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Marketing Mix


									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
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
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
l Physical Distribution
              Channels of Distribution

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

l   Make products to sell to other businesses
l   Possibly use all channels of distribution
l   Possibly use special channels of
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
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
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
l   Cost-based pricing
    l   Price using wholesale cost to determine price
    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
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
Communication used to inform, persuade, or
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
l   Provide information
    about a new product
l   Provide information
    about a changed
l   Used in introduction
    stage of product
l   Customers may make
    more intelligent
    purchase decision
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
l   Re tells about the
l   Keeps the life cycle on
l   Package new product
    in old boxes as a
    reminder of old times
                    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
                    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
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
l   Transmitted through mass medium
l   Non-paid communication about a business

l Goodwill created for product

l Can be cheap

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

l Personal contact

l Immediate customer feedback

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
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
l   Identify purpose or expected result of
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
l   Based on expenses from
    previous year
Select Promotional Mix
l   Reach target market, achieve organizational
    objectives, remain within budgetary
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
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
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
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
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
l   People using the
    product in an everyday
l   Fantasy about using the product
l   Ex- Women combining themselves
    to follow you is a fantasy
l   People or characters
    singing about the
Technical Expertise
l   Manufacture or
    producer explaining
    how product was made
l   Celebrities or everyday
    people endorsing
l   Shows product or
    lifestyle in relation to a
Mood or Image
l   Portrays a specific
l   Fictitious characters to
    represent a product
Scientific Evidence
l   Uses actual information
    on why the product is
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

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
l   The following link contains the regulations

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