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CHAPTER OVERVIEW
The marketing mix comprises all the elements associated with a product that
affect whether or not the customer decides to buy it
Looking at why a customer might choose one supermarket over another, these
factors play a part:
How far away is it?
How easy is it to park?
What is the range of products like?
Are prices competitive?
What additional facilities are there?
Are the staff friendly and helpful?
What services are provided?
Is there a loyalty program or other discounts available?
THE MARKETING MIX
Often simplified
Commonly referred to as the 4 Ps
Price: How much customers are charged and the terms of payment
Product: Design, quality, reliability, features, functions
Place: The way the product is distributed
Promotion: How information is communicated about the product to the customer
TESCO MARKETING MIX
Product:
Tesco sell a wide range of groceries. They sell all the leading brands products like Kelloggs, Heinz
and Nestle, as well as their own brand products, which are made for them by manufacturer s who will
add the distinctive Tesco packaging.
They hope to be able to cater for all customer s by adopting a good, better and best approach. This
means that they of fer a basic value Tesco brand, a standard Tesco brand and a range of Tesco Finest
products, as well as Healthy living and organic.
They are also diver sifying their product range away from groceries and into many other areas,
including clothing, electrical, computing, banking and insurance. This is to take advantage of their
established brand name and meet the need of as many customer s as possible.
Price :
Tesco aims to compete with the other supermarkets by of fering money of f voucher s if the same
products could have been bought at a leading rival cheaper. As such, it is not tr ying to be cheaper
than its rivals but the same.
It also needs to be aware of how the main discounting supermarkets are doing, and this may af fect
its future pricing policy.
Prices at the smaller convenience stores can be higher than in the supermarkets to reflect the
dif ference in costs .
TESCO MARKETING MIX
Promotion:
Tesco uses above the line promotion with its T V advertising.
It also uses below the line promotion. Its Clubcard allows it to keep close track on
individual customers and offer very specific promotions.
It also tries to involve itself in the community with its links with charities such as
Diabetes UK, the race for life. This is to enhance its image as a caring company.
Place:
Tesco is widely spread geographically across the UK and has established itself in other
European and Asian countries through buying supermarket chains and expansion.
In the UK, it has stores of many different sizes from its Tesco Extra hypermarkets to its
Tesco Express and One Stop mini stores.
It also uses internet shopping where, for a small extra charge, customers can buy online
and get their shopping delivered.
Tesco acts as its own wholesaler by having its own distribution centers which buy in
bulk from the manufacturers and distribute to the individual stores.
THE MARKETING MIX
Growing carts
No, you're not shrinking; it's the grocery carts that are growing. The larger the cart, the more
likely you'll end up spending more
Research found that when the size of the cart doubled, consumers bought 40% more
SUPERMARKETS AND THE PSYCHOLOGY BEHIND YOUR
PURCHASE
Precut vegetables and fruits
Precut veggies look so attractive, with their colorful packaging and promise of less work (no
need to wash or chop!). However, they aren't exactly a good deal. CBC News found that precut
veggies and fruits can be a lot more expensive than the whole items .
Eye-level trick
Items that are placed at eye level on the shelves tend to be pricier name -brand goods, which
are the products the supermarkets want you to buy.
SUPERMARKETS AND THE PSYCHOLOGY BEHIND YOUR
PURCHASE
Essentials at the back
Many of the essentials are in the back of the store or in the middle somewhere, and not in the
front
That's because supermarkets want you to walk through the store to reach them and hopefully
pop some items into your cart along the way
Similarly, essentials and common buys are also located in the middle of aisles, which will draw
you deeper into the supermarket
Sneaky circulars
A lot of items in the circulars are full-priced and not necessarily great deals.
