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marketing mix
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PowerPoint PresentationLecturer: Zhu Wenzhong
LEARNING GOALS
This topic will continue the discussion of marketing management
issues, especially marketing mix and product life cycle.
Explain the four elements of marketing mix.
State the difference between place and promotion.
Explain the stages of product life cycle.
Explain how a business can extend its product life.
State the reasons why a business may analyze its product life
cycle.
Copyright © 2002 by Harcourt, Inc. All rights reserved.
What is marketing mix?
Marketing mix refers to those four elements (product, price,
promotion, and place) of a firm’s marketing strategy which are
designed to meet the needs of customers. These are often known as
the four “Ps”.
Simply, to meet consumers’ needs, businesses must produce the right
product, at the right price, make it available at the right place,
and let consumers know about it through right promotion.
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Product:
Products must be ensured to meet the needs of customers in terms of
the following aspects:
Appearance
Function
Cost
Copyright © 2002 by Harcourt, Inc. All rights reserved.
Table 10-1 Features of a product to meet the needs of
customers
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The function
Able to be used Convenient for use Meeting special needs of
customers
The cost
Production costs must be low enough to earn some profit. High cost,
higher price. Too high price, customers unlikely to buy.
Copyright © 2002 by Harcourt, Inc. All rights reserved.
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Price:
The pricing policy that a business chooses is often a reflection of
the market at which it is aiming.
The right price set must take into account of production costs,
competitors’ prices and consumers’ purchase ability and demand
level.
Copyright © 2002 by Harcourt, Inc. All rights reserved.
Table 10-2 Influences from the pricing factors
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High production costs
High production costs would mean the high sale price for the goods
supplied by sellers.
High customer demand
High customer demand will lead to the increased price of the goods
or services. Suppliers are more wiling to provide the goods or
services as it is more profitable for them to supply.
Low prices charged by competitors
If the price of the substitute product offered by competitors
decreases, the demand for a product will be decreased as
well.
Copyright © 2002 by Harcourt, Inc. All rights reserved.
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-Marketing Mix: Price
Attention: High-price strategy
In general, from the economic point of view, the higher the price
of a product is, the less quantity demanded by consumers. Or there
are few buyers who would like to high-price products.
However, in practice, a business may charge a high price because it
is aiming to sell to those customers who regard its products as
unique and high quality although the production costs are not high.
For example, high pricing strategy is one of the marketing
strategies for China Haier.
Copyright © 2002 by Harcourt, Inc. All rights reserved.
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Definition:
Place refers to the means by which products can be distributed to
the consumers. The product must get to the right place at the right
time.
Decision making may be based on the following:
How the product is distributed physically, such as air, sea, rail,
or road.
How the product is sold, such as through retailers, wholesalers, or
direct mailing, etc.
Copyright © 2002 by Harcourt, Inc. All rights reserved.
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Definition:
Promotion refers to a number of promotional methods, such as
advertising, sales promotion, competitions, and personal selling,
etc.
A business must choose a method of promotion which is the most
effective in its particular market and for its own product. For
example, TV advertising may be better for the product with a high
sales turnover or a wide appeal. But for high-technology machines
or equipment, it is better to choose personal selling
methods.
Copyright © 2002 by Harcourt, Inc. All rights reserved.
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Question for your critical thinking:
Please guess what each of the four “Ps” on the side of business
represents on the side of customers (four “four Cs”) in the
marketing mix?
Copyright © 2002 by Harcourt, Inc. All rights reserved.
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Factors for making choices of marketing mix:
The type of product sold, e.g. for high tech.-equipment, the
business needs to emphasize the product and its quality rather than
promotion.
The market sold to, e.g. for consumer markets, promotion may be
emphasized.
The degree of competition, e.g. if the competition is high, price
is needed to be emphasized in order to gain some advantages in the
market.
The position of the business in the industry, e.g. if the business
is large or the market leader, it has more freedom to choose the
market mix.
The stage of product life cycle in which a product is, e.g. if the
product is in the stage of introduction, of course, promotion must
be emphasized...
Copyright © 2002 by Harcourt, Inc. All rights reserved.
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Definition:
Products pass through several stages of development in its life
from introduction to decline:
Stages of product life cycle usually include:
Development
Introduction
growth
Maturity
Saturation
Decline
Explanations:
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Development Introduction Growth Maturity Saturation Decline
Copyright © 2002 by Harcourt, Inc. All rights reserved.
Table 10-4 Explanations of the stages of Product life cycle
Stages
Development
The product is being designed. Suitable ideas are tested. Decision
is to be made whether or not to produce the product. If OK, the
business begins to produce.
Introduction
The product is new in the market. Sales are still low and
increasing. Promotion is needed to increase the sales and make it
aware widely. Product is still not profitable.
Growth
The product is established in the market. Sales begin to grow
rapidly. The product becomes very profitable. The business needs to
seek new opportunities and enlarge the market.
Maturity
The product has a stable market share. The growth levels off in the
sales. Sales have reached the top. Competitors have entered the
market. The business needs to consider new product development or
innovate the product.
Saturation
Too many competitors have entered the market. Some businesses are
forced out of their business. Businesses have to develop some
extension strategies to extend their product life cycle. For
example, find new uses of the product; finding new markets for the
product; changing components of the products, etc.
Decline
Sales decline. Consumers have changed their taste or styles. New
products have to be produced by competitors Businesses have to
develop new products or improve the old product with new technology
or simply give up the product.
Copyright © 2002 by Harcourt, Inc. All rights reserved.
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Uses of product life cycle:
The reasons why the business needs to analyze the product life
cycle are as follows:
It can help a business find out which stage its product is
in;
It can help to find out when to launch a new product or stop the
production of a product;
It can help to identify when to introduce an extension
strategy;
It can help to identify the revenue trends or profitability of a
product at each stage;
It can help to plan different marketing strategies for a product in
different life cycles…
Copyright © 2002 by Harcourt, Inc. All rights reserved.
Marketing Strategy Implications of the Product Life Cycle
Copyright © 2002 by Harcourt, Inc. All rights reserved.
Categories of Nontraditional Marketing
Expanding Marketing’s Traditional Boundaries
Nontraditional Marketing
Person Marketing—efforts designed to attract attention, interest,
and preference of a target market toward a person
Place Marketing—attempts to attract people to a particular area,
such as a city, state, or nation
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Expanding Marketing’s Traditional Boundaries
Nontraditional Marketing
Cause Marketing—efforts to promote a cause or social issue, such as
the prevention of child abuse, antilittering efforts, and
anti-smoking campaigns
Copyright © 2002 by Harcourt, Inc. All rights reserved.
Expanding Marketing’s Traditional Boundaries
Nontraditional Marketing
Event Marketing—marketing or sponsoring short-term events such as
athletic competitions and cultural and charitable
performances
Organization Marketing—attempting to influence consumers to accept
the goals of, receive the services of, or contribute in some way to
an organization
Copyright © 2002 by Harcourt, Inc. All rights reserved.
Developing a Marketing Strategy
1. Decision-makers in any successful organization, for-profit, or
not-for-profit, follow a two-step process to develop a marketing
strategy:
a. They study and analyze potential target markets and then choose
among them.
b. They create a marketing mix to satisfy the chosen market