1. Market Planning
Unit 4.2 The Marketing Mix

2. Marketing Mix (8 P’s!) Product Price Place Promotion People Process
Physical evidence
Packaging

3. Product
Can be a physical good (e.g. a car) or intangible service (e.g. a hair cut)
Products fulfil the needs of the consumer
What differentiates one product from another are the collective and relative customer benefits of purchasing that product.
E.g. the brand image, packaging, functions and after sales care

4. Categories of products
Producer products – these are products sold to other business as supplies to further the production process e.g. raw materials such as steel
Consumer products – these are products sold to the end user
Convenience products – fast moving consumer goods such as food
Consumer durables – Long lasting goods such as furniture
Speciality products – Expensive products such as diamonds

5. Product Line and Product Mix
Product Line – collection of related products e.g. different types of cars from the same company
Product Mix – the variety of products sold by a company. This is when a company sells more than one type of product such as Apple (laptops, desktops, ipods, ipads, iphones etc.

6. Price
If a product is over priced then demand would be less as consumers will feel they are being ‘ripped off’
If the price is too low then the product may be seen as inferior quality
Economists define the ‘correct’ price as the equilibrium price where buyers and sellers agree on an appropriate price
Buyers want value for money and sellers want a price that exceeds their costs of production to earn sufficient profit

7. Pricing decision depends on:
Demand
The higher the demand the higher the price tends to be
Supply
the lower the supply the higher the price, e.g. oil and also diamonds
Business Objectives
Non profit making businesses will see price in a different way to profit making businesses
Competition
The more competition the more sensitive consumers are to price as there are many substitutes to choose from
Costs of production
The higher the cost of production the higher the price tends to be
Corporate Image
Prestigious businesses can charge a higher price due to their image

8. Place This is how the product is distributed to the consumer
Channels of distribution which are the intermediaries used to get a firm’s products to consumers
More detail on this in the next unit

9. Promotion Refers to the strategies used to attract customers
Above the line – promotional activities that use mass media e.g. television and radio
Below the line – Promotional tactics such as packaging and direct mail
More detail on this in the next unit

10. People (customer relations management – CRM)
The attitudes and aptitudes of employees will determine the experience and quality of service
Happy customers are more likely to stay loyal to the business and use word-of-mouth promotion
Good after sales service can gain customer a competitive advantage
Customer relations manager (CRM) involves setting standards for good customer service
CRM promotes customer lifetime value – the profitability that can be gained during the lifetime of a positive relationship with customers rather than the profits made from a single transaction with the customer
It can be argued that it is cheaper to keep existing customers than to find new ones!

11. Process
Process refers to the methods and procedures used to give clients the best possible customer experience
Process can help to build customer loyalty
Customers are constantly in search of improved convenience
It is inconvenient for customers to wait a long time for items to be delivered to them!

12. Physical evidence
This is the image portrayed by a business (or perceived by customers)
Businesses that offer services have to give more attention to this than those who sell products only

13. Packaging
This refers to the way in which a product is presented to the customer
It’s a form of product differentiation
Packaging is important when a product’s design, functions or features cannot be easily differentiated from others on the market

14. Packaging is important in the marketing mix because:
Can have a profound impact on the customer perceptions of the product or brand
Acts as a form of differentiation
Protects the product against damage during transportation
Labelling can be used to provide information
Can make the distribution of products easier
Encourage impulse buying
Can be used for advertising the product

15. Limitations of packaging
Cost
Environmentalists will argue that marketing creates excess packaging, at the cost to the environment – e.g. plastic bags!
Some argue that packaging is part of promotion and should not be a separate part of the marketing mix
Packaging does affect costs, prices, customer perceptions and consumer demand

16. Limitations of the marketing mix
Cost – Does the business have the resources to carry out its plans effectively? E.g. small business may not be able to run a TV advert
Competition – If one firm starts a advertising campaign it can force others to do the same to maintain market share
New Technology – e.g. the use of social networking sites allowing businesses to use ‘viral’ campaigns