SUPERMARKETS AND THE PSYCHOLOGY BEHIND YOUR
PURCHASE
Club cards
Grocery stores use to build customer loyalty
Influences you into buying all of your groceries from the supermarket that you're a member of
Colorful produce
Being hit with splashes of color in the produce aisle right when you walk in the store will put
you in a good mood and will make you want to buy more
It sets the tone for the whole shopping experience and makes customers think more favorably
of the particular supermarket
SUPERMARKETS AND THE PSYCHOLOGY BEHIND YOUR
PURCHASE
99 cents psychological pricing
Tagging a product with 99 cents can make consumers automatically round down
If you price an item for $1.99 vs. $2, the theory is consumers will associate the product with
$1 rather than $2
Samples
Samples slow you down in a supermarket and can get customers to buy a product that wasn't
on their list to begin with
Trying something for free can also instill a sense of commitment or obligation to buying the
product
SUPERMARKETS AND THE PSYCHOLOGY BEHIND YOUR
PURCHASE
Bulk shopping
You may think you are saving a bundle by shopping in bulk. Even if you are, buying more may
mean that you'll consume more than normal, which is what supermarkets are hoping you will
do
Music
The music is strategically chosen by the supermarket to keep you in a relaxed frame of mind
Music that's too fast can cause you to speed up your shopping and leave the store as soon as
you can
Slow music can influence you to take your time and linger around
CASE STUDY: DOING BUSINESS IN AFRICA
What price will you ask your customer to pay for your product or ser vice? What research have
you done to determine if that figure is reasonable and af fordable for your target?
Is your product or service still profitable at the price your customer is able/willing to pay ?
Price - measured in dollars, baht, etc. - is only one par t of the cost to satisfy
What will the consumers total, or real, cost be for obtaining your product or service?
Will the cost of driving to your location significantly add to their expense?
How much more will shipping charges add to their bill?
How will local, state and federal taxes impact the total cost of the product or service?
Does the value or benefit your product or ser vice of fer s the customer suppor t its cost?
One of the most dif ficult places to be in the business world is the retailer selling at the lowest
price
If you rely strictly on price to compete you are vulnerable to competition in the long term
Keep in mind that price alone doesnt usually convince the consumer to buy, so setting a low price wont
necessarily drive sales and could hurt your bottom line
CONVENIENCE TO THE CUSTOMER (PLACE)
Whether you have a web -based business or operate a brick and mor tar one that of fers online
sales, your website must be easy to navigate. Ask yourself:
Can the customer find what they are looking for?
Can they move from product selection to checkout with just a few clicks?
Are product descriptions detailed enough for the customer to make a purchasing decision?
If a customer has a question during the purchasing process, what kind of customer suppor t do
you of fer?
Have you created an app or a mobile edition of your website? Doing so puts your product or service in the hand
of the consumer virtually 24/7
You have to know how each subset of the market prefers to buy
On the internet (Lands End clothing, Amazon Books, Dell Computers)
From a catalogue
Over the phone
Using credit cards or cash
COMMUNICATION (PROMOTION)
Communication requires a give and take between the buyer and seller
Be creative and you can make any advertising "interactive "
Use phone numbers, your web site address, etc.
Listen to your customers when they are "with" you.
Use social media to ask your customers for their insights. Finding out what your customers like and
dislike about current products and learning what they want allows you to develop products and
services theyll be more likely to purchase. Create polls, track Likes and ask for comments.
You must adapt your communication approach to each of your targets. What you say and
where and how you say it is unique to each group.
CUSTOMER SOLUTION (PRODUCT)
To position your product or service for maximum profitability, you must know what
your target customer needs and wants
How you are going to determine what your customer wants?
What benefits does it offer?
How does it meet a customer need to solve a customer problem?
As you evaluate each element of the 4Cs, keep in mind that the customer drives your
decision making.
WAYS IN WHICH CUSTOMER RELATIONS CAN BE
IMPROVED
To meet customer expectations, you must:
Know what those expectations are through research
Manage those expectations through communications stress positives; dont promise too much
Know what your competitors offer helps ensure you continue to offer value for money
Follow up after sales to get feedback
Look for ways to build relationships with customers
Is there anything else you can offer them?
Businesses must continually review their products to ensure relevancy. In doing so they
consider:
The core benefit that the product meets
What does your product do and how does it add value?
Must keep track of competitors and be aware of new technology that might affect their business
Dif ferentiation looks to make a product more attractive by contrasting its unique
qualities with other competing products
Successful product dif ferentiation creates a competitive advantage for the seller, as
customers view these products as unique or superior
PRODUCT DIFFERENTIATION AND UNIQUE SELLING
POINT (USP)
Dif ferentiation achieved by having a USP
Why is your water better then other water our water only comes from this lake.
Sometimes dif ferentiation does not involve changing the product at all, but creating
a new advertising campaign or other sales promotions instead
JONES SODA
1. During the company's early years, how did Jones Soda dif ferentiate its product
from other soft drinks? How did it compete with Coke and Pepsi?
