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Marketing Mix

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Marketing mix

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It is sole vehicle for creating and delivering value.

Consists of four elementsMarketing mix enhances positioning and

differentiating strategiesFour elements of marketing mix are 1.Product 2.Price3.Promotion4.Place

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Marketing Mix

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Marketing mix

Product Product varietyQualityDesignFeaturesBrand namePackagingSizesServicesWarranties

Price List priceDiscountsAllowancesPayment periodCredit terms

PromotionSales promotionAdvertisingSales forcePublic relationsDirect marketing

DistributionChannelsCoverageAssortmentsLocationsInventory Transport

Target market

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Product

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The major component of marketing mix Includes decision making on Product design, features, brand name, models,

styles, appearanceProduct qualityPackage: design type, material, size

appearance and labelingServices: pre-sale and after-sale, service

standards, service charges.

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Definition

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Product is anything that can be offered to a market to satisfy a want or a need.

These include physical goods, services, experiences, events, persons, places, properties, organisations, information and ideas.

Product time to time gain identity and personality of its own.

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Components of Product Personality

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The core or the basic constituent The associated features the brand name and logoThe package and label

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Product levels: Customer Value Hierarchy

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Core benefit

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Basic product

Expected product

Augmented product

Potential product

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Product classification

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Product classification on the basis of durability and tangibility

1.Non durable goods- these goods are tangible and normally consumed in one or few uses.

For e.g. soft drinks2.Durable goods- these goods are tangible but

survive many uses.For e.g. refrigerators, automobiles3.Services- intangible, inseparable, variable and

perishableFor e.g. haircut, legal adviceVARUN KALSE

Product classification

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Consumer good classification on the basis of shopping habits

1.Convenience goods- frequently and immediately bought with minimum effort

For e.g. soap, toothpaste, ketchup etc.2.Impulse goods- purchased without planning or

search effort.For e.g. ice-cream, soft drinks3. Emergency goods- purchased when need is

urgent For e.g. umbrella, insecticide spray

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Product classification

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Consumer good classification on the basis of shopping habits

4.Shopping goods- consumer uses the process of selection, characteristically compares on the suitability, quality, price and style.

For e.g. furniture, home appliances5.Specialty goods- have unique

characteristics or brand identification for which a sufficient number of buyers are willing to make a special purchasing effort.

For e.g. Mercedes Benz, Rolls RoyceVARUN KALSE

Product Classification

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Consumer good classification on the basis of shopping habits

6. Unsought goods- those products which either consumer does not know about or does not normally think of buying

For e.g. encyclopedias, insurance policies

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Product classification

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Industrial goods classification-1.Raw material- further classified into farm

products and natural productsFarm products- include products like wheat,

corm livestock, fruits, vegetable etc .These products are supplied by many producers,

who turn them over to marketing intermediaries

For e.g. dairy products like milk, curd, cheese etc.

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Product classification

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Industrial goods-Raw materialNatural products- these products include iron

ore, fish crude petroleum, etc.These products are limited in supply, and since

the users usually are dependent upon such products long term contracts happen.

By large the prices are regulated by the government.

For e.g. natural salt

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Product Classification

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• Industrial goods- 2.Manufactured materials and parts- further

classified into component materials and component parts.

Component materials- these products are once processed from mostly natural products and are further required for processing for final goods

Price, quality and reliability of the suppliers are the key factors.

For e.g. iron, yarn, wires etc..

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Product Classification

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• Industrial goods- manufactured materials and parts

Component parts- these products directly enter the finished products with no further change in form.

These products are usually directly sold to the industry user without any in intermediaries.

For e.g. motors in vacuum cleaner, nuts and bolts and tyres in automobile.

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Product Classification

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• Industrial goods classification3. Capital items- these products are long

lasting that facilitate developing or managing the finished product. These are further classified into installations and equipment.

Installations are major purchases and require long negotiation period before decision making.

For e.g. factories, offices, generators, elevators

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Product ClassificationIndustrial goods classification Equipment comprises portable factory

equipment and tools as well as office equipment.

These goods just facilitate or help in production of finished products.

For e.g. desk, PCs, coffee machine etc.

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Product- the first P of marketing mixThe differentiation strategy starts with

product. The differentiation can be done in various ways.

Form- most of the products are differentiated in form.

Form relates to the size, shape or physical structure.

For e.g. parachute name is synonymous with coconut oil. But the brand differentiates itself by the unique shape and different sizes of product and unique locking system of the bottle.

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Product Features- products can be offered in varying

features that supplements its basic function.Usually the features should be such that the

competitors will not be able to imitate or match with it.

For e.g. LG offers unique feature of Golden eye in its television for better visibility.

Performance quality-it is the level at which the product’s primary characteristics operate.

The organization should design a performance level which is appropriate to the target audience and competitors’ performance level.

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Product Conformance quality- degree to which all the

produced unit are identical and meet the promised specifications.

Buyers expect the product to have high conformance quality.

For e.g. Honda Activa, it is designed has conformance quality to accelerate to 40 kmph within 6 sec.

Durability-a measure of the product’s expected operating life under natural or stressful conditions.

Buyers generally pay more for products which have reputation for being long lasting.

For e.g. NOKIA cell phones.

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Product Reliability – it is the measure of the probability that

a product will not malfunction or fail within a specified time period.

Reliability is the major factor which helps in building a positive brand image.

For e.g. NOKIA, CEATReparability- it is the measure of the ease of fixing a

product when it malfunctions or fails. Ideal reparability would be when user could fix the

product themselves.For e.g CISCO who maintains a big list of FAQs for its

consumers so that they can repair the hardware by themselves. Every day a new query comes then it is added as FAQ in the website which helps co save $240 million on services.21 VARUN KALSE

Product Style- it describes the product looks and feel

to the buyer.Aesthetics play a key role in building a brand

image as well as differentiating the product from the market.

