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Marketing Mix of The WORKS Gourmet Burger Bistro - Definition & Explanation
Marketing Mix of The WORKS Gourmet Burger Bistro - Definition & Explanation
Neil Borden of Harvard Business School first used the term “Marketing Mix” to explain
the set of activities that a firm uses to execute its marketing strategies. According to Neil
Border, organizations blend the various elements of marketing mix into a marketing
strategy that helps the organization to compete and developed a differentiated
positioning in the market place.
1 - Branding,
2 - Physical Handling - Logistics,
3 - Packaging,
4 - Channels of Distribution,
5 - Marketing Research – Fact Finding and Analysis,
6 - Pricing,
7 - Advertising ,
8 - Servicing,
9 - Personal Selling,
10 - Promotions,
11 - Merchandising – Product Planning ,
12 - Display
Jerome McCarthy consolidated the 12 elements of marketing mix and other critical
component into a simplified framework – 4Ps of Marketing Mix.
1. Product – The products Burger Miller is making or are in the pipeline to capture
potential markets.
2. Price – Pricing strategy that Burger Miller is pursuing in various customer segments it
is operating in.
3. Place (Channels of Distribution ) – Distribution mix of Burger Miller has taken a new
dimension with the emergence of Online Retailing & domination of players such as
Amazon.
Design and Testing – Product is designed based on the value proposition that
customers are seeking and one that Burger Miller can deliver. The key consideration
regarding product design and testing are – customer value proposition, regulatory
requirements, Burger Miller skills and resources, opportunities for differentiated
positioning, and profitability.
Product Life Cycle Management of Burger Miller products – Once the product is
launched the company needs to manage the life cycle of the product through its various
stages such as – introduction, growth phase, cash cow stage, and finally decline stage.
There are three major product line planning decisions that Burger Miller can take –
Product Line Breadth decision, Product Line Length decision, and Product Line
Depth decisions. Some of the considerations that marketing managers at
companyname need to take while making product line decisions are –
1. Does the product launch or product extension launch satisfy potential customer
needs and wants in a way that can deliver profits to the firm.
2. Will the product will be viewed completely different from the existing products of the
firm and how much is the risk of cannibalization of the present brands by a new brand.
3. How the new product brand launch will impact the overall brand equity of the Burger
Miller present brands and products. For example often launching a no frill product may
end up impacting the image of the company as an innovator in the field. This is one of
the reason why Apple stopped selling its plastic phones as it negatively impacted the
image of the company as a deliverer of superior hardware products.
As the position of Burger Miller in its industry well established it can expand to the
adjacent segments where the customers are using complimentary products from other
brands to get the maximum value out of the products.
The decision regarding product line has to be balanced between complexity of the
present products and service required, and available niche space available in the market
place. From my perspective at present Burger Miller should stick with the present
merchandise mix rather than launching new products to expand the product line.
These are decisions regarding how many different Stock Keeping Units (SKU) of a given
product. For example Apple has its iPhone in various colors even though the hardware
and software is the same.
1. Burger Miller can introduce a new brand in the existing product line or it can strive to
establish a whole new product line.
2. Burger Miller can think of ways - how features and value can be added to existing
brands that help them in consolidating and increasing their market position.
3. Burger Miller can try to reposition the products from the existing brands within one
line.
4. Burger Miller can stop selling the products that are either not profitable or not
creating enough differentiation from the existing products.
Under cost based pricing strategy – Burger Miller can work out what it takes to produce
the product and put a markup based on profit it wants earn. In a highly competitive
strategy with dynamic pricing the strategy may not be feasible. For example Uber
running losses in billions can provide lower prices and sustain compare to individual taxi
service provider who is not backed by private equity and long term strategy.
Value Base Pricing
Value Base Pricing is a pricing strategy which is based on customer perception of value.
It inculcates put the number on both tangible and intangible benefits with a clear
understanding of elasticity of demand and competitive pressures.
Burger Miller can employ this pricing strategy where it launch a new product either at
loss or at very low margin to get a foothold in the segment.
For certain well established brands, Burger Miller can increase the prices as customers
can pay higher price.
Offering right mix of product features, quality, and service combination at fair price. For
example offering a limited frill option - customers can have initial product experience at
an accessible price. GoPro use this strategy extensively.
The pricing strategy is based on the competition in the market. Under this strategy
Burger Miller focus is to match the prices of the competitors and focus on reducing the
cost of operations to increase profitability.
Pricing Recommendation
Based on the evidences at hand – we can choose the following pricing strategy
High Brand Awareness – The brand of Burger Miller is well respected in the market so it
can fetch a slight premium over the other competitive brands.
1. Channel Design
Direct Distribution System – Burger Miller putting its own direct distribution channel and
reach directly to the customers. It can be through opening its own stores or just selling
all the products online.
Hybrid Distribution System – Burger Miller should implement a hybrid model where the
critical aspect of distribution system are managed by Burger Miller, and secondary
functions such as logistics, warehousing, store management etc are delegated to various
channel partners.
2. Channel Management
Channel management is about managing various power centers within the delivery
system and managing them based on bargaining power of each player in the value
chain. The channel management from marketing perspective can be done considering
three critical aspects –
Per Unit Cost of Stocking – If the cost is high then Burger Miller needs channel partners
which can pool in resources. Otherwise Burger Miller can do the operations on its own.
Customer Willingness to Search & Travel to Purchase Good – If the customer willingness
is high then company has a strong brand awareness and brand loyalty. Burger Miller can
design favorable channel policies vis a vis channel partners.
Burger Miller can use all these five communication tools to persuasively communicate to
customer – existence of the product, price of the product, differentiating features of the
product, places where people can buy the products, and finally how consumers can
effectively use the products or services.
Message – What are the specific aspects – brand awareness, product features etc, that
Burger Miller wants to communicate to its target customers.
Media – Which are the most effective media vehicle that Burger Miller can use to convey
its message to its target market.
Money – Like all other organizations, Burger Miller has limited marketing resources so it
has to figure out how it needs to spend to get the best outcome based on specified
objectives.
Measurement – How is the promotion campaign impact is measured. It can vary from
brand to brand within the organization. For example – new product campaign can be
measured on spreading brand awareness, while existing product marketing campaign
can be measured on repeat purchase or product recall.
Another popular form of advertising vehicle that has emerged in the last decade and
half is search engine marketing where advertisements are shown to the customers
based on their search history and browsing history. Like email advertising this can result
in relevant advertising to high potential prospective customers who are already
interested into products and looking for information regarding it.