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THE MARKETING MIX
When marketing their products and services,
firms need to create a successful mix of:
 PRODUCT
 PRICE
 PROMOTION
 PLACE
The 4 P’s of marketing
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PRODUCT
The Product is the actual item that a
consumer purchases, including the
packaging, image, guarantee and
after-sales service
Learn this definition!
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THE PRODUCT LIFE CYCLE
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New product
Sales low
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G
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Sales grow
rapidly as
product
becomes well
known
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INJECTING NEW LIFE
Time
Product fully established
Sales even out
Competitors enter market
Popularity
declines and
sales fall
New marketing strategies are
introduced to reverse decline
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Extension Strategies
 A business wishing to extend the life of a
product which has reached maturity or is in
decline can alter one or more of the
marketing mix by changing
 PRODUCT eg alter the packaging, introduce a new
version
 PRICE eg reducing the price to interest customers
 PROMOTION eg introduce a new advertising
campaign
 PLACE eg change where it can be bought, eg online
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EXTENSION STRATEGIES
 One company launched a new drink 7 times
before it was successful. Can you guess what
•Answer: 7 UP
they called it?
 Malteesers
 Introduction of new variety, eg white chocolate
 New advertising campaign for new variety
 Guidance
 Changed name to Pastoral Support
 PS teachers spend more time on guidance and less on teaching
 Marathon
 Changed name to snickers
 Sponsors of sporting event
 Banks
 Services now available via internet or telephone
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Cadburys Flake
Extention Strategies
•The Cadbury Flake bar was originally launched in 1920
•In 1930 the Flake 99 ice cream accompaniment was
introduced
•2001 the Snowflake (a crumbly white chocolate Flake centre
covered in milk chocolate) was launched.
•In 2003 the Cadbury Flake Dipped was introduced where
consumers can enjoy all the benefits of the Flake withouth
the mess - ideal for on the go.
•In September 2004 Cadbury Flake Moments were launched,
a selection of miniature milk chocolate and white chocolate
Flake pieces, which extended the Flake brand into the giving
market - creating the ideal gift.
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QUESTIONS
FOR YOUR JOTTER
1.
Compare the product life cycles of (a) a new ipod shuffle and
(b) Kellogg’s cornflakes. You may use diagrams to illustrate
your comparison.
2.
Chanel No5 is an expensive perfume which has been around for
many years. It’s sold exclusively in only certain stores and its
target market is women over 35. The company feels it is losing
ground to newer perfumes and wants to extend the life of the
product. Suggest as to how they might achieve this.
3.
Name 3 other products or services which have altered some
element of their marketing mix recently and describe how they
have done this.
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BRANDING
 A product with a ‘personality’
 Instantly recognisable by logo,
packaging, taste, advertising and other
features
 Believed to be a guarantee of quality
 Some brands have ‘snob value’
 Usually cost more
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BRAND LOYALTY
 Some customers are loyal to a particular
brand. They will buy the brand again
and again and also other associated
products
 Fairy washing-up liquid
 Fairy washing powder
 Fairy dishwasher powder
 The product is often sold in places that
reinforce the brand image, eg sports
drinks in leisure centres
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OWN LABELS
What about
premium own
brands? em
 Retailer’s own brands eg Sainsbury’s
Savers, George at ASDA
 Not manufactured by retailer
 Sold only in retailer’s stores
 Less expensive than branded goods
 Need little advertising
 Seen as inferior quality
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Which brands do you associate with the
following products?
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Toilet paper
Fish fingers
Chocolate
Soft drink
Gravy
Toothpaste
Washing up liquid
Brown sauce
Crisps
Cat food
Disposable nappies
Digestive biscuits
Ice cream
Soap powder
Teabags
Coffee
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Andrex
Birds Eye
Cadburys
Coca-cola
Bisto
Colgate
Fairy liquid
HP
Walkers
Whiskas
Pampers
McVities
Walls
Persil
PG Tips
Nescafe
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QUESTIONS
1.
FOR YOUR JOTTER
From a marketing point of view, describe the
differences between Heinz baked beans and
Safeway own label baked beans under the
following headings
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Product
Price
Place
Promotion
2. Heinz produce many products other than baked
beans. Describe the advantages of producing
several products under the same brand name?
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PRICE
The amount consumers are prepared
to pay for a product or service
Learn this definition!
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What is the best price for a
product?
 Charging the right price is a very
important part of the marketing mix.
 How much you charge will depend on
 How much it cost you to make your product
 How much your competitors are charging
 Whether you are trying to introduce a new
product
 The image you want for your product
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THE PRICING DECISION
 A low price will attract sales. This
makes it possible to sell large
quantities at a low average cost
 An average price will mean you need
to compete with your rivals by a
means other than price, eg by having
a better quality product or better
promotion or advertising
 A high price can be charge if your
product is seen a being better than
your rivals
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For each of the following products, try to explain whether the
manufacturer/retailer is going for a low price, an average price or a
high price
(HIGH – prestige product, expensive packaging)
Chanel No 5
(LOW – lower quality, cheaper packaging)
Morgan Sweet
(AVERAGE – in competition with similar brands)
Love
CK One
Porsche Boxster (HIGH – prestige product, sporty image)
(LOW – smaller car, lower spec)
Nissan Micra
(AVERAGE – in competition with other models)
Ford Mondeo
Supermarket own brand
Heinz beans
Safeway savers beans
(AVERAGE – competitively price alternative)
(HIGH – market leader, quality product)
(LOW– lower quality, cheaper price to attract
customers)
Jeans from market stall (LOW– lower quality cheaper price to attract
Levi 501
customers)
Jeanster jeans
(HIGH – market leader, quality product)
(AVERAGE – competitively price alternative to
branded goods)
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PRICING TECHNIQUES
 Time-based - suitable for repairing a washing machine
where the price is dependent on how long the job takes
 Cost plus - calculate how much it costs to make a product
then add on profit
 Start-up or penetration pricing - a firm bringing out a
new product or trying to break into a market might
charge a low price at first in order to interest
consumers. (penetration)
 Off the top or price skimming– a prestige product or a
new highly sought after product can often be sold at a
high price because consumer want to be associated with
the product
 Destroyer – selling a product at a very low price in order
to destroy a competitor. Once the rival firm has been
forced out of business the price of the product will be
increased
 Market Orientated – Selling a product at a price in line
with competitors. This is typical where there are many
competitors.
