1 Objectives 1 To identify the key elements

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Objectives 1. To identify the key elements in the marketing mix. 2. To understand the relationship and importance of the 4 Ps. 3. To explore the decisions and roles affected by the marketing mix. 2

Main Menu • Marketing Mix • Price • Product • Place • Promotion • Limitations & the 5 th “P” 3

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The Marketing Mix • Defines the key management decisions needed to be successful in marketing • Includes four basic marketing strategies, known as the “ 4 Ps” – price – product – place – promotion 5

The Marketing Mix • Must be customer driven • Should relate directly to a company’s target market • Includes four interrelated concepts and tactics • Refers to the variables a company can control 6

“The Mix” • Represents the idea that four significant marketing concepts (the 4 Ps) must be strategically coordinated and work together in order to create cohesive business decisions Business Buzz: The “marketing mix” concept was first developed by Neil H. Borden in 1964 after he published an article describing the role of marketing as a “mixer of ingredients” 7

Interdependence • The 4 Ps are directly related – decisions cannot be made about a product, without also considering the relationship of price – decisions cannot be made about promotion without understanding the importance of place • Proper utilization of the 4 Ps provides a company with a solid foundation for success 8

The 4 Ps Price Place The Marketing Mix Promotion Product 9

Marketing Mix Decisions Price Product Place Promotion list price appearance advertising discounts quality payment terms packaging channel members market coverage sales locations financing branding transportation promotional pricing services inventory control personal selling public relations message media budgets Business Buzz: The marketing mix consists of a number of essential functions. Which of the 4 Ps do you think is most important? 10

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Price • Includes a wide range of functions and strategies, including: – creating a sales price or price list – calculating mark-up percentage – using promotional pricing techniques – understanding pricing laws and discrimination – determining discounts, credit terms and available payment methods, such as: § cash and credit options § credit card machines § financing and payment plans 12

Basic Pricing Decisions • • • Determining a suggested retail price Implementing a pricing strategy Creating volume discounts Generating seasonal pricing Producing bundle prices 13

Price: Customer Application • Customers understand value • Price is a psychological variable – it alters a buyer’s motivation – price can influence the perception of status or luxury – price can stimulate or decrease demand • Pricing strategies which do not relate to customer habits will be unsuccessful 14

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Product • Selecting which products to buy and sell • Researching and creating product designs • Naming and packaging products • Updating, improving or eliminating products from a product line 16

Product • Developing new uses or new target markets for a product • Examining the product life cycle • Adding features to an old product 17

Basic Product Decisions • • Brand or product name Styling Quality Safety Packaging Repairs and support Accessories and services 18

Product: Customer Application • Customers buy benefits – not products • Products must satisfy a customer want or need • Consumers are often heavily influenced by brand name or packaging • Extended services or warranties can create customer loyalty • New and improved products often have a high success rate 19

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Place • Is also described as “distribution” • Refers to introduction of the product to consumers and determining appropriate transportation or delivery methods – using semi-trucks or airfreight carriers – utilizing intermediaries or wholesalers in the distribution process • Includes whether or not products should be sold online or internationally 21

Place (Distribution) • Understanding where customers shop • Determining how and when a product will be distributed • Making decisions about product expansion or international sales 22

Place (Distribution) • Determining which retail outlets will carry specific products • Selecting the shelf space or display style which is most effective • Researching where a store should be located 23

Basic Place Decisions • Distribution channels (trucks, pipes, air, water, etc. ) • Market coverage (exclusive, selective, inclusive) • Inventory management • Warehousing • Transportation and logistics 24

Place: Customer Application • Products should arrive on-time in order to meet customer needs • Inventory shortage may drive customers away • A store’s location may impact buying decisions • Some customers are prone to specific product outlets, such as the Internet 25

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Promotion • Includes decisions about the following: – advertising – personal selling – sales promotions – publicity and public relations 27

Promotion • Relates to the timing of promotional campaigns • Refers to the type of message communicated to customers • Requires selecting media outlets • Creates activities and strategies to increase sales 28

Basic Promotion Decisions • Selecting advertising mediums • Creating personal sales force tactics • Designing sales promotions and special offers • Maintaining effective media and public relations • Establishing a marketing communication budget 29

Promotion: Customer Application • Brand awareness is the first step toward product sales • Public relations and advertising have a direct impact on customer loyalty • Promotion stimulates a need and desire to buy • Special offers or campaigns often yield higher sales results 30

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Limitations of the 4 Ps • The marketing mix specifically applies to companies with physical products and often limits Internet and service-based organizations • By grouping marketing decisions into four broad categories, it is difficult to distinguish between specific activities such as financing, branding, shipping, etc. • Some industry-professionals have attempted to expand the concept by 32 adding a “fifth P”

The 5 th P • People – includes the following concepts: § clearly defining a target market § implementing customer-driven strategies § creating a service-oriented corporate image 33

Impact of the 5 th P • People determine a company’s level of success • Customers often provide helpful and needed suggestions • Word-of-mouth is the most powerful form of buying suggestion • Directing decisions toward the right market is critical 34

Importance of the Internet • Marketing mix decisions may directly relate to a company’s online presence • Leveraging full power of the Internet may be a key business strategy • The Internet can be used to change, optimize and enhance marketing strategies • Online services can be easily adapted to meet changing trends 35

Assessment 36

Assessment 1. What is the “Marketing Mix”? 2. Why is it important for all four elements in the marketing mix to work together? 3. Which of the 4 Ps relates to packaging? A. Price B. Product C. Place D. Promotion 37

Assessment 4. Which of the 4 Ps relates to warehouse inventory? A. Price B. Product C. Place D. Promotion 5. Which of the 4 Ps refers to creating a 50 percent off coupon? A. Price B. Product C. Place D. Promotion 38

Assessment 6. Which of the 4 Ps would consist of offering credit arrangements? A. Price B. Product C. Place D. Promotion 7. What is sometimes referred to as the “Fifth P”? 39

Assessment 8. Which of the following is not a basic pricing decision? A. Determining suggested retail price B. Creating volume discounts C. Determining packaging D. Producing price bundles 9. List two of the seven basic product decisions. 40

Assessment 10. Which of the following is not a basic place decision? A. Distribution channels B. Repairs and support C. Inventory management D. Warehousing 41

Resources • Merrihew, B. C. (2006, January 23). The Fifth "P" of Automotive Marketing. Retrieved October 7, 2008, from i. Media Connection: http: //www. imediaconnection. com/content/7866. asp • The Marketing Mix. (1999 -2007). Retrieved October 7, 2008, from Quick. MBA. Com: http: //www. quickmba. com/marketing/mix/ • The Marketing Mix. (2002 -2007). Retrieved October 7, 2008, from Net. MBA: http: //www. netmba. com/marketing/mix/ 42

Acknowledgements Production Coordinators: Technical Writer: Jessica Odom Megan Mitchell & Liz Weber Project Coordinator: Production Manager: Maggie Bigham Dusty Moore Brand Manager: Executive Producers: Megan O’Quinn Gordon Davis, Ph. D. , Jeff Lansdell Graphic Designers: Ann Adams & Daniel Johnson © MMXIII CEV Multimedia, Ltd. 43