The Marketing Mix (4p’s)
The marketing mix consists of Product, Price, Place and Promotion strategies that a firm uses to help them reach their objectives.
The marketing mix principles are controllable variables which have to be carefully managed and must meet the needs of the defined target group. All elements of the mix are linked and must support each other.
When an organization introduces a product into a market they must ask themselves a number of questions.
• Who is the product aimed at?
• What benefit will they expect?
• How do they plan to position the product within the market?
• What differential ...view middle of the document...
A high quality product maybe reflected in the price.
Branding: A brand is defined as “a name, term, sign, symbol or a combination of these, that identifies the maker or seller of the product” A brand must stand out and be recognizable, and should help the firm differentiate itself from its competitors.
Product Features: Additional features should increase the benefit offered to your target market. The firm may decide to charge more for these additional features.
Is one of the most important elements of the marketing mix. It is the only mix which generates a turnover for the organization. The remaining 3p’s are the variable cost for the organization. It costs to produce and design a product, it costs to distribute a product and costs to promote it.
Pricing is difficult and must reflect the supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization.
Pricing should take into account the following factors:
• Fixed and variable costs
• Company objectives
• Proposed positioning strategies
• Target group and willingness to pay
An organization can adopt a number of pricing strategies. The pricing strategies are based on what objectives the company has set itself to achieve.
Where the organization sets a low price to increase sales and market share.
The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer, this strategy is popular within the games console industry.
Setting a price in comparison with competitors. A firm has three options, price lower, price the same, or price higher.
Product Line Pricing
Pricing different products within the same product range at different price points. An example would be a DVD manufacturer offering different DVD recorders with different features at different prices. The greater the features and the benefit obtained the greater the consumer will pay. The form of price discrimination assists the company in maximizing turnover and profits
The organization bundles a group of products at a reduced price, this pricing strategy is popular with supermarkets.
The seller will consider the psychology and the positioning of price within the market place. The seller will therefore charge $199 instead of $200.
The price is set high to reflect the exclusiveness of the product. An example of products using this strategy would be first class airline services, Porsche etc.
The organization sells optional extras along with the product to maximize its turnover. This strategy is used commonly within the car industry.
Seasonal Discounts –...