MARKETING MIX

What is Marketing?
Marketing is an organizational function
and a set of processes for creating,
communicating, and delivering value
to customers and for managing
customer relationships in ways that
benefit the organization and its
stakeholders.

Marketing Mix
4 Ps :
Product
Price
Promotion
Place

PRODUCT

Product
A product is anything that can be offered to a
market to satisfy a want or need, including
physical goods, services, experiences, events,
persons, places, properties, organizations,
information, and ideas.

Five Product Levels

Product Differentiation

Product form
Features
Customization
Performance
Conformance

Durability
Reliability
Repairability
Style

Design
Design is the totality of features that affect
how a product looks, feels, and functions to a
consumer.
Design offers functional and aesthetic benefits
and appeals to both our rational and
emotional sides.

Product Line
The product line is a group of products within
a product class that are closely related
because they perform a similar function, are
sold to the same customer groups, are
marketed through the same outlets or
channels, or fall within given price ranges.

Line Stretching
Down-Market Stretch

Up-Market Stretch

Two-Way Stretch

Product Mix
A product mix consists of various product
lines.
Eg : NECs (Japan) product mix consists of
communication products and computer
products. Michelin has three product lines:
tires, maps, and restaurant- rating services.

Branding
Branding is a personality of the product.
It is a name, term, sign, symbol, design, or a
combination of these items to indicate
identity of products and services and to
differentiate one manufacturers from the
others.

Packaging
All the activities of designing and producing the
container for a product.
Packaging objectives :
Identify the brand
Convey descriptive and persuasive information
Facilitate product transportation and
protection
Assist at-home storage
Aid product consumption

Labelling
A label performs several functions.
a) It identifies the product or brandfor
instance, the name Sunkist stamped on
oranges.
b) It might also grade the product; canned
peaches are grade-labeled A, B, and C.
c) The label might describe the product: who
made it, where and when, what it contains,
how it is to be used, and how to use it safely.
d) The label might promote the product through
attractive graphics.

PRICING

Synonyms for Price

Rent
Tuition
Fee
Fare
Rate
Toll
Premium
Honorarium

Special assessment
Bribe
Dues
Salary
Commission
Wage
Tax

Steps in Setting Price

1.
2.
3.
4.
5.
6.

Select the price objective

Determine demand
Estimate costs
Analyze competitor price mix
Select pricing method
Select final price

Step 2: Determining Demand

Price sensitivity
Estimate demand curves
Price elasticity of demand

Step 5: Selecting a Pricing Method

Markup pricing
Target-return pricing
Perceived-value pricing
Value pricing
Going-rate pricing
Auction-type pricing

 Pricing strategies

Geographical Pricing
The company decides how to price its
products to different customers in different
locations and countries.
Should the company charge higher prices to
distant customers to cover the higher shipping
costs, or a lower price to win additional
business?
How should it account for exchange rates and
the strength of different currencies?

Price Discounts and Allowances

Discount
Quantity discount
Functional discount
Seasonal discount
Allowance (eg : Trade-in allowances )

Promotional Pricing Tactics

Loss-leader pricing
Special-event pricing
Cash rebates
Low-interest financing
Longer payment terms
Warranties and service contracts
Psychological discounting

Differentiated Pricing

Customer-segment pricing
Product-form pricing
Image pricing
Channel pricing
Location pricing
Time pricing
Yield pricing

MARKETING
CHANNEL

What is a Marketing Channel?

A marketing channel system is the
particular set of interdependent
organizations involved in the
process of making a product or
service available for use or
consumption

Channels and
Marketing Decisions
A push strategy uses the manufacturers sales
force, trade promotion money, and other
means to induce intermediaries to carry,
promote, and sell the product to end users
A pull strategy uses advertising, promotion,
and other forms of communication to
persuade consumers to demand the product
from intermediaries

Consumer Markets

Industrial Markets

Channel Member Functions

Gather information
Develop and disseminate persuasive
communications
Reach agreements on price and terms
Acquire funds to finance inventories
Assume risks
Provide for storage
Provide for buyers payment of their bills
Oversee actual transfer of ownership

Designing a
Marketing Channel System
Analyze customer needs
Establish channel objectives &
constraints
Identify major channel alternatives
Evaluate major channel alternatives

Identifying Channel Alternatives

Types of intermediaries
Number of intermediaries
Terms and responsibilities

Number of Intermediaries
Exclusive - the producer wants to maintain
control over the service level and outputs
offered by the resellers, and it often includes
exclusive dealing arrangements.
Selective - relies on only some of the
intermediaries willing to carry a particular
product.
Intensive - Intensive distribution places the
goods or services in as many outlets as
possible.

Terms and Responsibilities

of Channel Members

Price policy
Condition of sale
Distributors territorial rights
Mutual services and responsibilities

Channel Conflict
Channel conflict is generated when one
channel members actions prevent another
channel from achieving its goal.
Horizontal channel conflict occurs between
channel members at the same level.
Vertical channel conflict occurs between
different levels of the channel.

Channel Conflict
Multichannel conflict exists when the
manufacturer has established two or more
channels that sell to the same market. Its
likely to be especially intense when the
members of one channel get a lower price
(based on larger-volume purchases) or
work with a lower margin.

Causes of Channel Conflict

Goal incompatibility
Unclear roles and rights
Differences in perception
Intermediaries dependence on
manufacturer

MARKETING
COMMUNICATION

Marketing Communications
Marketing communications are the means by
which firms attempt to inform, persuade, and
remind consumersdirectly or indirectly
about the products and brands they sell.
In a sense, marketing communications
represent the voice of the company and its
brands; they are a means by which the firm
can establish a dialogue and build
relationships with consumers.

Modes of Marketing Communications

Mass
Communication
Advertising
Sales promotion
Events and
experiences
Public relations and
publicity

Personal
Communication
Direct marketing
Interactive
marketing
Word-of-mouth
marketing
Personal selling

Elements in the Communications

Process

Micromodels of Communications

INTRODUCING
NEW MARKET
OFFERINGS

Categories of New Products

New to the World
Additions
Improvements

Repositionings
Cost reductions

New-Product Development
Decision Process

TAPPING INTO
GLOBAL
MARKETS

What is a Global Firm

A global firm is one that operates in more
than one country and captures R&D,
production, logistical, marketing, and financial
advantages in its costs and reputation that are
not available to purely domestic competitors.

Four Stages of Internationalization

Stage 1: No regular export activities

Stage 2: Export via independent agents
Stage 3: Establish sales subsidiaries
Stage 4: Establish production facilities
abroad

Five Modes of Entry into Foreign

Markets
Indirect exporting - work through independent
intermediaries. Domestic-based export
merchants buy the manufacturers products
and then sell them abroad.
Direct exporting - Companies may eventually
decide to handle their own exports.

Five Modes of Entry into Foreign

Markets
Licensing - licensor issues a license to a
foreign company to use a manufacturing
process, trademark, patent, trade secret, or
other item of value for a fee or royalty.
Joint ventures - foreign investors have often
joined local investors in a joint venture
company in which they share ownership and
control
Direct investment