2. Who is Jones Soda's target demographic? How has the company chosen to reach
those customers?
3. What mistakes did Jones Soda make during its attempts to expand its market?
What ef fects did these mistakes have on the business?
But how did he take on giants like Pepsi and Coca Cola with such a small business?
Well, the short answer is that he didn't.
JONES SODA
He realized that the market was made up of people largely unsatisfied with the
same old colas that everyone thinks of automatically
So the market he was targeting was rebels: people who resisted conformity and
eschewed the norm
He started by concocting unique beverage flavors that were a wild departure from
the status quo
Drinks with names like "Jelly Donut", "Bug Juice" and "Fun" were an instant hit, but
even his awful-tasting novelty beverages like "Turkey and Gravy" were popular for
their uniqueness
JONES SODA
The company's brand image employs user -supplied photography on the labels of
their bottles
For years their only advertising was via two RVs that travelled the country giving
away free sodas and branded gear at high schools and skate parks
The resulting word of mouth drove the fledging company to 35 million a year in
sales revenues
The main reason it all worked was that Jones sodas knew their target market, and
their target market loved them
DOMINOS
You get fresh, hot pizza delivered to your door in 30 minutes or less or it's free.
While a bit on the wordy side, this example is an excellent USP because it's
completely transparent.
The terms are so clear that the customer knows he can hold the company to its
promise.
Domino's no longer of fers this deal because it inspired a number of car accidents
involving delivery drivers trying to beat their thirty -minute limit.
This slogan is an excellent example of why it's a bad idea to overpromise and under
deliver. Never make a promise to a prospect or customer unless you're sure you can
keep it!
DEBEERS
A diamond is forever.
There's a reason that this slogan has been around since 1948 and is still in use
today.
The slogan points out that diamonds, being next to unbreakable, last forever and
thus are the ideal symbol for undying love.
As a result, diamonds became the almost inevitable choice for engagement rings.
It's no surprise that Advertising Age magazine named this slogan the best
advertising slogan of the 20th century.
M&MS
This is an example of how even a rather of f -beat USP can be catchy and compelling.
Who would think of making a selling point out of the fact that your product doesn't
melt if you hold it? M&Ms did, and it worked very well for them.
FEDEX
FedEx no longer uses this slogan, but while it lasted, it was a perfect example of a
compelling USP.
In a few words, FedEx guarantees that it will deliver your package safely and on
time.
FedEx replaced it with the slogan, The World on Time, which is vague and doesn't
contain a USP.
AVIS
For a long time, Avis was the second -largest car rental company, after Hertz. In fact,
Avis was struggling just to stay afloat.
As part of a total image makeover, Avis hired the famous ad agency Doyle Dane
Bernbach to come up with a new ad campaign.
The campaign was so successful, Avis' market share went from 11% to 35% in just
four years.
11.4 PRODUCT LIFE CYCLE
PRODUCT LIFE CYCLE
The product life cycle traces the sales of a product over its life
The typical path for a product can be divided into five stages
THE FIVE STAGES OF THE PRODUCT LIFE CYCLE
Research/Development
Introduction/Launch
Growth
Maturity/Saturation
Decline
Withdrawal*
THE RESEARCH AND DEVELOPMENT STAGE
This stage can be very expensive, varies from product to product, and is a time of high
risk
The product may never be developed successfully (Edison made 1001 attempts at getting the light
bulb right; Dyson took 15 years and 5000 prototypes to develop his vacuum)
THE INTRODUCTION (LAUNCH) STAGE
Will likely struggle to get firms to stock their products or for customers to try their
product/ser vice
This is especially true if there are high costs involved (i.e. penalty payments)
Must ensure you can meet demand, deadlines, and can manage the growth process
Hiring new staff
Buying more equipment
Expanding premises
Some products will never reach this stage (after launch they are never successful)
THE MATURIT Y AND SATURATION STAGE
A firm may try to prevent sales of a product going into decline by using extension
strategies
Price May be low to May be able to May hold May cut to boost
introduce increase with sales
demand
Promotion May focus on May try to increase May highlight May try to reinforce
awareness awareness differences with existence and
competitors who may benefits of the
have entered product
The product May be limited May widen May stop developing May focus on best
number of range with demand new models/varieties performers
models/varieties
CASE STUDY: SEGWAY
In the early stages of the product life cycle sales will usually be less than at
maturity stage
