MARKETING : The Marketing Mix - 4 "P"s

                                                 


MARKETING MIX

The term marketing mix refers to the primary elements that must be attended to in order to properly market a product. Also known as The 4 Ps of Marketing, the marketing mix is a very useful, if a bit general, guideline for understanding the fundamentals of what makes a good marketing campaign. Here is a brief description of each component of the 4 Ps of the marketing mix with examples of how the “Manel Bakery” uses Marketing concept.

Product Mix

Price Mix

Place Mix

Promotion Mix

These four elements are adjusted until the right combination is found that serves the needs of the product's customers, while generating optimum income.

                          

Product Mix

Product mix is a combination of products manufactured or traded by the same business house to reinforce their presence in the market, increase market share and increase the turnover for more profitability. Normally the product mix is within the synergy of other products for a medium size organization. However large groups of industries may have diversified products within core competency. 

One of the realities of business is that most firms deal with multi-products .This helps a firm diffuse its risk across different product groups. Also it enables the firm to appeal to a much larger group of customers or to different needs of the same customer group.

“Manel Bakery” they introducing one or two new bakery items for their customers every month to attract the customers more and more.

Investing in the Product Mix

The product Mix will have the following dimensions.

01. Length – Identifies how many different types are there.                            (e.g.:- “Manel Bakers” is having different types of cakes, bakery items &                    sweet Items)

02. Breadth – The variety of products under each product type.                       (e.g.:- “Manel Bakers” is having different names of cakes e.g.: Chocolate cake,            Ribbon cake, Butter cake, Fruit cake & etc)

03) Depth – This Identifies for each variety what the different types of sub          categories are (Chocolate icing cake, Chocolate Fudge cake, Chocolate            Cake with Roasted Nuts, Chocolate Cup Cake).  

BCG Matrix

                                                             

This matrix was developed Boston consulting group for organisation when analyse the product mix of an organisation.

This analysis carried out based on market share and market growth of its product.

Place Mix

Place Mix is concerned above how the product will be made to reach the customers and it will focus on the following areas.

Although figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer. 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system.

The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers.

           i)    Distribution Channels (through "Manel Bakery" outlets)

          ii)    Storage and ware house (they are keeping stocks only for day                   today business in their own storage house in a better way)
           
         iii)   Transportation vehicles
                    (they have their own vehicles for transport the cakes,bakery items &               sweet items for their own outlets , they are transporting day today                 for their outlets).

         iv)    Location of Outlets ( near to main bakery within 10km all outlets                                                                                                           located).

         

         v )   Arrangement of sales areas( “Manel Bakery” owners targeted for where                                                                          people are gathering a lot)

          vi)   Stock Levels(they are keeping stock only for day today business)

         vii)   Coverage.

With regard to a Place Mix the following decision have to be made;

    01)  Is the place of purchase convenient for the customers                                     ( Eg: McDonalds drive-thru)                           

     02)  Is the method of distribution is suitable for the product                                      ( Eg: “CK” into you should only be distributed thru high end malls.)

                                          

     03)  Is the product available in the right quantities.                                             (Eg: Near festival seasons “Coca-Cola” extra stocks available at                                                                                                         shops.)

Distribution Strategies

This identifies the different methods through which products are made to reach the customers.

ZERO Level – Company sell direct to the customers. In other words this is                          called Direct Marketing.

                One Level – Company sells to the customers through one intermediary.                             (eg: Newdale yogurt sold in Cargills) 

                Two Level – Products are made to reach the customers through two                                intermediaries.(eg: Anchor milk powder sold through whole                                                                                    sellers and retailers)

                N Level – Products are made to reach customers through more than two                        intermediaries.

Promotion Mix

Promotion is an important part of marketing mix of a business enterprise. Once a product is developed, its price is determined the next problem comes to its sale i.e., creating demand for the product. It requires promotional activities. 

The activities are technique which brings the special characteristics of the product and of the producer to the knowledge of prospective customers. Promotion is a process of communication involving information, persuasion, and influence.

The term 'selling' is often used synonymously with promotion. But promotion is wider that selling. Selling is concerned only with the transfer of title in goods to the purchaser, whereas promotion includes techniques stimulating demand. These techniques include advertising, salesmanship or personal selling and other methods of stimulation demand.

Advertising and sales promotion techniques are indirect and non-personal whereas personal selling or salesmanship is a direct and personal technique. All these techniques, however, should be integrated with the marketing objective of the enterprise. The salesmen can report about the different advertising and other promotional appeals as they are in close touch with the consumer public and market conditions.

