Business and Communication Systems MARKETING MIX GCSE Business & Communication Systems

Business and Communication Systems Learning Intentions Identify and discuss a range of pricing policies: –Value-based pricing –Competitor-based pricing –Cost-plus pricing Demonstrate knowledge of the product life cycle and discuss the strategies used to extend it Demonstrate knowledge and understanding of the most commonly used methods of promotion: –Advertising –Sales promotion –Publicity Identify the most appropriate method of promotion in particular circumstances Demonstrate knowledge and understanding of the most commonly used channels of distribution of goods and services Demonstrate an understanding of the main methods of transport used to distribute goods and explain why particular methods are chosen in particular circumstances

Business and Communication Systems Marketing Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably. CIM's official definitions

Business and Communication Systems The Marketing Mix – The Four P’s PRODUCT PRICE PROMOTION PLACE

Business and Communication Systems The Marketing Mix In order to achieve success all businesses must get the marketing mix right. This involves having the right product at the right price in the right place using the right promotional methods. These are known as the 4 P’s.

Business and Communication Systems Pricing Policies VALUE-BASED PRICING – the setting of price based on the benefits the product provides to consumers. SKIMMING is a value-based pricing policy COMPETITOR-BASED PRICING – price is set based on what competitors are charging COST-PLUS PRICING – where the total costs of producing a product are worked out and a profit margin added

Business and Communication Systems Factors that Affect Price COST OF PRODUCTION NEED TO MAKE A PROFIT COMPETITION IN THE MARKET PRICE WHICH THE MARKET CAN BEAR SEASON QUANTITY OF STOCK IN HAND

Business and Communication Systems Product Life Cycle

Bu siness and Communication Systems Product Life Cycle Research and development – product is being developed and tested. Introduction – sales are often slow, heavy promotion to let customers know about the product. Growth – sales begin to grow rapidly, profits usually made. Maturity – sales growth is slower, more competition, the firm will try to develop/maintain brand loyalty. Saturation – sales start to level off, stocks begin to build up, the market is saturated. Decline – sales declining, profits falling, substitutes appear.

Business and Communication Systems Strategies to Extend Product Life Cycle Modify the product Change the packaging Increase promotion Reduce the price Find new market Encourage increased use of product

Business and Communication Systems Methods of Promotion ADVERTISING −INFORMATIVE −PERSUASIVE SALES PROMOTION −COUPONS AND LOYALTY CARDS −COMPETITIONS −PRODUCT ENDORSEMENTS −FREE OFFERS −MERCHANDISING PUBLICITY −RAISING PUBLIC AWARENESS −FREE

Business and Communication Systems Manufacturer Retailer Wholesaler Consumer Manufacturer Retailer Consumer Manufacturer Consumer Place – Channels of Distribution

Business and Communication Systems Factors Affecting Choice of Distribution Channel TYPE OF GOODS VALUE OF GOODS IF THE PRODUCT IS PERISHABLE COSTS INVOLVED

Business and Communication Systems Key Trends Distribution Channel GROWTH OF E-COMMERCE GROWTH OF CALL CENTRES GROWTH OF RETAIL PARKS GROWTH OF DIGITAL TELEVISION SHOPPING DIVERSIFICATION OF PRODUCTS AND SERVICES OFFERED BY RETAILERS

Business and Communication Systems Main Methods of Transport Road – most frequent form of transport; fairly cheap and fast; can deliver door to door, can send at any time (no set timetables). Firms may deliver themselves or hire a road haulage company. Rail – used for moving bulky goods long distances. Air & Sea – used mainly for international transport. Air transport is expensive but fast. Sea transport (such as cargo ships) is used for bulky items. Pipeline – used for oil and gas transportation.

Business and Communication Systems Factors Influencing Choice of Method of Transport How important it is to get the goods to their destinations quickly Cost of transport Nature of the product eg is it fragile? Expensive? Heavy?