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Marketing Mix

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									Marketing Mix
 Cameron Stevenson
The What and Why
    The Marketing mix is the blend of the four
    marketing elements of a product.
l   Very important for your business
l   Products wont succeed without marketing
    l   If the consumer doesn’t know it they wont buy it
Four Marketing Elements
l   Product
l   Distribution
l   Price
l   Promotion
Product
The item(s) you sell is your products.
l Product mix- products and services a
  business sells
l Product Features

l Product or Service Positions
Distribution
How to get the products and getting your
  product in the consumers hands.
l Channels of Distribution (Retail)

l Receiving the Goods

l Channels of Distribution (Service)

l Channels of Distribution (Manufacturing
  Business)
l Physical Distribution
              Channels of Distribution
              (Retail)

l   Tips for distribution:
    l   Open hours convenient for customer
    l   Catalogs, fliers, and other
        advertisements
    l   Orders by phone or fax and do the
        shipping
    l   Create a website
Receiving the Goods
    All business must receive
    goods from suppliers
l   List for locating distributors,
    wholesalers, and
    manufacturers
    l   American Wholesalers and
        Distributors Directory
    l   Thomas Register
    l   AT&T’s Business Buyer’s
        Guide
    l   Magazines
Channels of Distribution
(Service)
                l   Deal directly with
                    customer
                l   Service needs to be
                    available when the
                    customer wants it
                l   Keep customers in
                    mind
    Channels of Distribution
    (Manufacturing)

l   Make products to sell to other businesses
l   Possibly use all channels of distribution
l   Possibly use special channels of
    distribution
Physical Distribution
l   Transportation, storage,
    and handling of products
l   Transportation
    l   Airplane, pipeline, railroad,
        ship, truck, or combination
l   Storage and Handling
    l   Warehouses, shipyards, etc.
    l   Packaging protects product
Price
The dollar value of a product where revenue
  should exceed the expense.
l Objectives

l Determining the Price

l Pricing a Service

l Psychology of Pricing
Objectives
l   What do you want the price to do?
    l   Maximize sales
    l   Attract customers
    l   Discourage competition
l   Return on investment
    l   Percentage return from what they invested
l   Obtaining a market share
    l   Percentage of total sales in the market
    l   Attracting customers from competitors
Determining a Price
l   Demand-based pricing
    l   Pricing determined by how much customer will
        pay
l   Cost-based pricing
    l   Price using wholesale cost to determine price
        charge
    l   Markup- amount added to wholesale cost
    l   Use markdown when buying to much of a product
Determining a Price cont.
l   Competition-based pricing
    l   Pricing based off competitors price
        l Charge the same or less? Up to you.
Pricing a Service
    Cost of items, effort, and time must be
    considered
l   Time-based pricing
    l   Amount of time to complete the service
l   Bundling
    l   Combining prices together instead of several prices
l   Breakeven point
    l   Based on the cost of items used by seller
    l   No profit no loss
Breakeven Point
l   Revenue equals the cost of producing and
    distributing a product or service
    l   Fixed cost- cost to the business that never changes
    l   Variable cost- cost that relates directly to the number
        of the products sold
    l   Selling price- price expected to sell the product at


Fixed Cost / (Selling Price-Variable Cost) = Breakeven Point
Breakeven Point Example
Fixed Cost / (Selling Price-Variable Cost) = Breakeven Point
 ($10,00) (                            ) (              )
Psychology of Pricing
l   Perception of Savings- people pay more attention to
    $.99 tags than $1.00 tags
l   Perception of Value- consumers flock to bundled
    products thinking they can save much more money
l   Perception of Discounts- discount prices rarely fail in
    attracting customers
l   Perception of Unbundling- availability of payments
    makes the price seem cheaper

Click Here or Here for More Information
Promotion
Communication used to inform, persuade, or
  remind.
The advertisement selected to show potential
  consumers the product.
l Promotional Mix
 l   Advertising
     l   New Advertising
 l   Sales Promotion
 l   Publicity
 l   Personal Selling
 l   Promotional Plan
Inform
l   Provide information
    about a new product
l   Provide information
    about a changed
    product
l   Used in introduction
    stage of product
    lifestyle
l   Customers may make
    more intelligent
    purchase decision
Persuade
l   Encourages the
    customers to take a
    specific action
l   Not negative
l   Show advantages over
    competitors product
l   May need coupons,
    rebates, or free
    samples
Remind
l   Re tells about the
    product
l   Keeps the life cycle on
    going
l   Package new product
    in old boxes as a
    reminder of old times
Advertising
                    l   Television, radio,
                        newspaper, direct-mail,
                        magazine, outdoor,
                        telephone directory,
                        and transit
                    l   Most common
                        promotional type
                    l   Nearly everywhere
  Developing an
 Advertising Plan
Advertising cont.
Advantages          Disadvantages
l Reaches many      l Can be costly
  people
                    l Sometimes to
l Message can be      broad of an
  repeated            audience
New Advertising
l   Mobile
    l   Thousands everyday
l   Social Network
    l   Facebook
    l   Myspace
    l   Twitter
l   Internet
l   QR Code