EXTENSION: PRODUCT LIFE CYCLE AND CAPACIT Y
UTILIZATION
If it enters market with enough capacity for peak sales, its capacity utilization will
be low early on
This can be expensive
If it can produce 100,000 units, but is only producing 20,000, the cost per unit will be high
The cost of equipment and staff have to be covered
As sales grow, the cost per unit will be lower
The cash flow of a business at the start of the product life cycle is likely to be negative
Cash has to be spent researching and developing the product
Promotional costs during launch stage
Cash flow during this time especially must be monitored effectively
As sales enter the growth phase, cash flow should become positive
Less need for extensive promotion
In maturity phase:
May need to spend more on re-promoting
Cash flow may begin to fall, but usually remains positive
In decline phase:
Cash flow will drop
MATH MOMENT
It highlights the fact that marketing must be adjusted at dif ferent stages in the
development of a product
This means that marketing decisions in relation to product life cycle are not clear
cut
THE VALUE OF THE PRODUCT LIFE CYCLE MODEL
The range of products and services a firm has is known as its product portfolio
As part of its planning process, a business will examine the position of all of its
products in their markets ( portfolio analysis)
The Boston Matrix is a method of product portfolio analysis that examines the
products of a business in terms of their market share and the market growth
In the future can possibly be successful, but can just as likely fail
Highly successful
Firms may want to get rid of these products unless they can increase sales
2. To what extent do you think the Crocs brand can last for
another 30 years? Justify your answer.
Depends on competition; degree of new product development;
pricing; effectiveness of promotion
11.5 PRICING
PRICING
The price of the product can have major influence on its appeal and whether or not
customers think it is good value for the money
HOW PRICE AFFECTS PURCHASING DECISIONS
Price plays an important part in our decision about whether or not to buy it
Southwest Airlines, Jetstar, Ryanair, Airasia, Nok Air, etc. are gaining in market share at the
expense of Thai Airways, British Airways, etc.
It can be hard to compare prices directly as there are often special rates, dif ferent
tarif fs, dif ferent package options, rebates, etc.
FACTORS INFLUENCING PRICE
CASE STUDY: FASTJET
Pricing points
Offering a range of products to meet different parts of the market
Demand
Airlines, hotels, travel agents will often increase their rates over holidays
Competitors
Must take account competitors prices and set similar this is why businesses stress
particular benefits to justify higher prices
Many websites offer price comparison making demand more sensitive to price
CASE STUDY: SMOOTHIES
The price a firm charges for a product will be influenced by its objectives
If there is a profit target, this will influence the price per unit:
If it wants to achieve $10,000 profit and expects to sell 20,000 units, it must make $0.50
profit per unit
If it is aiming for high market share, maybe the price will be set lower to boost sales
THE STAGE IN THE PRODUCT LIFE CYCLE
A heavily branded consumer product (Nike, Coca -Cola, etc.) will be more expensive
than small brand products
An exclusive four-star restaurant will charge more than a fast -food restaurant
There are many factors that can influence price making it a complex decision
1. Explain who you think is the target market for the new
Vertu.
High income users who want a status symbol
Setting a low price for a new product in order to attract a large number of buyers
and a large market share.
Companies like Vivo, Oppo and Lenovo are using this strategy to try to take market
share away from Samsung and Apple
PRICE SKIMMING
Setting a high price for a new product to skim maximum revenues layer by
layer from the segments willing to pay the high price
When this group is exhausted, the price can be lowered to attract a new
group of customers
Appropriate when the firm can protect its idea/invention so competitors
cannot enter with a cheaper version
Often used with new technology
COMPETITIVE PRICING
Price takers are firms that accept the price which dominates the market
Examples:
A small independent electrical retailer may have to accept the price set by the major seller
Independent bookstores may have to follow the prices of major bookstores
PSYCHOLOGICAL PRICING
Selling multiple products for a lower rate than consumers would face if they
purchased each item individually.
Not only is bundling goods an ef fective way of moving unsold items, but it can
also increase the value perception in the eyes of your customers
Bundle pricing is more ef fective for companies that sell complimentary products.
A restaurant can take advantage of bundle pricing by including dessert with every
entre sold on a particular day of the week.