Promotion is essentially the sales efforts of a business enterprise and includes the function of informing, persuading and influencing the purchase decision of the existing the prospective consumers with the object of increasing sales volume and profits. Promotion is the efforts of the seller to sell the product effectively. Promotion is the communication with the customers to pursue them to buy the product. It is the duty of the marketing manager to choose the communication media and blend them into an effective promotion programmed. These are more than one type of tools used to promote sales. The combination of these tools with a view to maintain and create sales is known as promotion mix. 

Promotion mix is the name given to the combination of methods used in communicating with customers. There are four tools of promotion mix. Advertisement, Personal selling, Publicity and Sales promotion. These are called elements of promotion mix.

“Manel Bakery” uses banners to introduce their new products and promotions to attract customers. When during the World cup season they gave an opportunity to their customers to watch the matches on a big screen.

To attract more customers in weekends evening to organized event for new evening bands to live perform in front of their bakery.

“Manel Bakery” marketing people get together and once a month they are going for their customers residencies to introduce their new products as well as to collect new ideas from them.

Packaging the products of the company in on attracting manner and innovating ways to make it more popular.”Manel Bakery” marketing people introduced a new bags for package their bakery products when customer take away to their houses. It’s very colorful and recyclable bag. 

Certain modern types if promotion come up;

     01)  Product placement – including a product in a film or on music, video

                                  Eg: “Audi” car in “transporter -03”

     02)  Viral Marketing – This is where the organization will create a video which is attract and post it on the internet, Then people will share with each other and send the links to one another through which many people get to know about it.

Eg: “EKCHO” clothing and air force “one” tagged video campaign.

    03)   Ambush Marketing - This is where the organization will plant its company products and logos in particular situations and where there is a very high attention and focus by the customers.                                                                                                                               (Eg: “Mathaka mandira” song and Elephant house Cream Soda)

        04)  Guerilla Marketing – This refers to innovative and uncommon marketing tricks which are usually carries out by small organisation with limited promotional budget.

(Eg: “CALGARY FARMERS” hanging fresh apples on tress during winter seasons).

Creating a marketing campaign

The following steps must be followed when carrying out a marketing  campaign.

        

       

                        i) Define the product or service that is being promoted.

                       ii) Identify the target market and the target group that is being focused on.

                     iii)Select the different media that will be used for the promotions.

                      iv) For each selected media develop different communication strategies.

Information Technology can also be used for promotional campaigns.

       a)      To create attractive promotional materials.

       

       b)      To distribute promotional materials via e-mail and internet.

       c)      To carry out market research about geographical areas before the                    promotions.

Price Mix

The price you set for your offering plays a large role in its marketability. This is the only element of the 4 P’s is the only revenue generating component. Pricing for offerings that are more commonly available in the market is more elastic, meaning that unit sales will go up or down more responsively in response to price changes. 

By contrast, those products that have a generally more limited availability in the market (but with strong demand) are more inelastic, meaning that price changes will not affect unit sales very much. The price elasticity of your offering can be determined through various market testing techniques. All Discounts, Credit policies & Prices fall under this Mix.

                 I.          Competitive – ensuring that the price of a product closely matched with                               the competitors.

       

                 II.            Cost Plus – Regardless the competition pricing an organization will add                            profit margin on   top its cost and charge.

    

        III.            Penetration – Charging a low price when entering a new market.                                       (Eg: “AIRTEL” Rs.2/= per minute when the time of                                               entering to Sri Lankan market.

          IV.            Predatory – Organization reducing prices so that new entrance find it                             difficult to survive in the market.

                     V.            Premium – This is where very high prices will be charge to maintain the                            brand image.

                           (Eg: Tag Heuer)

                   VI. Price Skimming – Organization charging very high prices at the beginning and later when competition came up with similar products reducing the prices.

             

                VII. Selective category (differential pricing) – An organization charging different pricing for different categories of product.                                                                   (Eg: :Johnny Walker)

                                   

        VIII.         Selective consumer group – Senior Citizens been charges a lower price                                                   in super markets.

                    IX.         Selective Peak – When products reach maturity they will be add at a                                       lower price.

                           (Eg: “BATA” stock clearance sale)

                  

                     X.         Loss leader – Giving the core product or the main product at a low price but charging high prices from other related products.                                       ( Eg: shaving razor are sold at a low price. But the blades, aftershave gel are expensive

Thank you for joining with me, meet with you a new post.

OSHADA JAYATHILAKE