maturity Stage

• High and stable revenue is typical in this stage.
• Sales growth slows.
• The market may become saturated or crowded with competitors.
• Focus shifts to building customer loyalty rather than seeking new customers.

Decline Stage

• Falling sales and market share define this stage.
• Products may no longer satisfy the market's demands or have lost their uniqueness.
• Technology advancements or shifts in customer needs may factor into this.
• Prices may be reduced, and distribution channels, like discount retailers, are used.

Extension Strategies

• Strategies businesses apply to extend the product's maturity stage.
• Repositioning the product through redesigns or color/shape changes is one such strategy.
• Another strategy involves adding new features or attributes to the product.
• Adjusting the pricing to appeal to new customer bases or specific segments is a technique used in this regard.

Product Branding

• A brand is a name, symbol, or design that identifies a product or company.
• Strong brands provide character and establish consumer recognition.
• This encompasses brand awareness, which signifies the degree of consumer's product recognition based on its characteristics and name.
• Strong brands facilitate the launch of secondary products.
• When customers display brand loyalty, they exhibit less need for persuasion in purchasing related products.

Product Packaging

• Packaging is often the only aspect of a product consumers encounter before purchase.
• Packaging may not always reflect the product's quality.
• Visual impact helps a product stand out from competitors.
• Packaging often includes substantial information regarding the product, including ingredients, materials, price, and safety/health data.
• Promoting product USP is another role of the packaging through typography, colors, and shape.

Pricing Methods

• Setting the correct price for a product is challenging.
• Potential losses occur at too high or too low prices.
• Businesses must research and analyze the market to determine suitable prices.
• Several methods exist for setting prices, such as cost-plus, penetration, loss leader, premium, and competitive pricing.

Price Elasticity of Demand

• Price elasticity of demand (PED) evaluates how changes in pricing affect a product's demand.
• PED measures percentage changes in product demand relative to percentage price changes.
• Values of the PED: Greater than 1 (price elastic), between 0 and 1 (price inelastic), and equal to 1 (unitary elastic).

Promotion

• Promotion encompasses advertising, sponsorships, sales promotions, and personal selling.
• These methods aim to inform and persuade customers to purchase a product.
• Effective promotion boosts product and brand visibility and enhances the business image.

Above-the-Line (ATL) Promotion

• Advertising aimed at mass audiences using various mediums such as television, radio, newspapers, and magazines.
• Often not targeted toward specific customers.

Below-the-Line (BTL) Promotion

• Any promotion not conducted through mass media.
• Can be cheaper and more viable for smaller businesses.
• Suitable for businesses conducting targeted promotions or activities that do not involve mass media.

Direct Marketing

• Targeted marketing delivers messages to customers using email addresses, phones, or mail.
• More sophisticated due to recent advancements.
• User tracking enables tailored advertisements throughout the customer's experience on the internet.

Sales Promotion

• Includes special offers like buy one get one free, discounts, free samples, competitions, and in-store displays.
• Effective in attracting price-sensitive buyers and boosting short-term sales.
• Many retailers strategically place these promotions to optimize the visibility and impact of sales drives.

Loyalty Cards

• Loyalty cards provide rewards for repeat customers.
• These cards yield increased revenue for businesses from price-sensitive clients
• Often in the form of points redeemable for discounts, further upgrades in service, free products, and other incentives.

After-Sales Service

• Customer relations continue beyond product purchases; include maintenance, problem-solving, and additional support.
• Essential for building strong customer relationships and trust.
• Businesses implementing this well enhance their reputation and build repeat customer bases.

Public Relations (PR)

• Improves your business's image by managing how the public perceives you.
• Involves linking your business with the local community through charitable causes or support.
• Addresses crises and maintains a transparent approach, crucial in maintaining positive relationships and avoiding reputational damage.

Merchandising

• Branded items, such as pens, stationery, and apparel, that improve brand awareness.
• Items increase recognition and visibility of a business.

Exhibitions and Trade Fairs

• Excellent platforms for displaying many products.
• Facilitate product exploration in a single location, making it easier for consumers to compare and examine various offerings.
• Companies presenting their items through exhibits can reach large numbers of potential customers simultaneously.

Social Media

• The utilization of social media platforms (like Instagram, Facebook, TikTok) by businesses to communicate with potential customers.
• Businesses must be aware of how these platforms work and effectively use the platform to communicate with customers.

Paid Advertisements

• Paid advertisements are a crucial component of social media promotion.
• Social media platforms use user data to deliver targeted advertisements relevant to users' interests.
• This approach often significantly benefits businesses by improving visibility to their precise target market.

Content Generated by Users

• Businesses share content generated by other users on social media regarding the business or the product, which builds trust and potentially broader reach.
• Difficult to control this content (since it's generated by users rather than directly produced by the business), leading to unpredictability, which may pose challenges.

One-to-One Messages

• Direct communication with customers through private messaging on social media platforms.
• Offers personalized customer service solutions.
• Can be a valuable tool for businesses to enhance customer experiences and to improve responsiveness to customer queries and concerns.

Influencers

• Influencers are social media personalities who can affect customers' opinions and preferences regarding a product or service.
• Often used for boosting sales, especially on social media platforms.

Advantages of Using Social Media (for promotion)

• Low-cost diversification.
• Enhanced perception of customer interactions.
• Facilitated monitoring and assessment of business performance.
• Increased comprehension of customer preferences.

360-Degree Marketing

• This holistic approach integrates various promotion elements, both above and below the line, to reach the target market.
• Aims to strengthen brand impact.

Through-the-Line (TTL) Promotion

• Combines both ATL and BTL promotion methods simultaneously to maximize advertising visibility and impact.

Place (Distribution Channels)

• Refers to delivering the product to customers.
• Producers have two options: Direct sales to consumers or use intermediaries.

Wholesalers

• Specialized in buying bulk from producers and reselling to retailers.
• Play a crucial role in reducing delivery costs.

Retailers

• Purchase from wholesalers/producers, then sell to consumers.
• Range from convenience stores to large supermarkets, adapting to diverse customer needs and preferences.

Agents

• Act on behalf of producers, promoting and selling products without owning them.
• Charge a commission on each sale.

Physical Evidence

• The tangible aspects of a business's interaction with customers.
• Customer perception can be affected by the physical environment; hence, proper design and tidiness are crucial.
• The appearance and cleanliness of the service environment are critical for influencing customer perception.

The Relationship between Product Life Cycle and Marketing Mix

• The marketing mix adjustments are contingent on product life cycle stages.
• During the Introduction stage, focus is on creating awareness.
• The Growth stage involves strategies that cater to expanding the market share and increasing sales figures.
• The Maturity stage is dominated by efforts to build customer loyalty and sustain market share.
• The Decline stage sees reduced marketing expenditures, with primary emphasis on maintaining profitability and managing waning sales figures.

The Relationship between Product Life Cycle and BCG Matrix

• Products in the introduction stage match question marks/problem children classifications.
• The growth stage corresponds with stars in the BCG matrix.
• Products with maturity align with the cash cow category.
• Decline stages are commonly associated with dogs in the BCG matrix classifications.

Relationship between Product Life Cycle, Investment, Profit, and Cash Flow

• Investment/spending levels fluctuate across different product life cycle stages.
• Investment usually surges in the introductory stage and tapers off towards the decline.
• Profits tend to be lowest in the introductory stage and increase as a product matures.
• Profitability is often maximized during the maturity stage and is usually nonexistent or declining in the decline stage.

Place - Examples

• Amazon as a retailer/wholesaler/agent is an appropriate example for use in this context.