11.6 PRICE ELASTICITY OF
DEMAND
PRICE ELASTICIT Y OF DEMAND
Demand is price elastic if the value of the price elasticity of demand is greater
than 1
Every 1% change in price = more than 1% change in quantity demanded
If demand rises by 20% when the price is cut by 10%, the price elasticity of demand will equal
-2 (+20/-10)
The value of 2 shows that for every 1% change in price, the quantity demanded
changes by 2%
The negative sign shows that the price and quantity demand move in dif ferent
directions
If price goes down, quantity demanded rises
If price rises, quantity demanded falls
CALCULATING THE PRICE ELASTICIT Y OF DEMAND
Demand is price inelastic if the value of the price elasticity of demand is less than
1
Every 1% change in price = less than 1% change in quantity demanded
If the price is cut by 10%, and the increase in demand is 5%, the price elasticity of demand will
equal -0.5 (-10/+5)
The negative sign shows that as price goes down, quantity demanded rises (price
and demand go in opposite directions)
0.5, which is less than 1 , shows that for every 1% change in price, there will only be
a 0.5% change in quantity demanded
A local store raises the price of ice cream from $2.00 to $2.20. Due to this, the
amount you buy falls from 10 cones to 8 cones.
(10-8)
x 100
10
= -2
(2.00-2.20)
x 100
2.00
Time
In the short-term customers are often loyal to their current provider (esp. with credit cards, banks,
insurance co., etc.) often because people are inherently lazy or think any advantage to changing
will only be temporary
In the long-term, if customers feel they are getting a bad deal, this will be an incentive to switch
This means demand will become more price sensitive (more price elastic) over time
WHAT DETERMINES THE VALUE OF THE PRICE
ELASTICIT Y OF DEMAND?
Type of product
When buying convenience products (milk, tissues, etc.) purchasers tend to go to the nearest
stop
Purchasers do not spend much money on each item
Demand is likely to be price inelastic
Shopping goods (clothes, shoes, etc.) are likely to be more sensitive to price
Customers spend time comparing options
Demand is likely to be price elastic
If demand is price elastic, a business can increase revenue by lowering the price
It earns less for each item, but its overall income increases due to selling more products
If demand is price inelastic, revenue will fall when the price is cut
The increase in sales is not big enough to compensate for each item selling for less
When demand is price inelastic, the business could earn more by increasing price
It would lose some customers, but overall income should increase
SUMMARY TABLE: PRICE ELASTICIT Y AND REVENUE
By listening to experts and results from test markets, managers are likely to have
some idea of how sensitive demand is to price
Even if the exact value is not known, an understanding of whether the product is
price elastic or inelastic is useful when setting and changing prices
PRICE DISCRIMINATION
If a business can identify dif ferent demand conditions, it may want to change the
price in the dif ferent markets
Demand for transport before 9 am and between 5 -6 pm is likely to be price inelastic because
people have to get to and from work
At these times a business may increase price
At other times it is likely to be price elastic (there is not the same pressure to travel) so a
business may want to decrease price
Airlines use this strategy and increase prices over holidays
PRICE DISCRIMINATION
Price discrimination is paying dif ferent prices for the same product/service at
dif ferent times
Paid for communication used as a long -term strategy to build brand loyalty
Involves contact with the media and various groups the firm deals with
Attempts to send out particular messages about the firm or its products
Create a story or event to attract attention that you dont pay for
Involves:
Press releases to the media
Handling customer complaints
Organizing promotional events
2. Discuss other products that you think the Virgin brand could
extend to.
Does it fit with the brand values?
DIRECT MAIL
Some want to identify with a brand and the lifestyle associated with it
A brand has to be protected so that it doesnt become associated with the wrong
things
CASE STUDY: BEST GLOBAL BRANDS
1. Choose one of the brands from table 11.5 and explain what
you think are the brand values (what does the brand stand
for).
Public relations Can be relatively cheap Cannot control the way the story is covered by
the media
Direct mail Relatively cheap May not be read
Sales promotions Can entertain and interest the consumer Often short-term effects
Can encourage brand switching
Personal selling Two-way communication Can be expensive
Can answer customer enquiries Can only reach a limited number of customers
Branding Can enable higher pricing Brands may get damaged (for example, through
Can launch other products by building on brand loyalty poor quality) and this affects any products sold
under this name
Merchandising Can make the shopping experience better through the There will be a cost involved in providing displays
displays in terms of both money and time
May encourage purchase of items that were not originally
intended (impulse buys)
CASE STUDY: RED BULL
Above the line pulls customers into the shop or online store
Below the line pushes them into buying
You see an advert that makes you aware of a brand; then a special offer inside the shop that
makes you buy
T YPES OF PACKAGING
Important
To protect from damage
To promote the product attractive design
To provide information
COCA-COLA PROMOTIONAL MIX STRATEGY
Coca-Cola went from a cocaine -infused elixir in 1886 to a ubiquitous sugary drink by
1929.
