And the Marketing Mix (4p’s)

Marketing Mix The 4 Ps Product Price What product(s) should we sell? How should they be branded? What is the best positioning? Price What are the pricing objectives? How much should we charge? Product Price The 4 Ps Marketers have essentially four variables to use when crafting a marketing strategy and writing a marketing plan. They are price, promotion, product and distribution (also called placement). They are sometimes referred to as the four Ps. A marketing mix is a combining of these four variables in a way that will meet or exceed organizational objectives. A separate marketing mix is usually crafted for each product offering. When constructing the mix, marketers must always be thinking of who their target market are. Mix coherency refers to how well the components of the mix blend together. A strategy of selling expensive luxury products in discount stores has poor coherency between distribution and product offering. Promotion What value does our product add for consumers? What is the best way for us to convey our message to consumers? Place Where, when and how will consumers access our products? How will we distribute? Place Promotion 2

Marketing Mix (4 P’s) PRODUCT/SERVICE – the actual product, (design, colour, materials, taste, scent) or service the company sells. PLACE (CHANNELS OF DISTRIBUTION) -These are the methods of how goods or services are distributed to and reach the consumer. ex transportation and where the customer can purchase the product/services.

Marketing Mix (4 P’s) PRICE -Must consider how much it cost to make, variable and fixed costs and desired profit PROMOTION - to increase the awareness of their product/service to potential customers and to convince them they are better than anyone else’s (competitors).

1) Promotion Image and Branding Branding is establishing an identity for a product that differentiates it from the competition. It is made up of a brand name, logo, slogan, and trademark and creates brand loyalty.

Types of Brands A National Brand is a product which is branded by a manufacturer's brand and is typically supported by heavy advertising. Coca Cola and Heinz Ketchup would be examples of this.

Types of Brands A private Brand or “Store Brand” label is a brand that a retailer creates to exploit their corporate image Only that retailer can sell it It allows them to differentiate themselves (And control price and quality) Examples: Loblaw’s “President’s Choice” Shopper’s Drug Mart’s “Life” brand HBC’s “togo” brand

Types of Brands Generic Brands or “No Name Brands” The lowest cost because the labeling and packaging is cheaper There is no promotion for this type of brand.

LOGO A logo is the part of the brand in the form of a symbol that is usually registered A brand mark and trademark are examples of a logo

SLOGAN A slogan is a catchy phrase used to remind the consumer of a company or brand Harvey’s makes a hamburger a beautiful thing”

Target Market All the characteristics of the market segment, (customers), that you are selling to.

Demographics Age range Income range Gender Marital status Number of Children Occupation Geographic Location

Psychographics Attitudes Opinions Interests Lifestyle Needs to be filled What or who influences the purchase decision How will find out about your product

2) Price? Definition: The amount of money, asked for or given in exchange for something else. It is an arbitrary amount determined by marketers. PRICE = VALUE Pricing is one of the 4Ps of the marketing mix: The price of the product or service affects How much demand there will be How much you will sell How consumers will view your product How much competition you will have * * Price too high, risk not selling * * Price too low, risk not selling

Imagine you want to buy some chocolate. Which of these will you buy? Move to the corner of the room that matches your choice. Discuss why you chose that product. Broken chocolate bar pieces from the bulk food store. Price: $1 for about 2 bars Toblerone bars. Price: $6.99 for a large “gift size” bar. GODIVA chocolates – considered by many to be “the best” Price: $20 for a small box of about 12 chocolates Widely available chocolate bars. Price: $1 each

Imagine you are going to buy a car. Which of these will you buy? Move to the corner of the room that matches your choice. Discuss why you chose that product. Lamborghini Gallardo – often mentioned in rap songs. Price: $250,000 Audi TT – a cool design featured in several movies. Price: $60,000 A sporty and economical new Toyota Echo Price: $15,000 1983 used Datsun Price: $600

Imagine you are going to buy ketchup. Which of these will you buy? Move to the corner of the room that matches your choice. Discuss why you chose that product. Annie’s Organic Ketchup Price: $4.50 Hunt’s Ketchup Price: $1.99 Heinz Ketchup Price: $3.50

What influences a price? Convenience Status and image (positioning) Trends Competition Quality Cost to make and sell it How much the target customer will spend for it Profit that a company wants to make How much a company wants to sell How quickly they want/need to sell Others? Pricing is one of the 4Ps of the marketing mix: The price of the product or service affects How much demand there will be How much you will sell How consumers will view your product How much competition you will have * * Price too high, risk not selling * * Price too low, risk not selling

Psychological Pricing Refers to techniques that create an illusion or impression for customers that make them buy

Psychological Pricing Techniques Odd-even pricing $2.99 or $100 Odd numbers convey bargain! Even numbers convey quality Prestige Pricing expensive $1000+ Rolex watches Conveys status You’ll look rich or cool

Psychological Pricing Techniques Multiple Unit pricing 4 chocolate bars in a pkg You think you’re getting a bargain Increases sales volume Bundle Pricing shampoo and conditioner bundle Price is lower than if you bought separately Getting a bargain

Psychological Pricing Techniques Promotional Pricing Loss leaders – sell products at cost or below to get customers in to the store Prices reduced for a certain time, ie. at holidays Everyday Low Prices (ELDP) Low prices every day with no intention of raising them or offering more discounts

3) Product - Product Mix Includes all the different products that a company makes or sells.

Developing Existing Products Line Extensions – new product lines, items, or services Original Product Newer Products

Developing Existing Products Product Modifications – an alteration in a company’s existing product

4) Place - Distribution? The paths of ownership that goods follow as they pass from the producer to the consumer In other words…. How a product gets from the producer to the customer.

Distribution Intensity Intense Selective Exclusive # of Dist. Many Fewer Rare Cust. Exp. Quick & easy Several visits Willing to Travel Service Minimal Some High Competion High Medium Low

Direct Distribution Direct link between the producer and the consumer Ex: Dentist, Roots, many restaurants Good technique when sales representatives are involved Producer Consumer

Indirect Distribution Intermediaries take possession of the goods, add a mark-up, and then resell them to consumers. Importers Wholesalers Retailers

Indirect Direct Manufacturer Manufacturer Wholesaler Retailer Consumer