Post on 10-Jun-2015
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BSBMKG502BESTABLISH AND ADJUST THE MARKETING MIX
OBJECTIVES
• Know how to evaluate each component of the marketing mix
• Learn how to determine marketing mix for specific markets
• Understand how to monitor and adjust marketing mix
• Gain the essential skills and knowledge required for this unit
EVALUATE EACH COMPONENT OF THE MARKETING MIX
1.1 Identify key characteristics of products or services and estimate their significance to the market
WHAT ARE THE KEY CHARACTERISTICS OF YOUR PRODUCTS OR SERVICES?
• What is your unique selling proposition?
• How does your product or service stand out from your
competitors?
• Do you offer better service or are your products and services
highly price competitive?
• Do you offer better value or are you offering the most advanced
technology?
EVALUATE EACH COMPONENT OF THE MARKETING MIX
1.2 Review pricing policy and analyse pricing variables to determine their effect on demand
PRICING VARIABLES MAY INCLUDE:
• Cost of ownership
• Credit terms
• Discount percentages
• Discount structure
• Financial deals
• Leasing arrangements
• Price point chosen
• Psychological elements
• Residual value
PRICING POLICY AND ANALYSE PRICING VARIABLES
• Typically, when you are addressing your pricing strategy for
products and services, you would analyse pricing variables from
normally listed prices based on region, sales potential by location,
dates, or other marketing factors.
• The objective is to create a pricing policy or strategy to achieve
optimal balances between sales volume and income per unit
based on the product or service characteristics you addressed
earlier.
PRICING IS CENTRAL TO PROFITABLE MARKETING MANAGEMENT
These would include:
• Strategic product launches
• Targeted advertising campaigns
• Seasonal or incentive based price deals
• Additional distribution channels
PRICE AND ITS INTERACTION WITH PROMOTIONS
• A typical strategy used by organisations is to observe the manner
in which sales of products or services react to changes through a
range of promotions.
• These changes may range from minor to major depending on the
alterations made from one campaign to another.
DEMAND
• It is a commonly accepted principle in marketing that states that
there is a negative relationship between the price of products or
services and the quantity purchased.
• It is based on the generally accepted rule in economics that when
a product or service becomes more costly, fewer people will
choose it.
INFLUENCING FACTORS
• If the demand is greater than the availability your customers
would likely change attitudes and be anxious to buy products and
services.
• You, the organisation, may be unwilling to supply your products
and services at the same or increased rate due to a shortage in
quantity.
• In this situation, to either satisfy demand or to address the
shortage your customers would have to pay a higher price in order
to get the product or service they want.
EVALUATE EACH COMPONENT OF THE MARKETING MIX
1.3 Analyse promotional methods to determine their importance to marketing outcomes
IMPERSONAL PROMOTION SUCH AS:
• Advertising
• Sales promotion
PERSONAL PROMOTION SUCH AS:
• Direct marketing
• Face-to-face selling
• Personal selling
• Segmentation
MARKETING IS AN UMBRELLA TERM COVERING:
1. Market research
2. Advertising
3. Promotions
4. Public relations
5. Sales
6. Customer service
WHAT IS YOUR MOTIVATION?
• The most cost-effective method of getting your message to the
right people
• The most suitable method to suit your advertising style
• The target audience for that product or service
• The specific instructions provided by the client, customer or
department
YOUR PRODUCT OR SERVICE?
• Where is your business based?
• Who do you want to advertise to?
• Why do you want to advertise?
• Is your product or service designed for a specific market sector?
• Where is your main target audience located?
SALES PROMOTIONS
These may include:
• Coupons
• Free samples
• Contests
• Demonstrations and exhibitions
• Interest free periods
• Temporary price reductions
MARKET SEGMENTATION
• Market segmentation is a marketing technique
used to enable a business to better target its
products or services at the right customers.
• It is about identifying the specific needs and
wants of customer groups and then using those
insights into providing products and services
which meet customer needs.
