The term “marketing mix” was coined in 1953 by Neil Borden in his American Marketing Association presidential address. However this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948 described the role of the marketing manager as a “mixer of ingredients”, who sometimes follows recipes prepared by others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe from immediately available ingredients, and at other times invents new ingredients no one else has tried. A prominent marketer, E. Jerome McCarthy, proposed a Four P classification in 1960, which has seen wide use. The Four P’s concept is explained in most marketing textbooks and classes.
-Definition: Marketing mix is the combination of elements that you will use to market your product. There are four elements: Product, Place, Price and Promotion. They are called the four Ps of the marketing mix
Product – A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are service based like the tourism industry & the hotel industry or codes-based products like cellphone load and credits. Typical examples of a mass produced tangible object are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. Packaging also needs to be taken into consideration. Every product is subject to a life-cycle including a growth phase followed by an eventual period of decline as the product approaches market saturation. To retain its competitiveness in the market, product differentiation is required and is one of the strategy to differentiate from its competitors
Level 1: Core Product. What is the core benefit your product offers?. Customers who purchase a camera are buying more then just a camera they are purchasing memories.
Level 2 Actual Product: All cameras capture memories. The aim is to ensure that your potential customers purchase your one. The strategy at this level involves organisations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors.
Level 3: Augmented product: What additional non-tangible benefits can you offer? Competition at this level is based around after sales service, warranties, delivery and so on. John Lewis a retail departmental store offers free five year guarantee on purchases of their Television sets, this gives their `customers the additional benefit of peace of mind over the five years should their purchase develop a fault.
When placing a product within a market many factors and decisions have to be taken into consideration. These include:
Product design: Will the design be the selling point for the organisation as we have seen with the iMAC, the new VW Beetle or the Dyson vacuum cleaner.
Product quality: Quality has to consistent with other elements of the marketing mix. A premium based pricing strategy has to reflect the quality a product offers.
Product features: What features will you add that may increase the benefit offered to your target market? Will the organisation use a discriminatory pricing policy for offering these additional benefits? Additional features should increase the benifit offered to your target market. The firm may decide to charge more for these additional features.
Branding: One of the most important decisions a marketing manager can make is about branding. The value of brands in today¿½s environment is phenomenal. Brands have the power of instant sales, they convey a message of confidence, quality and reliability to their target market.In principles of marketing by philip Kotler and gary armstrong a brand is defined as ‘a name, term, sign symbol or a combination of these, that identifies the marker or seller of the product.’ A brand must stand out and be recognizable, and should help the firm differentiate itself from its competitors.
Brands have to be managed well, as some brands can be cash cows for organisations. In many organisations they are represented by brand managers, who have hugh resources to ensure their success within the market.
A brand is a tool which is used by an organisation to differentiate itself from competitors. Ask yourself what is the value of a pair of Nike trainers without the brand or the logo? How does your perception change?
Increasingly brand managers are becoming annoyed by ¿½copycat¿½ strategies being employed by supermarket food retail stores particular within the UK . Coca-Cola threatened legal action against UK retailer Sainsbury after introducing their Classic Cola, which displayed similar designs and fonts on their cans.
Internet branding is now becoming an essential part of the branding strategy game. Recently within the UK banking industry we have seen the introduction of Internet banks such as cahoot.com and marbles.com the task by brand managers is to make sure that consumers understand that these brands are banks!
The price is the amount a customer pays for the product. The business may increase or decrease the price of product if other stores have the same product
pricing is one of the most important elements of the marketing mix. It is the only mix which generates a turnover for the organization. The remaining 3 p’s are the varaible cost of the organisation. It costs to produce and design a product, it costs to distribute a product and it costs to promote a product. Pricing is diffiicult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organisation.
Pricing should take into consideration the following factors:
1.Fixed and variable costs.
4.Proposed positioning strategies.
5.target group and willingness to pay.
An organisation can adopt a number of pricing strategies among the following.
Where the org sets a low price to increase sales and market share.
The org sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.
Setting a price in comparision with competitors.A firm has three options, price lower, price the same or price higher.
4.Product line pricing:
Pricing different products within the same product range at different price points.The greater the features and benifits obtained the greater the consumer will pay.
the organisation bundles a group of products at a reduced price.
The seller will consider the psycology of the price and the positioning of the price within the market place. The seller with therefore charge 99p instead of ¿½1 or ¿½199 instead of ¿½200.
The price set is high to reflect the exclusiveness of the product.
The organisation sells optional extras along with the product to maximise its turnover.
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