Marketing Mix

• A set of controllable factors used by companies to influence customer decisions and achieve marketing objectives.

Product

• Goods and services offered in comparison to competitors.
  • Design, features, quality, packaging.
  • Service quality (if applicable).
  • Brand identity (name, logo, design).

Types of Products

• Consumer Goods: Tangible products for personal use.
• Consumer Services: Services for personal use.
• Producer Goods: Goods for business use (e.g., machinery).
• Producer Services: Services for business use.

Product Requirements

1. Satisfy consumer wants and needs.
2. Maintain quality to justify the price.
3. Production costs should be less than the selling price.
4. Align design with brand image.

Market Oriented vs. Product Oriented

• Product Oriented: Consistent product with other changing factors.
• Market Oriented: Product changes based on market demands.

Costs and Benefits of New Product Development

Benefits

1. Unique selling point.
2. Business diversification.
3. Market expansion.
4. Introduction to existing markets.

Drawbacks

1. High research and development costs.
2. Production trial costs.
3. Risk of wrong target market.
4. Potential loss of brand image.

Importance of Brand Image

• Brand Name: Facilitates advertising and consumer recall.
• Brand Loyalty: Encourages repeat purchases.
• Brand Image: Consumer perception of the product.

Role of Packaging

• Protection and promotion of the product.
• Functions include information provision, consumer recognition, freshness maintenance, and reusability.

Product Life Cycle

1. Introduction Stage: Initial market entry, high advertising costs.
2. Growth Stage: Increased sales and profits.
3. Maturity Stage: Stable sales, maximum profitability.
4. Decline Stage: Decreasing sales, withdrawal from the market.

Extending the Product Life Cycle

• New markets, variations, adaptations, advertising, and uses.

Pricing Decisions in Marketing Mix

• Prices should align with brand image and competitor pricing.

Pricing Strategies

• Distinct Product: Branding and appropriate pricing.
• Value for Money: Usually lower-priced.
• Highly Competitive: Pricing becomes crucial.

Adapting Pricing Strategies

1. Entering new markets.
2. Increasing market share and profits.
3. Covering costs and achieving target profits.

Main Methods of Pricing

• Cost-Plus Pricing: Total cost plus a profit margin.
• Markup Pricing: Cost plus a markup percentage.
• Full Cost Pricing: Includes all costs with a profit margin.
• Competitive Pricing: Aligns with competitor prices.

Special Pricing Strategies

• Penetration Pricing: Low initial prices to attract consumers.
• Price Skimming: High initial prices for unique products.
• Promotional Pricing: Temporary price reductions.

Price Elasticity of Demand (PED)

• Determines how demand changes with price alterations.

Effects on Revenue

• Elastic Demand: Lower prices increase revenue.
• Inelastic Demand: Higher prices increase revenue.

Dynamic Pricing

• Prices fluctuate based on demand throughout the day.

Role of Place Decisions

• Distribution Channels: Direct and indirect sales paths.
• Distribution Types:
  1. Producer to Consumer
  2. Producer to Retailer to Consumer
  3. Producer to Wholesaler to Retailer to Consumer
  4. Producer to Agent to Wholesaler to Retailer to Consumer

Importance of Promotion

• Provides consumer information and influences sales.

Methods of Promotion

• Advertising (Above the Line): Media-based, paid promotions.
• Sales Promotion (Below the Line): Discounts and direct offers.

Aims of Promotion

1. Inform consumers.
2. Introduce new products.
3. Compete with rivals.
4. Create a brand image.
5. Boost sales.
6. Enhance company image.

E-commerce Impact

On Businesses

• Opportunities: Global reach, low-cost promotion.
• Threats: Setup costs, competition, lack of direct contact.

On Consumers

• Opportunities: Convenience, easy comparison, competitive pricing.
• Threats: Identity theft, technical issues.

E-commerce Advertising

• Social Media: Cost-effective targeting but risks alienating customers.