"Marketing mix is the combination of controllable marketing variables that the firm uses to follow the required level of sales in the target market", (Philip kotlar).
The marketing mix is well-known commercial terms. The marketing mix is the operational or tactical marketing plan. The marketing mix is also called the 4Ps and 7PS. The 4 Ps is price, place, promotion and products.
In all aspects of the marketing mix, price is the one that creates sales revenue - all the rest/others are costs. The price of an item is clearly a key determinant of the value of sales. In theory, the price is determined by the discovery of what customers perceive the value of the item for sale. Research into consumer views on prices is important, as it indicates how they value what you are looking and what you want to pay. A political organization pricing will vary according to time and circumstances.
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Although the data/figure is different from one product to another, about a fifth of the cost of a product goes on getting it to the customer. The "place" refers to the various types of transport and storage of goods, and then made â€‹â€‹available to the customer. Obtaining the right product in the right place at the right time involves the distribution time. The choice of distribution method depends on a variety of distribution circumstances. It may be more convenient for some manufacturers to sell to wholesalers, who then sell to retailers, while others prefer to sell directly to retailers or customers.
Promotion is the business of communicating with customers. It will provide information that will help them make the decision to purchase a product or service. The pace and creativity of promotional activities are almost alien to normal business activities.
The cost associated with the promotion or advertising of products and services often represents a significant proportion of the total cost of production of an item. However, successful promotion increases sales so that advertising and other expenses are spread over higher production. Despite the increased promotional activity is often a sign of an answer to a problem such as competitive activity, it allows an organization to develop and construct a sequence of messages and can be very profitable.
Product (or service)
What you sell, and the variety and range of products you sell. This includes the quality, brand and reputation (the consumer opinion) of the product. For a service, the customer support after purchase is important. For example, travel insurance is often sold with access to a hotline in case of emergency.
13 The Product life cycle
Every product has its life cycle like a human being. It passes through different stages of its life like introduction, growth, maturity and decline etc. after its launching; this is known as product life cycle. It is another approach to examining product mix by looking at the life cycle phase of each product. As it passes through its stages, it gives effect on products sales and profit. Therefore it is very essential to the firm or marketer to know in which stage the product is, as each stage is characterized by a typical marketing behaviour. This will be made clearer with the help of following diagram.
1) Product Development Stage:
This is first stage of PLC. It begins when the company develops new product idea. The Research and Development department (R & D) develops the product concept into a physical product, hopping that it will satisfy the customer and will excite consumers. Then the product is tested under laboratory to make sure that the product performs safely and effectively. No doubt product being newly developed and given physical form, there is no sale of product and simultaneously the cost on R & D increases. In other words there is no profit or earning in this stage. So there is no marketing strategy.
2) Introduction stage:
The introduction stage begins when a new product is launched first time in the market. There is no sale or low-sale of product depends upon the nature of product. Naturally promotional expenses will be substantial in order to make the product popular among the customers. Due to heavy promotional expenses, the profit margin will be less. Therefore at time of designing policies marketers use to adopt the following strategies for introductory stage:
Always on Time
Marked to Standard
The firm will concentrate on one product only.
Adequate funds will be allocated to research and development.
The firm may adopt skimming pricing strategy or penetration pricing strategy depending upon the nature of the product.
The firm may adopt concentrated or mass distribution strategy depending on the area of market to be covered.
3) Growth stage:
It is the second stage in product life. During this stage product is known to customer and demand for the product is increased. Along with this, the cost of production and promotional expenses will fall down gradually. As a result the firms get good profit through marketing of the product. However due to market demand and profit incentive, new firms will enter in the market with modified product. Therefore at this juncture marketer decides the following strategies:
Product improvement strategy will be adopted to cover large market.
The firm may adopt penetration pricing strategy.
Aggressive sales promotion techniques will be used to improve sales.
Modified distribution channels will be accepted to cover large area etc.