Style has the advantage of creating distinctiveness that is difficult to copy.

For e.g. Harley Davidson, Apple ComputersDESIGN- design is the totality of features that

effect how a product looks and functions in terms of customer requiremments.

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Product- service differentiation When physical product cannot be easily

differentiated then the key to competitive success may lie in adding value services and improving service quality.

The main service differentiators are:Ordering ease- refers to how easy it is for the

customers to place an order with the company. The ease of ordering helps organization in identifying

lateral needs of the customers.For e.g. Wockhardt has made tie up with Apollo

pharmacy shops for stocking and delivering the sugar testing stripes for the diabetic patients, now customers just need to call the pharmacy and order the stripes which are delivered at home

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Product- service differentiationDelivery – refers to how well the product or

service is delivered to the customer.It also includes speed, accuracy and care attending

the delivery process.For e.g. Domino pizza promises to deliver the pizza

in 30 minutes other wise the pizza is free for the customer.

Installation – refers to work done to make a product operational its planned location.

Differentiating at this point in the consumption chain is particularly important for the companies with complex products.

For e.g. Tata sky installation are done by the trained staff within a day of purchase of the services

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Product- service differentiationCustomer training- refers to training the customers to

use the equipment properly and efficiently.This particular aspect especially is for industrial goods

but it is more or less applicable to customer goods also.

For e.g. demo of how to use microwave,Training certain employees in an organization on how

to use the elevators.Customer consulting- refers to data, information

system and advice services that the sellers offers to buyers.

for e.g. Share khan provides online services as well as send sms to the customers who register themselves for stock market advice

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Packaging All the activities of designing and producing a

container for a product. There are three levels of packaging Primary package- the container containing the

productSecondary package- the cardboard or the paper

coverShipping package- usually used for

transportation of goods from one place to another.

Packaging depends on the kind of product and the durability of the product.

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Packaging as a marketing toolPackaging helps differentiate the product.the various reason behind using packaging as

a differentiating tools are:Self service- earlier Indian consumers

depended on small retailers who bought the product from the wholesalers in bulk and them further use to give customer a loose pack as the retailer used to get a single bulk packing.

With shift in consumer preferences and behavior towards owning a personal but sealed pack has made the difference.

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Packaging as a marketing toolConsumer affluence- consumer are willing

to pay a little more for the convenience, appearance, dependability and prestige of better packages.

Company and brand images- package contributes to instant recognition of the company or the brand.

Innovation opportunity-

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Packaging as a marketing toolEffective packaging must achieve a number

of objectives like:1.Identify the brand2.Convey descriptive and persuasive

information.3.Facilitate product transportation and

protection.4.Assist at-home storage5.Aid product consumption

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Labeling, warranties and guarantees

Label identifies, grades, describes and promote the product.

Warranties are formal statements of expected product performance by producer.

Products under warranty can be returned to the manufacturer or designated repair center for repair, replacement or refund.

Guarantees reduce the customers’ perceived risk. Guarantees suggests that the products are of high quality and that the company and its service performance are dependable.

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Product life cycleA company’s positioning and differntiation

strategy must change as the product, market, market demand and competitors change.

These changes occur because product also has a life cycle which asserts following points:

1.Products have limited life.2.Product sales pass through distinct stages, each

posing different challenges, opportunities and problems to the sellers.

3.Profits rise and fall at different stages of life cycle.4.Products require different strategies in each life

cycle stage.

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Product life cycle

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INTRODUCTION

GROWTH

MATURITY DECLINE

SALES &PROFIT

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Product life cycle-introduction stage Introduction – the stage where the product is

introduced into the market. In this stage the organization uses heavy

promotions to position the product in the minds of target market.

The sales growth is slow and profits are non existent because of the heavy expenses of product introduction.

Sales growth is also slow because it takes time to roll out the product, workout the technical problems, complete the supply chain and gain consumer acceptance.

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Product life cycle-introduction stage Promotional expenditure are at their highest

ratio to sales because of the need to1.Inform potential customers2.Induce product trial3.Secure distribution in retail outletsCompanies must plan when to enter the market.Usually it is feasible to enter early and be the

first to enter the market as early pioneers like coca cola and amazon.com have got the advantage of positive and strong positioning in the target consumer’s mind.

Prices are initially high to encounter the cost34 VARUN KALSE

Product life cycle-introduction stage Early pioneers have risk as well as more

expenses to deal with.Another strategy is to enter late into the

market only when, when the organization can bring superior technology, quality and brand strength.

The product should be introduced in one segment rather than targeting all the segments at once.

This reduces the risk of “not meeting to the customer expectation”

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Product life cycle- growth stage Growth - this stage is of rapid growth in terms

of sales of the product and profit.Early adopters like the product and additional

potential customer start buying the product.New competition enters the market looking into

the market growth of the existing company.Prices either remain same all they fall slightly.Promotional expenditures are high but now the

target is to counter the competition.As the sales rise so the sales- promotion ratio

reduces

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Product life cycle- maturity stage Maturity stage- it is the stage where the sales

growth slow down.The product moves to the stage of relative

maturity.The maturity stage is divided in to three stages:1.Growth- the sales start to decline. There are no

new distribution channel to fill2.Stable- sales flatten on per capita basis because

of market saturation.3.Decaying maturity- the absolute level of sales

start to decline and customers begin to switch to another product.

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Product life cycle- decline stage

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