Marketing Mix- FOUR P’S

Marketing Mix
four p’s essential to the success of a marketing plan for either a product or a service
Product
Refers to the benefits of buying a product
Quality, Features, Design, Packaging
Product
Price
establishing the price of their service/product
Markup Price
How much profit do you want to make on every product/customer
Competition, Penetration, Bundle, Psychological
Price
Place
refers to how & where you are going to sell the product to the consumer
Direct Distribution
selling your product directly to the consumer
Indirect Distribution
sold through a 3rd party
Promotion
communicating benefits of a product or service to a target market
Public Relations, Advertising, Sales, Buzz
Promotion
MIM
Marketing Information Management
· Provide info in a useful format for business decisions (Ex: customer survey)
PSM
Product/Service Management
· Making products/services available to meet wants/needs of customers
Pricing
· Purpose: to make profits
Distribution
· Availability, Transportation, Inventory Methods
Promotion
* Communicate info about products/services to potential customers
Selling
* Finalizing the exchange process with the customer by selling products/services & developing loyal, repeat customers
Financing
* Manage cash needs on daily basis/future
Mission Statement
Guiding principle for all decision/planning.
Goal
Objective you plan to fulfill.
Strategy
Plan of action for achieving goal.
Tactics
Specific actions used to carry out strategies.
Market
group of all potential customers who have similar needs and wants and have the ability to buy the product.
Market Share
percentage of the total sales revenue acquired by a business within a market.
Mass Marketing
single marketing plan used to reach all consumers
Niche Marketing
Narrowing markets, by identifying very specific characteristics, into a more specific group of people
Direct Distribution
is when a product/service goes from the manufacturer (wholesaler) directly to the consumer.
Indirect distribution
is when a product/service goes through an intermediary or middlemen.
Agents
do not take ownership but instead represent a business and assist in the sales transaction. Real Estate Agents, Travel Agents, Sports Agents
Market Segmentation
Dividing the entire market into smaller groups who share similar characteristics
Demographic
Dividing the market based on personal characteristics such as age, gender, marital status, income, ethnic background, education, and occupation
Psychographic
Dividing the market based on values (ethics, morals, standards), attitudes (personality), and lifestyles (how people spend their time, hobbies, interests)
Behavioral
Dividing the market into groups based on what they are looking for in a product and why they buy the product
Geographic
Dividing a market based on where a person lives (local, regional, state, national, or global markets).
Marketing Research
Reports from research firms, surveys, observations, test markets, and simulations
Selling
Responding to consumer needs and wants through planned, personalized communication.
Tangible
are those items that can be touched, smelled, tasted, seen or heard.
Intangible
are productive activities that we pay someone else to perform
Customer service
a process rather than a function or a department.
Personal Selling
Determine what is of value to the customer and what they need help with.
Suggesting selling
Suggesting additional products/services that will enhance his/her primary purchase
Cross selling
Related merchandise
* Buying sneakers, suggest socks
Upselling
larger quantities at lower prices
* Buying a Big Mac only, suggest a Value Meal
* Special sales opportunities – inform about any sales
* Buying pants, mention sale on shoes.
Special sales opportunities
inform about any sales
* Buying pants, mention sale on shoes.
32. Post-Sale Customer Service
* It is the salespersons responsibility to ensure customer’s orders are processed correctly
Shipping and delivery
* Can be a major source of frustration for customers
* Items arriving too early or too late, get lost/damaged
Installation
Salespeople need to stay involved to reduce frustration and minimize problems
Warranty issues
Successful salespeople take responsibility to make sure customers understand exactly what their warranties cover.
Maintenance and repair
Certain products need routine service and may also need specialized repairs over time
May be offered as part of overall sales package
Successful salespeople make sure their customers understand
Credit/Financing
Problems with obtaining credit and financing are a main cause of customer-service complaints for sales organizations.
Customer Training
Some products require customer training, even classes
Customer Service Mindset
o A clear focus on the customer
o Makes customer feel special
o Satisfies customer
Business policy
predetermined course of action which is established to provide a guide toward accepted business strategies and objectives.
Trading Down
Adding lower priced items to a product line of prestige products
Trading Up
Adding higher priced items to a product line
Express Warranty
Defined as promises expressed in a specific statement concerning the quality of the product
Implied Warranty
Defined as an unwritten, unstated warranty understood by the consumer and the seller that a product will perform as expected
Full Warranty
Cover entire product
Limited Warranty
do not contain the provisions of full warranties, may cover only certain repairs or specific parts
Guarantee
a promise made by the seller to the consumer that the seller will refund the consumer’s purchase price if the product doesn’t perform as expected.
Product Liability
is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause.
Product Recall
is a request to return to the maker a batch or an entire production run of a product, usually due to the discovery of safety issues. The recall is an effort to limit liability (which can cause costly legal penalties and damage in reputation)
A Corporate image
is the perception that the general public holds about a particular business.
