Business Studies - Chapter 7: Marketing Mix (4 Ps)

pricing strategies

+ market penetration pricing + leader pricing + promotional pricing + bulk discount + prestige pricing

6) PHYSICAL EVIDENCE

- factors such as the store's presentation, appearance of the staff members, or business cards, brochures, letterheads, signage - the way these are used to market the business, by relaying a message to the consumer, will depend on the type of bus

it is important that the business pays close attention to the impact of social media on the Marketing efforts (promotion strategies)

- gives power to consumers to voice their opinions about a brand - important that the business builds a presence on social media where it can interact with consumers (help gain insight into the needs, to respond to complaints, share important info) - beneficial to a business' efforts to promote its online sales - competitions can be used to entice consumers to interact (in the process, give contact details, demographic details of the customer making geo targeting easier) - messages and content shared can go viral in a matter of hours

PRODUCT - packaging

- helps to protect the product and may make it easier to stack the items on shelves - helps to identify the manufacturer by displaying the name, trademark & brand - gives the consumer valuable information on ingredients used while manufacturing - helps to target different segments of the target market

options available to the manufacturer when it comes to how many retail shops will sell the product

- intensively distributed: to as many retailers as possible (necessity goods/services usually) - selectively distributed: products such as perfumes only available at a select number of retailers - exclusively distributed: very expensive goods are only available at shops that specialise in selling those types + franchising

principles for good marketing communication strategy

- only products/services that meet standards of quality may be promote, the business may not mislead customers - in depth knowledge of products is required, incorrect info must be avoided - unique & memorable design must be central to the campaign (special advertising themes, slogans, catchy phrases/jingles) - illegal to criticise/mention competitors - expenses must be kept within the budget (+ shouldn't be seen as an expense but an investment) - correct advertising medium determined by the target market

7) PROCESS

- operating systems and procedures that must be designed & managed - the part of the service offering which the customer experiences - every employee should know what to do, when to do it and how to do it

additional three Ps associated with Service marketing

- people (rendering the service)term-9 - physical evidence (associated with the service) - processes (used while rendering the service is rendered and/or consumed)

5) PEOPLE

- people will always be a part of the selling equation - service delivery is not the same process or similar to the product - attitude, behaviour, skill, morale and motivation levels of employees play a huge role on the service - customer's perception of the quality of service may influence satisfaction/future purchases - employees are the "face of the business" so there needs to be sufficient control mechanisms (to positive rewards or negative punishment) - quality of after-sales service is vital to customer loyalty

when the business decides on the price, the following should be considered:

- will the consumer be prepared to pay the price charged? "snob attitude" may influence the consumer to reconsider when the price is too low (=quality not good) - how does the price charged compare with similar products offered by competitors? - how sensitive are consumers to a change in price? demand for necessities will not decrease with a price increase but luxury products/services will be the opposite - the availability, quality & price of substitute goods? if there is none available, it makes easier to increase prices

four elements to the marketing communication mix (promotion)

A. Advertising B. Personal selling C. Sales promotion D. Publicity

Marketing mix - 4Ps

Product policy, Price policy, Place (distribution) and Promotion policy

prestige pricing or premium pricing

a pricing strategy used by luxury goods marketers in which they keep the price artificially high to maintain a favorable image of the product (consumer snob association with a product - expectation of paying more)

a service

any action offered by one party to another (although it is essentially intangible) it may be linked to a physical product

convenience goods

inexpensive products that are purchased regularly and require little time and effort for purchase decisions. - customers are not brand-loyal - want to make the purchase as speedily and easily as possible

services

intangible - can be an individual service that is being sold (ex: doctor) - could form part of the overall product (ex: delivery service)

4) PROMOTION

known as marketing communication strategy

decline or withdrawal (life cycle) stage

no one acquires the product anymore as it has gone out of style/trend and there is no marketing/advertising for the product anymore

bulk discount

offered to a consumer that buys large quantities of a certain product (lower cost per unit)

speciality goods

often high priced and consumers will put a lot of research into the product before purchase. - consumer needs to be certain before making this once-in-a-lifetime purchase - more conscious of a specific brand (keep in mind building of brand and marketing campaigns)

select goods

only purchased after the consumer has considered the price, quality and brand names vs the competitor

market penetration pricing

setting a low price for a new product in order to attract a large number of buyers (new consumers) and a large market share - initially may not make a profit - price will be increased as soon as familiarity/loyalty is attained

leader pricing

setting some very low prices - real bargains - to get customers into retail stores

introduction (life cycle) stage

start-up phase, with only early adopters having the product and with few consumers having acquired owing to high costs

promotional pricing

temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales (ie: discounts offered for a special event)

2) PRICE - aspects

the monetary value of a product/service that a consumer is prepared to pay (opportunity cost) - retailer has to set a certain price to remain competitive in the market

to ensure the consumer buys the product

the product has to be distributed to a venue (outlet/shop) that is conveniently situated - there, factors such as availability of parking/public transport, location of the store, displays in windows are important to attract customers

PRODUCT - life cycle

the stages through which goods and services move from the time they are introduced on the market until they are taken off the market - introduction - growth - maturity - decline/withdrawal

1) PRODUCT - aspects

what *type* of product/service is being sold? - convenience goods - select goods - speciality goods - services

hybrid-service offering

where the service and a physical product are combined

3) PLACE (distribution) - options

~ manufacturer can sell the product directly to the consumer ~ manufacturer - retailer - consumer ~ manufacturer - wholesaler - retailer (to break the bulk) - consumer ~ possible to use intermediaries or agents