EVALUATE EACH COMPONENT OF THE MARKETING MIX
1.4 Review channels of distribution and estimate their significance in relation to marketing outcomes
CHANNELS OF DISTRIBUTION MAY INCLUDE:
• Dealers
• Delivery service
• Distributors
• E-business
• Franchisees
• Internet
• Mail order
• Podcasts
• Retail
EVALUATE EACH COMPONENT OF THE MARKETING MIX
1.5 Identify and analyse level of customer service provision to determine its significance to marketing outcomes
LEVEL OF CUSTOMER SERVICE MAY INCLUDE:
• After sales service
• Call centre support
• Electronic client service
• No customer service
• One-on-one personal service
• Sales assistance for problems or queries only
IDENTIFY AND ANALYSE LEVEL OF CUSTOMER SERVICE
• An opportunity to measure how your performance compares to
that of your competitors.
• Benchmarking anything, including your customer service support
teams, requires that you collect data on it.
REVIEW CUSTOMER SATISFACTION
• Customer service satisfaction refers to how satisfied customers
are with the levels of service you are providing.
• The level of this satisfaction can be determined using several
methods, but the main objective in this method is to review the
information gathered.
EVALUATE EACH COMPONENT OF THE MARKETING MIX
1.6 Identify potential customer base and key pressure points for success
BUSINESS PROFILING WOULD LIKELY ADDRESS:• By identifying your business target market profile, its
demographics and its buying and spending habits, you will be able
to focus your marketing and advertising efforts more effectively.
• Be aware that in reviewing these profiles to describe the total
market and selected market segments you may likely identify
multiple potential markets for your product or service.
• Pinpointing the right market for you is essential in describing your
total market and then selected market segments.
CUSTOMER PROFILES
• These include demographics such as - age, income, gender,
ethnicity, education level, Psychographics (personality and
lifestyle) etc, but they may also exist within “clusters”.
• Some “clusters” are industry based which may identify interests,
lifestyles, purchasing behaviour, attitudes and more.
INDIVIDUAL CONSUMER CHARACTERISTICS
• Demographics: Age, gender, income etc.
• Psychographics: Personality and Lifestyle
• Consumer segments separated on the basis of
Demographics/Psychographics often differ in their consumer
behaviour
WHAT DO YOUR CUSTOMER PRESSURE POINTS LOOK LIKE?
• Available funding
• Influence by their senior or key decision makers
• Uncertainty? What happens after the decision to buy is made
• Uncertainty of making a bad decision
• Other external influences
• Personal restrictions
• Lack of vision
EVALUATE EACH COMPONENT OF THE MARKETING MIX
1.7 Analyse and test the effect of the components of marketing mix on each other, and establish their relative importance to customer base
MARKETING MIX MAY INCLUDE:
• Customer service variables
• Distribution variables
• Pricing variables
• Product or service variables
• Promotional variables
THE 4PS
• Product (or service)
• Place
• Price
• Promotion
LAUTERBORN'S 4CS
Another option in the marketing mix choice is the 4Cs which presents
the elements of the marketing mix from your customer’s perspective.
It refers to the needs of the customer including the:
• Customer needs and wants, which is related to products
• Cost or price points
• Convenience, which relates to place
• Communication or promotion
DETERMINE MARKETING MIX FOR SPECIFIC MARKETS
2.1 Identify and assess environmental factors for their impact on marketing mix
WHAT ARE ENVIRONMENTAL FACTORS AFFECTING THE MARKETING FUNCTION?
To further identify environmental factors, it is useful to divide
them into two categories:
• Internal environment
• External environment
THE MOST COMMON INTERNAL FACTORS AFFECTING THE MARKETING
• Senior levels of management
• The Structure of Boards
• The culture of the organisation
• The degree by which employees support management
• Amount of support given by shareholders or stakeholders in the
organisation
INTERNAL ENVIRONMENT FACTORS INCLUDE FINANCE AND ACCOUNTING
• The amounts of budget allocation to marketing
• The methods by which the revenues and costs of marketing are
perceived
• The marketing plan
• Polices
• Liquidity of the organisation
• Asset and capital structure
COMPANY IMAGE AND ACCEPTANCE IN THE MARKETPLACE
• Brand
• Acceptance and ability to say, raise finances
• Partnerships or equity positions
• Sales contracts
• Launching new products
• Marketing resources
EXTERNAL FACTORS ARE OFTEN GOVERNED BY YOUR ORGANISATION’S ABILITY TO:
• Exert sufficient bargaining power
• Address any monopoly environment situations by suppliers
• Address properly the options of substitute products
• The threat of goods or services not being available at all
COMPETITORS
• Do they share the same market?