Touch Points
are all the opportunities that businesses have to connect with customers and reinforce brand value
Product Knowledge
Must have adequate knowledge of the products features & benefits to be able to explain how they will fulfill the customer’s wants and needs.
Feature
is a physical characteristic or quality of a product.
Benefit
is the personal satisfaction or advantage that a customer wants from a product.
Merchandise approach
– Approach customer while they are looking at a product
Service approach
Approach customer and ask them questions about what they are looking for.
Purchase Discount
set amount of money that a business saves on a specific order if the payment is made within a certain period of time.
Bulk Discounts
purchasing a large quantity and getting a discount on the price
Product Life Cycle
Represents the stages that a product goes through during its life.
Planned Obsolescence
Making products that are known to not last long, or change, so that people will need to replace them
Competitive advantage
Unique features of a company and its products that are observed by the target market as significant and superior to the competition.
Positioning
developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line or organization in general
Attribute
Product Feature
Price and Quality
May stress high price as a sign of quality, or emphasize low price as an indication of value.
Use or application
Stressing unique uses or applications.
Product User
Associating a personality or type of user with the product.
Product Classification
Associate the product with a particular category of products.
Competitor
Demonstrate how they are positioned against the competitors that hold a strong market position.
Recognition
* When consumers become aware of a brand and know a bit about it
Preference
* When consumers prefer to purchase a certain product brand based on their positive experience with the brand.
Insistence
* When the consumer insists on “their” brand and will not accept substitutes.
Generic
* Unbranded products that are plainly packaged, have lower or standard quality, are sold at lower prices than branded products, and receive little or no promotion.
National Manufacture
The manufacturer has assumed all responsibility of branding (logo, slogan, name, etc.)
Private Distributer
* A brand owned by an intermediary or store.
* Examples — Radio Shack batteries & Great Value Macaroni & Cheese.
Brand Positioning
The way consumers see the brand, as compared to a competitive brand.
Brand Extensions
* When a brand name is used for a new or improved product line.
Brand Licensing
* Allows one company to use another’s brand name, logo, or character for a fee.
Co-Branding
Companies join forces to increase recognition, customer loyalty, and sales of both brands.
Family Branding
Involves using the same brand for related products in a product line.
Individual Branding
* Involves using different brands for products owned by one company.
Brand Identity
elements that are instantly recognized as belonging to a certain company or product
Band cues
elements that remind customers of brands and their values
Brand Personality
the behavior of your brand — creates and maintains an emotional connection with customers (people buy what they relate to)
* Excitement, Sincerity, Ruggedness, Competence, Sophistication)
Brand Promise
agreement that a company or product will consistently meet expectations and deliver on characteristics and value
Corporate Brand
represents the entire company or organization
Distributer Brand
private or store brands
Anti-Dumping Laws
punish foreign producers for offering their products to domestic consumers at low prices.
Bait and Switch
First, customers are “baited” by advertising for a product or service at a low price; second, the customers discover that the advertised good is not available or the sales person disparages the advertised item and customers are “switched” to a costlier product.
Loss Leader
– a product sold at a low price (at cost or below cost) to stimulate other profitable sales.
Deceptive Pricing
False/Deceptive Advertising
Predatory Pricing
is the practice of selling a product/service at a very low price, intending to drive competitors out of the market
Price Fixing
is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold, price fixing is illegal.
Channels
A path through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them that flow in the opposite direction (from consumer to the vendor).
Channel Length
is the total number of channel members in a channel of distribution
Channel Members
are business or individuals who assist in moving goods and services from the producer to the consumer
Exclusive
a producer sells a product through just one middle man (intermediary) in a geographic area
Selective
– a producer sells a product through a limited number of middlemen in a geographic area
Intensive
– a producer sells a product through every available wholesaler and retailer in a geographic area
Chargebacks
financial penalties assessed for a variety of problems
Horizontal Conflict
occurs between channel members at the same level
Vertical conflict
occurs between channel members at different levels within the same channel
Perfect competition
-Many buyers and many sellers all dealing in an identical product. Neither producer nor user has any market power and both must accept the prevailing market price.
Monopoly
-One seller who dominates many buyers.
Monopolistic competition
-A large number of suppliers offer similar, but not identical products.
Oligopoly
Where relatively few competitive companies dominate the market while each large firm has the ability to influence market prices the unpredictable reaction from the other giants makes the final industry price in determinate.
Price Fixing
is collaborating with other companies (competitors) to set prices for a company’s products, price fixing is illegal.
Predatory Pricing
is the practice of selling a product or service at a very low price, intending to drive competitors out of the market
Institutional Promotion
used to create a favorable image for itself. Does not directly sell a certain product.
Advertising
any paid form of non-personal presentation and promotion by an identified sponsor.
Publicity
placing newsworthy information about a company, product, or person in the media to build an image.