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MARKET ANALYSIS
The 4 P’s of Marketing
The Importance of a Marketing Mix
If an organization is to be successful with a new product, they must consider a variety of variables
Truly successful companies/products ensure that they cover all the areas that are important, just doing one well will not be good enough
Having a great priced product but always out of stock
Covering all the areas is known as the marketing mix
The 4 P’s of the Marketing Mix
The marketing mix is usually divided into 4 major categories
These 4 categories are known as the 4 P’s
Product Price Place Promotion
Real World Example
The marketing failure example we will look at using the marketing mix is McDonald’s McPizza
Although it lasted several years, it was not profitable for McDonalds and was eventually dropped from the menu
Many people wonder why, as they enjoyed these mini-pizzas. We will discover why!
Product Mix
Includes research, product development, packaging, and branding
Branding For the McDonalds pizza, it was given the “Mc”
prefix They had had success with McChicken and Egg
McMuffin, other non burger items Problem started as customers associated
McDonalds with burgers, not pizza Began to blur the company’s identity
Product Mix
Packaging Packaging was a miniature pizza box, protecting the
pizza and establishing the pizza look for the customerResearch
Research showed that pizza was their biggest competitor
Developed technology to create pizza relatively quick (match fast food)
Test markets liked the taste
Promotion Mix
Consists of advertising, sales promotion, and publicity Magazines, TV, and newspaper articles covered
the launch Media gave owners opportunity to explain the
change and reassure customers that they still did hamburgers
TV ads explained the new ovens and attempted to generate excitement
Promotion included free samples, launch parties and store banners and signage
Pricing Mix
Pricing seemed accurate for McDonalds Consumer could buy a
small pizza for same as burger and fries
Large pizza priced competitively with Pizza Hut and Dominoes
Marketing team thought that they could make back the extremely high start-up costs in a couple years but sales slowed
Place Mix
Includes physical distribution, storage, inventory management, and channel selection
This is where the largest problems with the McPizza occurred
Place Mix
Space behind counter is small, area is designed for efficiency with machines close together
Hard to find room for new pizza ovens and ingredients
Employees were trained in the use of the ovens, the pizza prep, and pizza sales with goal of maintaining high customer service
Place Mix
McDonalds had spent $ Billions convincing customers it was a fast-service hamburger place Customers in drive-thru lines were asked to park
for 10 min for pizza If mixed order, hamburger and fries were cold by
the time the pizza came Large pizza box wouldn’t fit through the drive-
thru window, so had to be hand delivered by employees
Pizza tended to be a product that customers developed loyalties too (specific restaurant)
McDonalds Now
McDonalds continues to adjust its marketing mix Local stores are encouraged to develop products for local
markets McBrat (bratwurst with sauerkraut and onion) is popular in
Wisc. and Minn. McLobster popular in tourist season in Atlantic Canada New healthy choices menu following recent trends