4) Maturity stage:
During this stage, firm being well established in the market, sales of the firm remain more or less stagnant. The competitors are more with identical products. Its overall results are there is reduction in firm's profit. Because of intense competition, entering into new markets becomes difficult. Therefore the firm always thinks to introduce new product and new marketing mix. Along with this the firms use to study the competitors startles to compete and adjust the production and marketing activities to counteract the same. Generally marketer adopts the following strategies:
The firm may adopt production modification to improve upon the existing product.
The firm will continue penetration pricing strategy.
The firm may stress on promotion expenses and undertake more promotional work.
The firm may try to concentrate on specific market segment etc.
5) Decline stage:
This is last stage of product, in its life. Here product has law demand as rivals are coming up with new modified products in the market. Firm's sales might have declined noticeably.
This seller can change the position of the product or modify the product, or even take a decision to withdraw the product from the product mix. Special efforts are necessary at this stage, failing which the firm will have to go out of market within a short period. The marketer implements the following way to deal with the situation-
Replace existing product with an improved product.
Loss making brand will be withdrawn from the market.
There will be reduction in price of the product.
Goods may be sold to selective segment.
The firm may become economical on expenses.
14) Product Development and Branding
Diagram of product development
Product development is a creation of, innovation of, enhancing the utility of or continuous improvement of earlier characteristics of a dynamic product or developing an entirely new kind of product to satisfy the end-user's (consumer's) requirement.
Product development is a specialized activity. This is done to improve the existing product or to introduce a new product in the market. It is also done to improve the above features or techniques or systems. However, generally, this means a development of new products. New product development means introducing a new product in the market. It means adding a fresh product to the existing group of products.
Product development involves a risk of investing precious time, money (capital) and intellectual resources. Therefore, a well-planned product development is necessary. A good product development creates business opportunities (growth), the productivity of employees, and also improves the levels of customer satisfaction.
Branding is a company used trade practice by manufacturer of consumer and industrial goods. This is very old concept and very much similar to our tradition concept which is known as "naming ceremony". Branding means giving an attractive name or symbol to the product by which it will be identified in the market and remembered by traders and consumers. It gives independent status and identified to a product and it remains with the product for long period. Once the brand is used, it becomes an internal part of the product itself. Therefore branding becomes so popular and common that today hardly anything goes unbranded.
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According to the American marketing association, "Brand is a name, term, symbol or design or a mixture of them which is intended to identify the goods or services of one seller or group of sellers and to make different them those of competitors". It is also known as symbol or stamp of product.
Branding is facilitating product differentiation, so it is essential in this age of mass production and distribution of identical products. It is necessary due to increasing market competition, growing importance of packaging, advertising and publicity and need to develop brand image in the minds of consumers. In short brand is nothing but identification mark of the product with, which consumer can remember.
9) Market Segmentation, Targeting, and Positioning
"Marketing STP" is one way to characterize the contemporary strategic marketing approach.
Market refers to the creation of which two or more parties involved in the transaction of goods and services in exchange of money. Both sides now are known as sellers and buyers.
It is the responsibility of marketing to create awareness of their products among consumers. It is important that individuals be aware of the brand. Common brands must be provided to both end-users.
So marketers came up with the concept of STP.
STP is stand for:
S - Segmentation
T - Target
P - Positioning
The first step in the process is the division of product promotion.
Division of the broad market to small segments consisting of people think on the same lines and angle to show similar products and brands is called market segmentation.
Segmentation refers to the process of creating small groups (segments) in a large gathering market of consumers who have similar requirements, needs and interests.
People in this segment are responding to similar fluctuations in the market and require the same products. In simpler words, market segmentation can also be called as a group.
When a marketer creates different segments of the market, then comes up with different marketing strategies and promotional schemes according to the tastes of individuals of a given segment. This process is called targeting. When the segments are created, and then led them to the organization.
Organizations with the help of different marketing plans and schemes target their products amongst the various segments.
Targeting is the second stage and takes place once the markets were divided.
Positioning is the last step of segmentation, positioning Targeting cycle.
Once the organization decides on its target market, tries hard to create an image of your product in the minds of consumers. Marketers create the first impression of the product in the minds of consumers by positioning.
Positioning helps organizations create a perception in the minds of consumers.
7) Porter's competitive advantage
Michael Porter identified two types of competitive advantage.
