The marketing mix is a term which is used to describe all the activities which go into marketing a product or service. These activities are summarized as the four P’s:
Product, applying to the good or service itself (design, features, quality). Business have to consider how the product compares to other competitors’ products, the packaging to help identify it, and if it’s a service, the service should be better than the rivals’ services.
Price, the cost at which the product is sold to the customer. A comparison must be made with the prices of competitors’ products. This should cover costs.
Place, the channels of distribution that are selected. Business should consider how the product will get into the market and to the customer that wants to use the product. The manufacturer should also consider if the product is sold to shops that sell to the public or to wholesalers or to customers directly.
Promotion, how the product is advertised. The advertising media is considered when promoting. It includes discounts that may be offered or any other types of sales promotion (e.g. money-off vouchers or free gifts)
(Remember these, as they are important to understand the activities mentioned in the marketing mix.)
A brand name is the unique name of a product that distinguishes it from other brands.
Advertising and other promotions will constantly refer to this brand name and will make consumers aware of the qualities of the product to try to persuade them to buy it.
Brand loyalty is when consumers keep buying the same brand again and again instead of choosing a competitor’s brand.
Brand image is an image or identity given to a product which gives it a personality of its own and distinguishes it from its competitors’ brands.
Packaging is the physical container or wrapping for a product. It is also used for promotion and selling appeal.
These are the main considerations of packaging:
It must be suitable for the product.
It should protect the product.
It should not allow the product to spoil.
It has to allow the product to be used easily.
It has to be suitable for transporting the product from the factory to the shops (should not be too delicate or else the product could easily get damaged).
The packaging has to appeal to the consumer, therefore the color and shape of the container is very important.
The labels on some products must, as a legal requirement, carry important information about the product (e.g. how to store it, expiry dates, ingredients that it contains).
The product life cycle describes the stages a product will pass through from its introduction, through its growth until it is mature, and then finally its decline.
Development
Product is developed.
Testing prototype.
Market research is carried out before product is launced on to market.
No sales.
Introduction
Slow sales growth initially because consumers don’t know product is on market.
Informative advertising is used until product is known.
Price skimming may be used if product is a new development and there are no competitors.
No profits made because no development costs are covered yet.
Growth
Advertising transitions to persuasive advertising to encourage brand loyalty.
Slightly reduced prices as new competitors enter market to take some customers.
Profits are made as development costs are covered.
Maturity
Sales now slowly increase.
Intense competition.
Pricing strategies are now competitive or promotional pricing.
Lots of ads to maintain sales growth.
Profits are at their highest.
Saturation
Sales are now stabilized at their highest point.
High competition but no new competitors.
Profits start to fall as sales are static.
Prices have to be reduced to stay competitive.
Decline
Sales decline as new products come along or because product loses appeal.
Product is usually withdrawn from market when sales become so low and prices have been reduced so far that it becomes unprofitable to produce product.
A branded product is likely to be sold at a high price when it is first introduced to the market. A low price could give the wrong message about quality.
Prices are likely to be relatively higher than those of competitors in the growth stage as the product may still be newer than those of rivals.
In the saturation or maturity stage, when the business will want to try to stop sales declining, the price is likely to be reduced as competitors may have launched newer versions of their own products.
Some substantial price discounts might be offered during the decline stage, especially if the business does not plan to extend its life.
Promotion
Spending on production is higher than the introduction because the business needs to inform consumers of the product. A clear identity needs to be established if the product is a completely new brand.
Advertising will be used less when the product has become well known or if the business wants to spend budget on marketing for other products.
Promotion spending might be increased again if the business decides to implement an extension strategy.
An extension strategy is a way of keeping a product at the maturity stage of the life cycle and extending the cycle.
