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The Marketing MixPart 1: Product, price and place

Marketing and Sales

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Extension activitiesTeacher’s notes included in the Notes Page

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Accompanying worksheet

For more detailed instructions, see the Getting Started presentation

Web addresses Printable activity PLTS

Learning objectives

Learn what the marketing mix is.

Be able to understand the different types of promotion and how they are used.

Understand how research and development leads to the accumulation of knowledge about customers, and ultimately to the creation of new products.

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The marketing mix is a set of decisions that a business has to make in order to successfully market a product. They must take into account how these decisions meet the needs of their customers. To do this, they analyse their market research.

A successful marketing mix will boost sales, create a brand identity and establish customer loyalty to the brand.

The components that make up the marketing mix are the 4 Ps:

Product

Place

Price

Promotion.

The marketing mix

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The 4 Ps

What happens if the wrong marketing mix is chosen?

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If the marketing mix for a new product is correct, sales should gradually increase.

Unless a business is continually expanding and developing its range of products, it cannot succeed.

Research and Development (R&D)

Product life cycle

However, after time, sales will begin to level and then decline.

This sequence of introduction, growth, maturity and decline is known as the product life cycle.

Can you describe it and give examples?

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Tesco

Purchases inside Tesco stores and on their website are processed electronically. The data from each purchase is stored in a database. The functional areas access that information and use it to perform their tasks and assess whether or not they are meeting their objectives.

How could Tesco’s other functional areas use the data from EPOS to perform their tasks?

The Marketing department, for example, builds up customer profiles. This helps them target the right market segments. Tesco’s loyalty card, ‘Clubcard’, has enabled it to construct the UK’s largest database.

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Product

The marketing mix is made up from the key ingredients required to make a good or service successful. Known as the 4 Ps, they are product, price, promotion and place.

Product: This refers to the good or service that a firm sells and its features, such as design, functions, colour, size etc.

Making products stand out from rivals’ products helps firms compete – this is product differentiation.

A good product is at the heart of a successful marketing mix – without it, sales will eventually fall.

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Price, place and promotion

Price: This needs to reflect the image of the product – whether it is a luxury or a budget product – but also offer the customer value for money.

Promotion: Its role is to inform customers about the product and its features in a way that persuades them to buy it. Promotional techniques include advertising, sales promotions, public relations and merchandising.

Place: This involves getting the product to the right customers when they need it via the correct distribution channels.

What is meant by an ‘integrated marketing mix’?

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Pricing strategies

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Place and distribution channels

A business needs to make decisions about where its products will be sold and how they will get to consumers.

Some service providers, such as restaurants and hairdressers, need direct contact with customers, making the choice of location important. However, the Internet has made location less important for some businesses.

Many manufacturers sell goods to customers via wholesalers and/or retailers. This can increase market coverage, but long distribution channels increase the price paid by the end consumer.

First Direct was the first UK bank to sell to customers by phone. How might this have

benefitted customers?