Competitive advantage occurs/exists when a firm is able to provide the same benefits as competitors, but lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage).
Cost and differentiation advantages are known as "position advantage", because they describe as the industry's leader in both cost and differentiation.
Cost and benefits of diversity
Competitive advantage is created using means and capabilities to achieve either a lower cost structure or a differentiated product. A firm position in the industry by choosing a low-cost or differentiation.
Another important decision is how wide or narrow segment of the market for the purpose. Porter created a matrix using cost advantage, differentiation and focus Advantage board or narrow set of generic strategic determination that the company can lead to create and maintain competitive advantage.
2) Relation between business vision, mission and marketing strategy
A marketing strategy lays down plans for the way in which an organisation will achieve its goals by using marketing activities to generate business. The marketing strategy must, therefore, be absolutely appropriate to the organisation so that it complements its vision and mission- whether they are expressed overtly or whether they can be inferred from corporate aims and intentions which, together, express a broad direction of travel. Marketing strategy, alongside the strategic planning process, is one tool for translating the bigger picture into actions.
A mission and vision are standard and critical elements of a company's organizational strategy. Most established companies develop organizational mission statements and vision statements, which serve as foundational guides in the establishment of company objectives. The company then develops strategic and tactical plans for objectives.
Mission Statement Purpose
A mission statement clarifies an organisations purpose, and while longer than a vision statement (most are around one paragraph) it should still be unambiguous and to the point.
A company's mission statement is essentially its statement of purpose. It serves as a guide for all of the company's decision-making. Shareholders, leaders and employees are normally the aim of the mission. It must help workers within the organization know what decisions and tasks best support with the mission of the company. A mission statement offers insight into what company leader's view as the primary purpose for being in business.
Relationship to Organizational Strategy
Strategic planning is the process of developing company objectives, strategies and tactics to achieve the mission of the organization. The company generates short and long-term objectives using the mission statement. Objectives may include market-share targets, revenue or profit goals, customer satisfaction scores and improved brand awareness. Next, it develops strategies to accomplish objectives. For instance, betterÂ training and monitoring of feedback scores are strategies to achieve higher customer satisfaction. Actionable steps or tactics are then developed. Hiring an outside training consultant for a series of service training sessions is a tactic tied to the customer satisfaction goal and the training strategy.
Vision Statement Purpose
A vision statement is a short and inspiring phrase of what a businessÂ intends to become and achieve at some point in the future.
Vision statements are sometimes confused or used synonymously with mission statements. However, vision statements should offer more of a direction and include a perspective of corporate values. A vision might provide a direction for the company for the next five to 10 years, while also noting a commitment to integrity, transparency, openness and other such values. "Mind tools," indicates that a vision statement takes your mission and adds an element of human values. It should inspire employees and given them a sense of purpose.
17) Retailing and channel management
Channel management is a term that refers to the way in which a company or supplier of products uses a variety of techniques, marketing and sales strategies in order to reach the widest possible range of customers. The channels are in different units, in which the product is marketed and sold to consumers. When done correctly, channel management motivates these channels to sell the product, and ultimately develop a better relationship between the client and the product. This is achieved by setting targets for each channel, and then specific implementation of various marketing strategies to ensure that these objectives are achieved, all while staying in line with the general brand of the company.
Management channel allows a property to meet the needs of customers in each specific channel. Direct communication with customers in each channel is of utmost importance. Once this is achieved, we will have a better idea of â€‹â€‹who is best suited to the marketing strategy that the customer base, whether it concerns the promotion, advertising through all media and direct to the customer or merchandising. Even though the techniques may be different from channel to channel, the overall brand strategy must always consistently across all business sectors.
Management refers to the process of bringing people together on a common platform and work as a single component / unit in order to achieve the aims and objectives of the organization. Management is required in all aspects of life and an important part of all businesses.
Various processes that help customers get the desired goods from retail stores to its end-use retail apply. Retail Management provides all the necessary steps in order to bring customers into the store and purchase their needs.
Retail management makes shopping a pleasant experience and ensures customers leave the store with a smile. In simpler terms, retail store management helps customers without any difficulty.