Business Notes Chapters 28-34

Marketing Mix

The Marketing Mix covers the way a business use product, price, promotion and place to market and sell its product. Also known as the 4Ps'.

Definition: The integration of product, place, promotion and pricing designed to achieve the marketing objectives of the business.

An effective mix....

-          achieves marketing objectives

-          meets customers' needs

-          is balanced and consistent

-          creates a competitive advantage

-          matches corporate resources

Price: How much the customer is expected to pay for the product.

Product: Refers to the features and functions of the product or service being offered.

Promotion: Communication with the consumers.

Place: Where the purchase can be made by the consumer.

Product

Product needs to exist for other elements of the mix to happen.

Key terms:

-          Product development: The process of improving an existing product line to meet the needs of the market.

-          Product line: A set of related goods and services

-          Product mix: The full range of products offered by a business, also known as product portfolio.

Product development is very important to small and growing businesses because it comes from identifying the needs of customers who should always be the focus of an organisation. It would be dangerous for any business to assume that a successful product will still be successful in a year's time.

The product development process:

-          Ideas stage: Market researchers look for a gap in the market and figure out how a new product can best meet customer needs.

-          Screening stage: The business analyses the idea for the new product to see if its easy to market, and to see if it'll make profit. It also finds out what consumers think of the potential new product.

-          Product development stage: The prototype (model) is turned into a saleable product.

-          Value analysis: The business tries to make the product good value for money by looking at the cost of making, warehousing and distributing the product to make sure the whole process is efficient and give value for money - for both the business and the consumer.

-          Testing: Just before launch, the product may be tested. A small batch of pilot products are made, and market research investigates customer reactions.

Product development can create a unique selling point (USP).

USP: a special quality of a product which makes it different from other goods.

Product differentiation: the process of ensuring that a product has some unique features that distinguish it from competing ones.

Brands: Consistent and well-recognised.

 Benefits:

·         Inspires customers’ loyalty leading to repeat sales.

·         Can charge higher prices, especially if the brand is a market leader.

·         Retailers or service sellers would want to stock your brand in their shops.

Product portfolio analysis: Analysing the existing product mix to help develop a balanced range of goods and services.

…