Marketing mix

Marketing mix - elements

4 „P“4 „C“

4 „S“

7 „P“

Product Price Promotion Place

People Process Physical evidence

Purpose Purchaser Push/pull

Personal relationships Positioning

Packaging Persuasion Performance

Profitable Proactive

Pull together Perform Permission Pain

Pleasure Periodic Persistent

Partners Psychology Perceptions

• product = consumer desire

• price = cost

• place = convenience

• promotion = communication

Marketing mix - elements

4 C‘s

5. Product

5. Product

5.1 Definition, levels, classification

5.2 Individual product decisions

5.3 Product line, product mix

5.4 Product life cycle

5.5 Innovation and new product development

1. Definition, levels, classification

Levels

Core

benefit or

service

Brand

name

Features

Quality/

Duralibity

Desing/

Styling

Packaging

Capabilites

Warranty

Delivery

and credit

Personnel

Installation

After sales

support

Customer

serviceCore product

Actual product

Augmented product

TASK: Complete the table below by filling in the blank spaces. All

companies have a CORE, ACTUAL and AUGMENTED product or service.

Product or service

or brandCore Product Actual Product

Augmented

Product

Ford Focus A motor car

Spanish Holiday Relaxation

Budget/No Frills

Airline e.g. EasyJet

Food bought during

your flight

Chelsea Football

Club

Excitement and

leisureSporting event

Nike

Nike online allows

you to personalise

your trainers

Sony camcorder Extended warranty

Product classification• durability

• tangibility

• type of consumer - consumer vs. industrial products

Consumer products

Convenience Shopping Speciality Unsought

Customer

buying

behaviour

Frequent purchase,

little planning, little

comparison or

shopping effort, low

customer

involvement

Less frequent

purchase, much

planning and

shopping effort,

comparison of

brands on price,

quality, style

Strong brand

preference and

loyalty, special

purchase effort, little

comparison of

brands, low price

sensitivity

Little product

awareness,

knowledge

Price low higher high varies

DistributionWidespread,

convenient locations

Selective, in fewer

outlets

Exclusive in only one

or a few outlets

varies

Promotion

Mass promotion by

the producer

Advertising and

personal selling by

producer and

resellers

More carefully

targeted promotion

by producer and

resellers

Aggresive

advertising and

personal selling by

producer and

resellers

Examples

Toothpaste,

magazines, laundry

detergent

Major appliances,

televisions, furniture,

clothing

Luxury goods (Rolex

watches)

Life insurance, red

cross blood

donations

Industrial goods

Industrial goods

Materials and parts Capital items Supplies and services

Raw materials

Manufactured materials

and parts

Installations

Accessory equipment

Supplies

Business services

2. Individual product decisions• Product attributes

- quality

- features

- design

• Branding

- brand

2. Individual product decisions• Product attributes

- quality

- features

- design

• Branding

- brand

- brand equity

Top 100 global brands (2012)

www.interbrand.com

2. Individual product decisions

• Product attributes

- quality

- features

- design

• Branding

- brand

- brand equity

- brand name selection:

product‘s benefits

easy to pronounce

distinctive

easy to translate

registration/protection

•

Translation - easy and meaningful„Ma-ku-do-na-ru-do" = "McDonald‘s"

Registration, protection

• Packaging

• Labelling

• Product-support services

2. Individual product decisions

3. Product line, product mix

product line =

product mix =

Product mix and product line for selected P&G products

Product mix width

Detergents Toothpaste Soap Shampoo

Product line

length

Tide

Dreft

Bold

Ariel

Bonux

Mr. Proper

Oral B

Fixodent

Crest

Camay

Ivory

Herbal

Essences

Head&

Shoulders

Wash& Go

Herbal

Essences

Pantene

Wella

Task: Complete the table for Nike.

Product mix width

Product line

length

4. Product life cycle

4. Product life cycle

4. Product life cycle

Introduction Growth Maturity Decline

Sales low rapidly rising peak declining

Costs per

customer

high average low low

Profits negative rising high declining

Customers innovators early adopters middle majority laggards

Competitors few growing number stable number beginning

to decline

declining number

Mkg

objectives

create product

awareness and trial

maximize market share maximize profit while

defending market share

reduce expenditure and

milk the brand

Product basic product product extensions,

service, warranty

diversify brand and

models

phase out weak items

Price use cost-plus price to penetrate market price to match or beat

competitors

cut price

Distribution selective intensive more intensive go selective: phase out

unprofitable outlets

Advertising build product awareness

among early adopters

and dealers

build awareness and

interest in the mass

market

stress brand differences

and benefits

reduce to level needed to

retain hard-core loyals

Sales

promotion

use heavy sales

promotion to entice trial

reduce to take advantage

of heavy consumer

demand

increase to encourage

brand switching

reduce to minimal level

5. Innovation and new product development

- innovation vs. invention

- risks

- new product development process

Reasons for new products and services

Product

innovations0

0 replace

outdated products

0 generate

additional

demand

0 can enhance a

company‘s image

0 may lead to a

temporary monopoly

0 enhance dynamics

and boost

employee‘s motivation

0 help to exploit market niches

and to expand market shares

Selection process of innovations1919 fixed ideas

524 raw projects

369 board projects

176 launched products (100 %)

53 products (30 %) 124 flops (70 %)

(accepted from the market) (already retracted

from the market)

11 successes 17 mediocre 24 products

(6 %) products incurring a loss

(10 %) (14 %)

Product innovations: Hall of shame

Ford Edsel

New CokeMcDonald‘s –

Arch Deluxe

Crystal

PepsiEarring

Magic

Ken

Customers accept innovations the earlier0

1. the higher the relative customer benefit (e.g.

productivity, convenience, fun, image),

2. the higher the compatibility to existing problem

solutions, and the fit to existing life-style

3. the lower complexity and the higher the

understandability,

4. the lower the risk (e.g. expenses, trialability)

5. the easier it is to communicate the innovation and the

higher the availability

Diffusion of innovation