1. GCSE Business Communication Systems
Marketing Mix

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Learning Outcomes
Students should be able to:-
demonstrate knowledge and understanding of the PLC and strategies used to extend the PLC
demonstrate knowledge and understanding of the 4 aspects of pricing
demonstrate knowledge and understanding of advertising and sales promotion
demonstrate knowledge and understanding of channels of distribution
analyse the impact digital technology has on the marketing mix
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3. Marketing
“Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements efficiently and profitably.”
The Chartered Institute of Marketing (CIM)
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4. What is the Marketing Mix
“The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market.” Economic Times
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Marketing Mix
The marketing mix is made up the four P’s:-
Product
Price
Place
Promotion
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Product
Appearance
Features
Function
Cost
Packaging
USP
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7. What is the Product Life Cycle
“The product life cycle (PLC) is the cycle through which every product goes through from introduction to withdrawal or eventual demise.”
Economic Times
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8. Product Life Cycle (PLC) Stages
Research and Development
Introduction
Growth
Maturity
Saturation
Decline
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9. Product Life Cycle Diagram
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10. Research & Development
This is the first stage of the PLC
Market research is carried out
Product tested
Expensive stage – large costs
No income
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Introduction
This is the stage when the product is launched
into the market
At this stage, there is heavy marketing and product promotion
Sales are slow as customers are made aware of the product
Expenditure high
Profits low
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Growth
This is third stage of the PLC
Sales increase rapidly as customers are now aware of the product
Customer loyalty
Competition can be high
Profits should begin to increase
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Maturity
This fourth stage of the PLC
Sales are maintained as the product is established in the market
Competition becomes very intense
Difficult to increase the volume of the product sales any further
Business start to think of ways of extending the PLC
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Decline
This is the final stage of the PLC
Sales have fallen and product becomes unprofitable
Price wars continue
Profits are lower
Further advertising or price reductions will not be successful
Product will be withdrawn from the market
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15. 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
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Pricing Policy
Cost Based Pricing
Competitor Based Pricing
Penetration
Skimming
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Cost Based Pricing
A method of pricing in which a mark-up is added to the
total product/service cost.
This involves:-
Working out the total fixed and variable costs of the product
Deciding the percentage profit you want.
Adding the two together to get the selling price
The advantage of this pricing policy is that the business is
guaranteed a profit. Disadvantage is if competitors sell
at a lower price they don't get sales to make the profit.
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18. Competitor Based Pricing
A method of pricing which involves the setting prices based on what your competitors are charging. If there is strong competition in the market, customers are faced with a wide choice leading to better value for money.
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Penetration
A method of pricing when a business sets a low price at the beginning in order to gain entry into an existing market. This is used for new business trying to enter an existing market which is well established. They need to offer low prices to attract customers. The idea that they gain the customers and then they can increase the price when they gain regular customers. Risk is that the prices can be set very low which makes profit minimal.
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Skimming
Skimming is when a business set a high price initially to ‘skim’ the market and gain as high a profit as possible. This policy is used for new products which have little competition at the start eg smart phone. People are willing to pay high prices to be the first to have the new/unique product. Later on other businesses come into the market and the prices have to fall to maintain sales, this policy can be mean high profits can be short lived.
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21. 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
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Methods of Promotion
Advertising
Informative
Persuasive
Sales Promotion
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Advertising
Advertising is an important aspect of promotion and
one in which business invest large amounts of money.
Examples include:-
Radio
Newspapers
Television
Mail shots
Poster
Billboards
Vehicles
Internet
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Sales Promotion
Sales promotion is the term used to cover all methods which business use to persuade customers to purchase their product.
Examples include:-
Coupons
Loyalty cards
Competitions
Product endorsements
Free offers
Merchandising
Point of sale displays
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Place
Place is about getting the product to the customer by having the product in the right place so that it sells most successfully.
This means that manufacturers must be very careful where they sell their product so that their image is maintained. They also plan the most effective way for transport and delivery.
To achieve this businesses must:-
Identify the most appropriate retail store for their product
Get the best possible channel of distribution for their product
Identify the most appropriate transport method for their product
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26. Place - Channels of Distribution
Manufacturer Retailer Wholesaler Consumer
Manufacturer
Retailer/Internet Retailer
Consumer
Manufacturer
Consumer
Check channels of distribution
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27. Factors Affecting Choice of Distribution Channel
Type of goods
Value of goods
If the product is
perishable
Costs involved
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28. Key Trends - Distribution Channel
Growth of digital technology
Growth of call centres
Growth of retail parks
Diversification of products and services offered by retailers
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29. Impact of Digital Technology on the Marketing Mix
Businesses can no longer rely solely on traditional marketing materials like newspaper, posters, flyers etc
They need to attract the attention of their customers by embracing digital technology in their marketing strategy.
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30. Impact of Digital Technology on the Marketing Mix
Product – eg more advanced features, packaging (ie downloads)
Price – eg more competitive pricing
Promotion – eg digital advertising
Place – eg downloads, same day delivery
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31. What is Digital Marketing
“Digital marketing is an umbrella term for the marketing of products or services using digital technologies, mainly on the Internet, but also including mobile phones, display advertising, and any other digital medium” Wikipedia
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32. Examples of Digital Marketing
Search Engine Optimization (SEO)
Search Engine Marketing (SEM)
Social Media Marketing (SMM) – eg Facebook / Twitter / Snapchat / Instagram
Electronic Billboards
Text reminders etc
Marketing
Blogs
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33. Impact of Digital Marketing
Benefits
Faster communication
Cost efficient
Professional
Larger target audience
Customers more informed
Corporate Image
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34. Impact of Digital Marketing
Drawbacks
Communication too fast
Capital may need to be invested
Training/retraining may be required
Can be 24/7
Over communication
Technology breakdown
Digital divide
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Pupil Activity
Working individually answer the following past paper questions:
2016 Question 2a Market Research
Question 2b Pricing
Question 2c PLC
Question 2d Promotion
2015 Question 3a Market Research
2013 Question 3a Market Research
Question 3b Promotion
Question 3c PLC
Question 3d Pricing
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36. Learning Check Can you:
demonstrate knowledge and understanding of the PLC and strategies used to extend the PLC
demonstrate knowledge and understanding of the following aspects of pricing
Cost-plus pricing
Competitor-based pricing
Penetration
Skimming
demonstrate knowledge and understanding of advertising and sales promotion
demonstrate knowledge and understanding of channels of distribution
analyse the impact digital technology has on the marketing mix
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