Marketing Mix

Product & Price

 Market Mix
Four marketing decisions needed for the effective
marketing of a product:
• Product
• Price
• Promotion
• Place
important element of marketing
• The right product at the right price
with right promotion in the right place.
• The 'marketing mix (also known as the 4 Ps)
is a foundation model in marketing
 Market Mix or Four Ps
Product – the goods and services produced to satisfy a customer need
or want
When new product is launched onto the market, Consumers may see;
• Advertised to encourage consumers to buy
• Low price

• If is not right for consumers – not buy

• Successful products are bought over
and over again by customers
• This help to build brand image
Cost and benefits of developing new product:
• Successful business need to operate in very competitive and fast
changing markets
• the survival and continued depends on developing new products to
meet consumers needs and wants
if the company wants to be successful they may need to:
• Develop new product
• Change an existing product to meet the changing tastes of customers
• Change an existing product to enter a new market.
 Brand image
Brand: a name, image or symbol that distinguishes a product from
competitors’ products,
• Brand image the general impression of a product held by consumers
Benefits of brand image to sales and revenue
• To recognize more easily
• Can be priced higher than less well- known brands
• Easier to launch
 The product life cycle
• Product life cycle- the pattern of sales of a product from introduction to its
withdrawal from market. the life cycle represents the sales of the product over
time.
The product life cycle is divided into four main stages:
• Introduction stage- sales are low, and cost high
• Growth stage- product is become better know,
sales are increasing, earn profit
• Maturity stage – sales are not growing but
are not falling
• Decline stage- sales are falling. Becomes
unprofitable and withdrawn from market
The product life cycle

Example of fashion clothing

The product life cycle

Example of motor cars

The product life cycle
PRICING
METHODS
PRICE ELACTICITY
 Extension strategies
A business will want to keep the product in this stage for as long as possible.
They try to do this by using extension strategies include :
• Finding new markets for the product
• Finding new uses for the product
• Adapting the product
• Increased advertising and other promotional activities
Sales

Time
How the product life cycle influences marketing decision
Product
Introduction- only a basic model of the product is available

Growth – change might be made to the product as a result of feedback from

consumers in the test market

Maturity- extension strategies might be used to keep the product in this

Decline- product and packaging not altered

 Market Mix or Four Ps
Price – the amount paid by the customer to the
supplier when buying a good or service.
Price is often the most important influence on costumer demand
The market for most goods and services is very competitive.
• To buy lower--- price product- difference with product quality
• To buy higher price --- to get certain status

• Price affected by the availability of supply ---become scarce

 Pricing methods
The most common pricing methods are :
 Pricing Methods
Market skimming- setting a new high price for a new product that is unique
or very different from any other product on the market.
- New product --- google glasses

- Development of new medicines

- Businesses sometimes need a large profit to get back the high costs of research
and development of the product.
 Pricing Methods
• Penetration pricing is also used for new products. The price
is set at a lower level from similar products already on the
market.
• The low price may encourage consumers to try the product.
• Once the business has built up some customer loyalty for the
product it usually increases the price to a level similar to that
of its main competitors.
 Pricing Methods
Competitive Pricing- setting a price similar to that of competitors’ products
which are already established in the market.
 Pricing Methods
Promotional Pricing-
- Loss- Leader pricing- is most often used by retailers, such as supermarkets. They
offer a few products well below the normal price, sometimes even at a loss.
These prices attract customers into the store who will also buy other products at
their normal, profitable prices.
- Buy one get one free
- Discounting
 Cost- Plus Pricing
Pricing Methods Setting price by adding a fixed amount to
the cost of making or buying product
There are two main methods of cost-plus
pricing:
■ mark-up pricing
■ full-cost pricing.
Both methods are very similar. The price
is set by adding a fixed amount – usually
a percentage – to the cost of making or
buying the product.
 Price elasticity of demand
Demand – the quantity of goods and services consumers are willing and able to
buy.
- Demand for goods and services will fall as a result of an increase in their price

Increases demand price

increases
Or
Price Decreases Decreases
Demand
Price

Simple demand curve Demand

 Price elasticity of demand
Price elasticity of demand- measures by how much demand (sale) for a
product changes when there is a change in its price
bottle water cinema tickets

Elasticity:
 Price elasticity of demand
Price inelastic of demand- the percentage change in demand (sales) is less
than the percentage change in price.
bottle water

Elasticity: the ability to change

 Price elasticity of demand
Price elastic of demand- the percentage change in demand (sales) is greater
than the percentage change in price.
cinema tickets

Elasticity: the ability to change

Price elasticity of demand
 Price elasticity of demand and pricing decisions
We know that any increase in price will decrease sales and any decrease in price
will increase sales. However, what is more important is how a change in price will
affect revenue
- Revenue – the amount earned by a business from the sale of its products
Price change Price elasticity of demand Effect on revenue

Increase Price Price inelastic demand Increase revenue

Decrease Price Price inelastic demand Decrease revenue

Increase Price Price elastic demand Decrease revenue

Decrease Price Price elastic demand Increase revenue