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QUESTIONS
FOR YOUR JOTTER
Describe a suitable pricing technique for each of the
following situations? Justify your answers.
 A new state-of-the-art video mobile phone just
on the market
 A self-employed gardener wanting to quote
customers for general gardening jobs
 A newspaper in fierce competition with a rival
paper
 Cadbury’s introducing a new chocolate bar
 A business makes and sells fresh sandwiches to
office workers
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PLACE
This is the route that products
take to reach the consumer
from the manufacturer
Learn this definition!
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The Market Place
No matter how good the product is – it
has to be in the right place at the right time.
buyers and sellers come together in the following ways
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Shop
Cash and Carry
Market stall
TV – shopping channel
Internet
Newspaper and Magazines
Mail order
Direct mail
Factory shop
These are
referred to as
Direct
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CHANNELS OF DISTRIBUTION
MANUFACTURER
MANUFACTURER
MANUFACTURER
WHOLESALER
CONSUMER
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RETAILER
RETAILER
CONSUMER
CONSUMER
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The channel of distribution chosen
will depend on:
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The product being sold
The finance available
The reliability of companies in the chain
The desired image of the product
Legal restrictions
The products life cycle
The manufacturer’s distribution capability
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QUESTIONS
FOR YOUR JOTTER
1.
Wheels Ltd manufacture bicycles. They sell to customers
via wholesalers and retailers. They are considering opening
a factory shop to sell directly to customers. Outline the
advantages of this plan to Wheels Ltd and to their
customers? (4)
2.
Advances in technology have opened up new channels of
distribution. Describe one of these new channels and
illustrate your answer with an appropriate example.
1.
There are legal restrictions on the way in which some
products are distributed to consumers. Give examples of
such products and describe why these restrictions are
enforced.
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Extension
 Log on to
http://puzzlemaker.discoveryeducati
on.com/
 Create a word search on marketing
using terms we have covered so far.
 Include at least 12 terms
 Swap with someone and complete
their word search.
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PROMOTION
Promotion is the way in which a
consumer is made aware of a
product or service and is persuaded
to purchase it
Learn this definition!
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PROMOTION
 The aims of promotion are to
 PERSUADE consumer to buy the product
 INFORM consumers about the product
 REMIND consumer that the product still
exists
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ADVERTISING MEDIA
Television
Newspapers – National, Sunday, local
Magazines
Radio
Cinema
Outdoor media – billboards, sports
hoardings, bus shelters
 Internet
 Direct mail
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Above the Line Promotion
This targets everyone – even those not
interested in the product.
 TV
 Radio
 Newspapers
 magazines
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Below the Line Promotion
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The business has direct control.
Direct mail (post or e-mail)
Personal selling
Trade fairs
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Quick Task…….
 State whether each of the media below is
Above or Below the Line.
 Suggest advantages and disadvantages for
each of the following Advertising Media.:
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Television
Daily Newspapers
Radio
Cinema
Billboards
Internet pop ups
Direct Mail
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Quick Task 2………
 Suggest a suitable advertising media
for Nike’s new trainers.
 Justify your answer.
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 PRODUCT ENDORSEMENT
 Famous sport or showbiz
personalities are paid to wear and
use a particular product, eg
Adidas, Gillette and David
Beckham
• PRODUCT PLACEMENT
–Paying for product to be used
in films and TV programmes, eg
James Bond driving a BMW in
Goldeneye
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Quick Task 3………….
 Explain possible advantages and
disadvantaged of celebrity
endorsement for an organisation.
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The choice of advertising media depends
on:
 The product
 The audience to be targeted
 The type of coverage, eg national or
local
 The amount you want to spend
 The advertising used by competitors
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SALES PROMOTIONS
 Short term inducements used to
encourage sales
 There are 2 groups of sales
promotion:
 Into the pipeline
 Out of the pipeline
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INTO THE PIPELINE
 These are offered by manufacturer to
retailers (dealers) to encourage them to
stock their products:
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Point of sale displays
Sale or return
Dealer competitions
Staff training
Credit facilities
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OUT OF THE PIPELINE
 These are offered by the retailer to the
consumer to encourage purchases to be made:
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Free samples
Credit facilities
Demonstrations
Competitions
BOGOFs
Promotional prices
Free offers
Coupons/vouchers
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Buy One Get
One Free
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QUESTIONS
FOR YOUR JOTTER
1. Describe the difference between product
endorsement and product placement. Give
examples to illustrate your answer.
2. Compare the following advertising media –
television, newspapers and direct mail. Your
answer should refer to cost, coverage, market
segment, legal restrictions, and competition.
3. Describe 2 forms of each of the following
types of sales promotion
 Into the pipeline
 Out of the pipeline
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Activity…….
 Design a poster explaining all you
know about the Marketing including
the Marketing Mix (The 4p’s)
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