Marketing Mix NCFE business

The marketing mix consists of the 4P's

This stands for:

• Price
• Product
• Promotion
• Place

They are controllable variables which meed to be carefully managed and meet the needs of a defined target market all elements link and support eachother.

Price takes into account the following factors

• Cost of production
• Profit margin
• Consumer willingnes to pay
• Competition

Factors that affect price are

• Demand - how desired is the product?
• Competition - are you charging the best profitable prices?
• Prdocut life cycle -  is the prdouct in decline or growth?
• Rest of the mix - does it interlink with the other elements?

There are many price strategies to sell your product

Skimming pricing

this sets the product at a high price initially aiming it a smaller segment it then lowers the price to make the product avaliable to a wider market segment the objective is to skim as much profit as possible from each later advantages are: higher return on investment, it helps create an image brand because it is a "must have" disadvantages are it is not good in a crowded market because it attracts competitors

Cost plus

This takes into account the costs of production and a profit percentage the company wants to make however it doesnt take into account consumer demand or competitive pricing and a company could over estimate the price of a product, an advantage is it is simple and easier to evaluate an increase in expenses to be corrected immediately   

Competition pricing

This includes taking into account the price of competitors products and matching them or lowering them however it may not be a profitable strategy

Penetration Pricing

This includes keep prices low whilst a company captures the different market segments then increasing the price when the whole segment is captured allowing a maxmised profit and a "must have product"

Product Line Pricing

This includes pricing different products within the same range at different prices for example DVDs

 It is important to conduct a comprehensive market survey to investigate competiton the market and potential customers when creating a product to help create a unique selling point for your product to make you stand out from competitors.

When designing a product you must ask 

•  What are you selling?
• What makes it unique
• What secondary products can also be sold (warranty, services)

The product will affect the mix for example a high quality car will require a high price which is based in a consumer orientated area with good promotion in order to make a profit.

Place refers to the distribution channel of a product, if the product is consumer orientated it needs to be in an accessible place with travel links.

If a product is a premium product it should be sold in selected stores with consumers who are willing to pay.

 A firm requires to have a full proof logistics and supply chain for distribution.

Promotions includes communicating with potential customers or a target market about your product and persauding them they want it through concepts such as billboards, leaflets, advertisements.

To help promote a product a business may use AIDA this stands for

• Attention
• Interest
• Desire
• Action

It helps communicate with a group of potential customers by persauding them to buy your product and increase a profit.

If you do not promote your product nobody will know about it and you make run the risk of not making a profit.