For more information click here! (Source)
New Advertising cont.
l   Five most powerful online advertising
    l   Search engine
    l   Website
    l   Free re-print promotional articles
    l   Ezine
    l   Pay-per-click

    For more information click here! (Source)
QR Codes
l   Two-dimensional
    barcode (matrix code)
l   Scan like a barcode
    and get information
    stored in the coding
Sales Promotion
l   Offer a customer direct
    incentive to buy
l   Coupons, sweepstakes,
    contest, rebates, and free
    samples
Sales Promotion cont.
       Advantages                Disadvantages
l   Generates immediate     l   Costly
    short-term sales        l   May not succeed so
l   Used to support other       you loose money
    parts of promotion
Publicity
l   Transmitted through mass medium
l   Non-paid communication about a business

Advantages
l Goodwill created for product

l Can be cheap



Disadvantage
l Organization has little control over it
Personal Selling
l   Person to person effort to inform, persuade, or remind a
    customer

Advantage
l Personal contact

l Immediate customer feedback



Disadvantages
l Per-person cost

l High cost per customer

l Every encounter doesn’t make a sale
Promotional Plan
l   Analyze the Market
l   Identify Target Market
l   Develop Promotional Objectives
l   Develop Promotional Budget
l   Select Promotional Mix
l   Implement Promotional Plan
l   Evaluate Results
Analyze the Market
l   Conduct market
    research
Identify the Target Market

               l   Information obtained from
                   analysis helps determine
                   target market
               l   Segmentation of market
                   helps to identify needed
                   promotional strategies
Develop Promotional
Objectives
l   Identify purpose or expected result of
    promotion
l   Based on completed market research
l   Flexible and reviewed periodically
Develop Promotional Budget
l   Done with leftover money
l   Careful planning and
    managerial commitment
    needed
l   Based on expenses from
    previous year
Select Promotional Mix
l   Reach target market, achieve organizational
    objectives, remain within budgetary
    guidelines
l   Decides:
    l   Advertising
    l   Personal selling
    l   Publicity
    l   Sales promotion
Implement Promotional Plan
l   Naming people and departments responsible
    for implementation of product sections
l   Specific dollar amounts associated with each
    activity
Evaluate Results
l   Evaluate strategies to see if they should be:
    l   Continued
    l   Altered
    l   Redone
l   Research on customers before and after
    product usage
Developing an Advertising
Plan
l   Set Objectives
l   Determine the Budget
l   Develop the Theme
l   Select Media
l   Create the Advertisement
l   Develop the Ad Schedule
l   Evaluate Effectiveness
Set Objectives
l   Desired results
    l   Specific message to be communicated
    l   Target audience
    l   Specific period of time
l   Very detailed and measurable
Determine the Budget
l   Decide what you can afford
l   Percentage of Sales
    l   Bugets a percentage of past, present, or projected
        sales
l   Competitive Matching
    l   Spend similar amounts to competitors
Develop the Theme
l   Idea, appeal, or benefit around which all
    advertising messages in a plan revolve
Select Media
l   Type and the actual media
l   Major media:
    l   T.V., radio, newspapers, and magazines
l   Analyze cost, reach, frequency, and lead
    time
Create the Advertisement
l   Reach target market, be consistent, reflect chosen
    theme, fit within budget.
l   Slice-of-Life
l   Fantasy
l   Musical
l   Technical Expertise
l   Testimonial
l   Lifestyle
l   Mood or Image
l   Character
l   Scientific Evidence
Slice-of-Life
l   People using the
    product in an everyday
    setting
Fantasy
l   Fantasy about using the product
l   Ex- Women combining themselves
    to follow you is a fantasy
Musical
l   People or characters
    singing about the
    product
Technical Expertise
l   Manufacture or
    producer explaining
    how product was made
Testimonial
l   Celebrities or everyday
    people endorsing
    product
Lifestyle
l   Shows product or
    lifestyle in relation to a
    lifestyle
Mood or Image
l   Portrays a specific
    emotion
Character
l   Fictitious characters to
    represent a product
Scientific Evidence
l   Uses actual information
    on why the product is
    superior
Develop the Add Schedule
l   Continuity
    l   The ad will be scheduled regularly
l   Pulsing
    l   Increase advertising efforts during a specific
        period of time
Evaluate Effectiveness
l   Measuring how well the advertising plan
    achieves its original objectives
l   In coupons, rebates, etc. evaluate the usage
    rate

l   Evaluate during use and development of ad
Regulating Advertising
l   State, local, and federal regulations
l   Must be honest
l   FTC and FCC main organizations that govern
    advertisement
l   The following link contains the regulations

								
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