THE MARKETING MIX

When marketing their products and

services, firms need to create a
successful mix of:

PRODUCT
PRICE
PROMOTION
PLACE

The 4 Ps of marketing
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PRODUCT

The Product is the actual item that a

consumer purchases, including the
packaging, image, guarantee and
after-sales service
Learn this definition!

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THE PRODUCT LIFE CYCLE

S
a
l
e
s

I
N
T
R
O
D
U
C
T
I
O
N

New
product
Sales low
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G
R
O
W
T
H

Sales
grow
rapidly as
product
becomes
well
known

M
A
T
U
R
I
T
Y

D
E
C
L
I
N
E

INJECTING NEW LIFE

Time
Product fully
established
Sales even out
Competitors enter
market

Popularity
declines
and sales
fall

New marketing
strategies are
introduced to reverse
decline
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Extension
A business wishing to extend the
Strategies
life of a product which has
reached maturity or is in decline
can alter one or more of the
marketing mix by changing
PRODUCT eg alter the packaging,
introduce a new version
PRICE eg reducing the price to
interest customers
PROMOTION eg introduce a new
advertising campaign
PLACE eg change where it can be

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EXTENSION
STRATEGIES
One company
launched a new

drink 7 times before it was

Answer:
successful. Can
you guess what
Malteesers
they
called it?7 UP
Introduction of new variety, eg white chocolate
New advertising campaign for new variety

Guidance
Changed name to Pastoral Support
PS teachers spend more time on guidance and less
on teaching

Marathon
Changed name to snickers
Sponsors of sporting event

Banks
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Services now available via internet or telephone

Cadburys Flake
Extention Strategies
The Cadbury Flake bar was originally launched in 1920
In 1930 the Flake 99 ice cream accompaniment was
introduced
2001 theSnowflake(a crumbly white chocolate Flake centre
covered in milk chocolate) was launched.
In 2003 theCadbury Flake Dipped was introduced where
consumers can enjoy all the benefits of the Flake withouth
the mess - ideal for on the go.
In September 2004Cadbury Flake Moments were launched,
a selection of miniature milk chocolate andwhite chocolate
Flake pieces,which extended the Flake brand into the giving
market - creating the ideal gift.
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QUESTIONS

FOR YOUR JOTTER

1.

Compare the product life cycles of (a) a new ipod shuffle and
(b) Kelloggs cornflakes. You may use diagrams to illustrate
your comparison.

2.

Chanel No5 is an expensive perfume which has been around for

many years. Its sold exclusively in only certain stores and its
target market is women over 35. The company feels it is losing
ground to newer perfumes and wants to extend the life of the
product. Suggest as to how they might achieve this.

3.

Name 3 other products or services which have altered some

element of their marketing mix recently and describe how they
have done this.

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BRANDING
A product with a personality
Instantly recognisable by logo,
packaging, taste, advertising and other
features
Believed to be a guarantee of quality
Some brands have snob value
Usually cost more
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BRAND LOYALTY

Some customers are loyal to a particular

brand. They will buy the brand again
and again and also other associated
products
Fairy washing-up liquid
Fairy washing powder
Fairy dishwasher powder

The product is often sold in places that

reinforce the brand image, eg sports
drinks in leisure centres
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OWN LABELS

What about
premium own
brands? em

Retailers own brands eg Sainsburys

Savers, George at ASDA
Not manufactured by retailer
Sold only in retailers stores
Less expensive than branded goods
Need little advertising
Seen as inferior quality
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Which brands do you associate with the

following products?

Toilet paper
Fish fingers
Chocolate
Soft drink
Gravy
Toothpaste
Washing up liquid
Brown sauce
Crisps
Cat food
Disposable nappies
Digestive biscuits
Ice cream
Soap powder
Teabags
Coffee

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Andrex
Birds Eye
Cadburys
Coca-cola
Bisto
Colgate
Fairy liquid
HP
Walkers
Whiskas
Pampers
McVities
Walls
Persil
PG Tips
Nescafe

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QUESTIONS
1.

FOR YOUR JOTTER

From a marketing point of view, describe the

differences between Heinz baked beans and
Safeway own label baked beans under the
following headings

Product
Price
Place
Promotion

2. Heinz produce many products other than baked

beans. Describe the advantages of producing
several products under the same brand name?
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PRICE

The amount consumers are prepared

to pay for a product or service
Learn this definition!
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What is the best price for a

product?
Charging the right price is a very
important part of the marketing mix.
How much you charge will depend on
How much it cost you to make your product
How much your competitors are charging
Whether you are trying to introduce a new
product
The image you want for your product
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THE PRICING DECISION

A low price will attract sales. This
makes it possible to sell large
quantities at a low average cost
An average price will mean you need
to compete with your rivals by a
means other than price, eg by having
a better quality product or better
promotion or advertising
A high price can be charge if your
product is seen a being better than
your rivals
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For each of the following products, try to explain whether the

manufacturer/retailer is going for a low price, an average price or a
high price
Chanel No 5
Morgan Sweet
Love
CK One
Porsche Boxster
Nissan Micra
Ford Mondeo

(HIGH prestige product, expensive packaging)

(LOW lower quality, cheaper packaging)
(AVERAGE in competition with similar brands)
(HIGH prestige product, sporty image)
(LOW smaller car, lower spec)
(AVERAGE in competition with other models)

Supermarket own brand

Heinz beans
Safeway savers beans

(AVERAGE competitively price alternative)

(HIGH market leader, quality product)
(LOW lower quality, cheaper price to attract
customers)

