DEVELOPING THE MARKETING MIX

my free school tannzania December 30, 2014

 TOPIC: DEVELOPING THE MARKETING MIX
Meaning of the term marketing mix
The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market.

Products must be designed, priced, distributed, communicated and sold, the staff must be chosen, trained and rewarded, the physical surroundings must be looked after and the processes must be planned and implemented . This means mixing the 8 Ps as an approach to marketing. These 8 Ps incorporate approach for both the product and services.
The first 4 Ps for the product are: Product, Price, Place (distribution), and Promotion. The other 4 Ps for service are: Process, Physical evidence, People (trained staff) and Proactive customer service.

Price: refers to the value that is put for a product. It depends on costs of production, segment targeted, ability of the market to pay, supply - demand and a host of other direct and indirect factors. There can be several types of pricing strategies, each tied in with an overall business plan. Pricing can also be used a demarcation, to differentiate and enhance the image of a product.

Product: refers to the item actually being sold. The product must deliver a minimum level of performance; otherwise even the best work on the other elements of the marketing mix will not do any good.

Place: refers to the point of sale. In every industry, catching the eye of the consumer and making it easy for her to buy it is the main aim of a good distribution or 'place' strategy. Retailers pay a premium for the right location. In fact, the mantra of a successful retail business is 'location, location, location'.

Promotion: this refers to all the activities undertaken to make the product or service known to the user and trade. This can include advertising, word of mouth, press reports, incentives, commissions and awards to the trade. It can also include consumer schemes, direct marketing, contests and prizes.

Importance of marketing mix
All the elements of the marketing mix influence each other. They make up the business plan for a company and handled right, can give it great success. But handled wrong and the business could take years to recover. The marketing mix needs a lot of understanding, market research and consultation with several people, from users to trade to manufacturing and several others.

Element of marketing mix
                                          PRODUCT
Is a critical element of the marketing and business strategy. WHY? Because it through sale of product (good and/or service) that a company can survive and grow
There several definitions of the product .
Definition 1: A product is anything that can be offered to the market that can satisfy a need or want
 - Products can be service such as those provided by a dentist, lawyer, teacher, courier service or a bank

Definition 2: Product is a bundle of physical, service, and symbolic attributes designed to enhance buyers’ want satisfaction. The term product applies to both  goods and services

What are Goods and Services?
- Service:  intangible act or task that satisfies consumer or business user needs
- Good: tangible thing that satisfies customer’s needs

PRODUCT LIFE CYCLE
Product Lifecycle (PLC) refers to the life of a product from the first stage of its development, the rise and fall of the sales during the lifetime, and the final decline.
- The PLC is tool used by marketing managers to assist in developing strategies as the product moves through its lifecycle
- When a company develops a new product, they hope it will have a long life. Often, many consumer products such as food, household goods and electronic items have a moderately long life cycle
- However, some products come and go quickly. You often hear people saying, “This is the latest style, “This product is going to be out of fashion or “This is a fad”

Stages in product lifecycle
1. Product development stage – R&D phase
2. Introduction stage – when the product is introduced in the market
3. Growth stage – period of rapid growth in stage
4. Maturity stage – sales level off
5. Decline stage – when sales fall & profit drop

PRICE MIX
What is price? Price is that amount of money a buyer pays for a good  or service. It the value the seller places on a good or service

Objectives of pricing
(i) survival
(ii) profit maximization
(iii) revenue maximization
                         
Pricing Strategies
(i) Skimming pricing strategy:  involves the use of a high price relative to competitive offerings
- Often used by marketers of high-end products
- Also by firms introducing a distinctive good with little or no competition
- Allows firms to control demand during the introductory stages of a products life cycle
- Can be used as a tool for segmenting a product’s market on a price basis
(ii) Penetration pricing strategy:  involves the use of a relatively low entry price as compared with competitive offerings; based on the theory that this initial low price will help secure market acceptance.
(iii) Competitive Pricing Strategy:  reduces emphasis on price as a competitive variable by pricing goods at the general level of competitors
- Firms focus their own marketing efforts on the product, distribution and promotion elements of the marketing mix
(iii) Target Pricing: Involves setting price to ‘target’ a specified profit level
- Estimates of the cost and potential revenue at different prices, and thus the break-even have to be made, to determine the mark-up
(iv) Time pricing: Price based on the time of the day a product is available and is based on demand and supply
- In Tanzania, telephone calls made late at night cost less than other times
- In Dubai, telephone calls made on Friday (Ijumaa) are less than any other day
- In UK, telephone calls made after 6.00pm is cheaper
- In Uganda, MTN to MTN telephone calls after 11.00pm can be as low as 90% discount
(v) Everyday low pricing (EDLP):  Pricing strategy of continuously offering low prices rather than relying on such short term price cuts as cents-off coupons, rebates, and special sales
(vi) Destroyer/Predatory Pricing: Deliberate price cutting or offer of ‘free gifts/products’ to force rivals (normally smaller and weaker) out of business or prevent new entrants
- Anti-competitive and illegal if it can be proved

Which Price is best?
There is nothing like the best price. It depends on many internal and external variables  (factors) such as
(i) Demand and supply forces in the market
(ii)                                      Competition
(iii)                                    Stage of product in the PLC
(iv)                                    Company policy
(v)                                      Nature of the product such as perishability, and distinctiveness
(vi)                                    Purchasing power of customers
(vii)                                 Government regulations
(viii)                               Others
 PLACE MIX:
Distribution channels
What is distribution? Distribution is an organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption to a consumer or business user.
Distribution Channels
A distribution channel is a set of independent organizations involved in the process of making a product or service available to the consumer or business user.
- A distribution channel is used to move the customer towards the product or move the product close to customer.

Roles of marketing channel in marketing strategy
(i) Links producers to buyers.
(ii) Performs sales, advertising and promotion.
(iii) Influences the firm's pricing strategy.
(iv) Affects product strategy through branding, policies, willingness to stock and customizes profits, install, maintain, offer credit, etc.
Types of Distribution (marketing) Channels
      Direct Marketing Channel
check diagram on the board
      Indirect Marketing Channel
check diagram on the board

What is a marketing channel?
A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of product to the point of  consumption and, as such, it consists of all the institutions and all the marketing activities in the marketing process.
- A marketing channel is a useful tool for marketing management.

Promoting mix:  Promotion can be defined as all personal and impersonal efforts by a seller or the seller’s representative (whose task is) to inform, persuade, or remind a target audience, build  image and  more
INTEGRATED MARKETING COMMUNICATION (IMC)
Normally it is not effective to use one promotional tool to achieve all or some of the organisation’s strategic goals of communication.
So, the organisation has to combine and use several promotional tools together either one after the other or concurrently or alternately. When this is done it is called integrated marketing communications

IMC is the development of an Integrated  Comprehensive Marketing Communication (Promotion) Plan that links the marketing function with the communication function to deliver Effective Marketing Messages capable of (1) informing, (2) convincing and (3) persuading people to buy.

IMC makes use of such promotion elements as  (1) Advertising, (2) Sales Promotion, (3) Public Relations, (4) Publicity, (5) Direct Marketing, (6) Networking, (7) Personal Selling, and other non-conventional elements like (8) On-line communications to develop and deliver clear, consistent, and impact-full communications capable of informing, convincing, and persuading customers to buy.