• Do they only represent a small percentage?
• Do they have similar goods and services?
• Are they more price competitive or just discounters?
• Are they competing on product or service differentiation?
FACTORS AND FORCES
• Social and cultural factors
• Economic factors
• Political and legal external environmental forces
• Physical Forces
DETERMINE MARKETING MIX FOR SPECIFIC MARKETS
2.2 Identify consumer priorities, needs and preferences that affect marketing mix
CUSTOMER PRIORITIES, NEEDS AND PREFERENCES MAY INCLUDE:
• Required or preferred products/services
• Preferred price point
• Preferred purchase volume in units and in dollars
• Preferred method of payment
• Preferred time and place for responding
• Preferred time and place to take delivery
• Preferred medium to respond to direct response
offers
DETERMINE MARKETING MIX FOR SPECIFIC MARKETS
2.3 Consider product, pricing, promotional, distribution and service variations, and evaluate these against marketing objectives, target market characteristics and desired positioning
HAVE YOU A CURRENT MARKETING PLAN THAT YOU CAN REFERENCE?
• Marketing objectives
• Target market characteristics
• Desired positioning
• Marketing mix
MARKETING OBJECTIVES
• Do you know how your marketing objectives are going?
• Do you know how they are going to be achieved?
CONSIDER A SWOT ANALYSIS
• Identify the key opportunities and threats with pricing, promotion,
distribution and service variations within your marketing plan.
• Evaluate these against existing and future marketing objectives.
• Establish your desired positioning and importantly the areas you
want to work on.
• Remember to include a description of what success will look like,
and add some of your enthusiasm and passion here too.
DETERMINE MARKETING MIX FOR SPECIFIC MARKETS
2.4 Select marketing mix that best satisfies target market and meets marketing objectives
SELECTING A MARKETING MIX
• Making an informed decision involves presenting your findings as
either a business or marketing case and possibly detailing the
reasons why or why not.
• It involves considering each and every factor involved with your
previous assessments and understanding of the marketing plan.
• It also involves comparing the benefits that will be generated
through your decision and the costs that your business will incur.
DETERMINE MARKETING MIX FOR SPECIFIC MARKETS
2.5 Ensure marketing mix decision meets organisational, strategic and operational marketing objectives
MONITOR AND ADJUST MARKETING MIX
3.1 Monitor marketing mix against marketing performance and isolate components for testing3.2 Evaluate implications of altering one or more components of marketing mix in relation to market factors and consumer response 3.3 Adjust components of marketing mix in response to test results and evaluation of market response 3.4 Ensure adjusted marketing mix meets budgetary requirements 3.5 Ensure adjusted marketing mix continues to meet organisational, strategic and operational marketing objectives, and desired positioning
WHEN DO YOU MONITOR YOUR MARKETING MIX?
• From the outset
• After a reasonable time, e.g. months
• As a result of a financial report
• Other?
EXAMPLES
• You will need to make adjustments to your selected marketing mix
if it is perceived as being outdated or costs are escalating beyond
the budget.
• This analysis and corrective action may mean revaluating those
engaged with the marketing (both internal and external) to find
improvements or strategy correction.
• The marketing process.
CUSTOMER RESEARCH
• Research of customers’ needs and expectations to identify any
opportunities for change
• Make informed assessments for possible changes in your market
• Do you need to look at new opportunities?
• Should you and the marketing team further develop current or
new strategies?
CONGRATULATIONS!
You have now finished the unit…
BSBMKG502B
‘Establish and adjust the marketing mix’