Jeans from market stall (LOW lower quality cheaper price to attract
customers)
Levi 501
(HIGH market leader, quality product)
Jeanster jeans
(AVERAGE competitively price alternative to
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branded goods)

PRICING TECHNIQUES

Time-based - suitable for repairing a washing machine

where the price is dependent on how long the job takes
Cost plus - calculate how much it costs to make a product
then add on profit
Start-up or penetration pricing - a firm bringing out a
new product or trying to break into a market might
charge a low price at first in order to interest
consumers. (penetration)
Off the top or price skimming a prestige product or a
new highly sought after product can often be sold at a
high price because consumer want to be associated with
the product
Destroyer selling a product at a very low price in order
to destroy a competitor. Once the rival firm has been
forced out of business the price of the product will be
increased
Market Orientated Selling a product at a price in line
with competitors. This is typical where there are many
competitors.
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QUESTIONS

FOR YOUR JOTTER

Describe a suitable pricing technique for each of the

following situations? Justify your answers.
A new state-of-the-art video mobile phone just
on the market
A self-employed gardener wanting to quote
customers for general gardening jobs
A newspaper in fierce competition with a rival
paper
Cadburys introducing a new chocolate bar
A business makes and sells fresh sandwiches to
office workers
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PLACE
This is the route that products
take to reach the consumer
from the manufacturer
Learn this definition!

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The Market Place

No matter how good the product is it
has to be in the right place at the right time.
buyers and sellers come together in the following ways

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Shop
Cash and Carry
Market stall
TV shopping channel
Internet
Newspaper and Magazines
Mail order
Direct mail
Factory shop

These are
referred to as
Direct
Marketing
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CHANNELS OF DISTRIBUTION
MANUFACTURER

MANUFACTURER

MANUFACTURER

WHOLESALER

CONSUMER
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RETAILER

RETAILER

CONSUMER

CONSUMER
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The channel of distribution chosen

will depend on:

The product being sold

The finance available
The reliability of companies in the chain
The desired image of the product
Legal restrictions
The products life cycle
The manufacturers distribution capability
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QUESTIONS

FOR YOUR JOTTER

1.

Wheels Ltd manufacture bicycles. They sell to customers via

wholesalers and retailers. They are considering opening a
factory shop to sell directly to customers. Outline the
advantages of this plan to Wheels Ltd and to their
customers? (4)

2.

Advances in technology have opened up new channels of

distribution. Describe one of these new channels and
illustrate your answer with an appropriate example.

1.

There are legal restrictions on the way in which some

products are distributed to consumers. Give examples of such
products and describe why these restrictions are enforced.

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Extension
Log on to
http://puzzlemaker.discoveryeducati
on.com/
Create a word search on marketing
using terms we have covered so far.
Include at least 12 terms
Swap with someone and complete
their word search.
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PROMOTION
Promotion is the way in which a
consumer is made aware of a
product or service and is persuaded
to purchase it
Learn this definition!

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PROMOTION
The aims of promotion are to
PERSUADE consumer to buy the product
INFORM consumers about the product
REMIND consumer that the product still
exists

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ADVERTISING MEDIA
Television
Newspapers National, Sunday, local
Magazines
Radio
Cinema
Outdoor media billboards, sports
hoardings, bus shelters
Internet
Direct mail

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Above the Line Promotion

This targets everyone even those not
interested in the product.
TV
Radio
Newspapers
magazines
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Below the Line Promotion

The business has direct control.

Direct mail (post or e-mail)
Personal selling
Trade fairs

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Quick Task.
State whether each of the media below is Above
or Below the Line.
Suggest advantages and disadvantages for each
of the following Advertising Media.:

Television
Daily Newspapers
Radio
Cinema
Billboards
Internet pop ups
Direct Mail

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Quick Task 2
Suggest a suitable advertising media
for Nikes new trainers.
Justify your answer.

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 PRODUCT ENDORSEMENT

Famous sport or showbiz

personalities are paid to wear and
use a particular product, eg
Adidas, Gillette and David
Beckham

PRODUCT PLACEMENT

Paying for product to be used

in films and TV programmes, eg
James Bond driving a BMW in
Goldeneye

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Quick Task 3.
Explain possible advantages and
disadvantaged of celebrity
endorsement for an organisation.

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The choice of advertising media depends

on:
The product
The audience to be targeted
The type of coverage, eg national or
local
The amount you want to spend
The advertising used by competitors

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SALES PROMOTIONS
Short term inducements used to
encourage sales
There are 2 groups of sales
promotion:
Into the pipeline
Out of the pipeline

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INTO THE PIPELINE

These are offered by manufacturer to
retailers (dealers) to encourage them to
stock their products:

Point of sale displays

Sale or return
Dealer competitions
Staff training
Credit facilities

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OUT OF THE PIPELINE

These are offered by the retailer to the
consumer to encourage purchases to be made:

Free samples
Credit facilities
Demonstrations
Competitions
BOGOFs
Promotional prices
Free offers
Coupons/vouchers

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Buy One Get

One Free

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QUESTIONS

FOR YOUR JOTTER

1. Describe the difference between product

endorsement and product placement. Give
examples to illustrate your answer.
2. Compare the following advertising media
television, newspapers and direct mail. Your
answer should refer to cost, coverage, market
segment, legal restrictions, and competition.
3. Describe 2 forms of each of the following
types of sales promotion
Into the pipeline
Out of the pipeline

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Activity.
Design a poster explaining all you
know about the Marketing including
the Marketing Mix (The 4ps)

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