Now people in more than 190 countries drink 1 .9 billion servings every day
Having a product people enjoy is far from the only thing needed to become one of
the world's most valuable companies
COCA-COLA IN THE BEGINNING
Started a mass coupon initiative that resulted in 10% of all products from 1887 to
1920 to be given away in order to build brand awareness.
Coca-Cola invests billions of dollars a year in advertising and promotions around the
world to maintain its position of industry leadership against rival Pepsi.
Spend a good portion of the ad budget on television advertising. It has used polar
bear characters and a message of nostalgia and tradition as part of its branding
over time.
Magazine ads, online and social media have also been used as media for Coca -Cola
marketing.
Sales promotions at the store are used to drive revenue during slow periods .
Engages in sponsorships (American Idol, BET Network, NASCAR, NBA , NCAA, Olympic
Games, FIFA World Cup, etc.)
COCA-COLA NOW
Special incentives are given to the distributors and retailers for pushing Coke
products
Retailers are given refrigerators and Coca Cola merchandise for advertising the
brand
Coca Cola also engages in various CSR (corporate social responsibility) activities to
help support environmental and social issues across the globe
Announced recently that for the first time, all Coke Trademark brands will be united
in one global creative campaign: Taste the Feeling.
SWATCH PROMOTIONAL MIX
Swatch enjoys an esteemed position in the market and has adopted an aggressive
marketing campaign to create and retain positive brand awareness
It has launched ad campaigns via social media platforms like its own website,
Twitter and its Facebook page which has a fan following of more than 320,102
followers
Swatch also advertises its products via electronic and print media in television and
magazines. It has been an active participant in several sponsorship deals to gain
exposure
SWATCH PROMOTIONAL MIX
Swatch is of ficial timekeeper and active sponsor of the Olympics and European
Sports
Swatch has also signed a promotional deal with World Volley Ball Federation
The distribution of a good or service refers to the way in which the ownership of it
passes from the producer to the consumer
Intermediaries
Sony and Phillips have intermediaries between producer and final seller
Retailers (Walmart, Tesco, etc.) final stage of distribution chain
Wholesalers buy products in bulk and sell on to retailers
Easier to deal with than individual manufacturers and have a range of products
CHANNELS OF DISTRIBUTION (PLACE)
The dif ferent distribution channels can be described in terms of the number of
levels involved in the process
CHANNELS OF DISTRIBUTION (PLACE)
Zero-level channel
Good/service passes directly from producer to consumer
Dentists, accountants, plumbers, etc.
One-level channel
Has one intermediary (i.e. a retailer buys products from the manufacturer and sells to
consumer)
Two-level channel
Has two intermediaries (i.e. a wholesaler buys products from the manufacturer and sells to a
retailer who sells it to the consumer)
CHANNELS OF DISTRIBUTION (PLACE)
Costs
May be cheaper to sell directly
Price of product will be higher if it goes through multiple intermediaries
CHOOSING A DISTRIBUTION CHANNEL
The nature of the outlet can have an impact on the buying experience
Layout, dcor, availability of staff and changing rooms, in -store displays, etc. all influence the
view of the product
Especially important for specialty items (luxury cars, jewelry, etc.)
Price The internet allows prices to be changed according to when people order (for example, how far in advance of an event), what time of day they
order, whether they have visited the site before, whether they have bought from you before. The ability to adjust the price based on many
factors so there is no one price is known as dynamic pricing. Businesses such as airlines and online retailers such as Amazon use dynamic
pricing very effectively.
Promotion Businesses can promote their products online and target who their adverts reach depending on, for example, where you are searching from and
which terms you are using to search. Businesses can get others to help promote their products through viral marketing where their own
campaign is forwarded via social media such as Twitter and Facebook by individuals to their friends. Methods of promotion such as blogs and
Twitter are cheap ways of communicating.
Distribution Businesses can now sell direct to the customer online rather than selling through intermediaries. By selling directly through e-commerce, a
business may need fewer physical stores. This is known as clicks rather than bricks.
Product Some products can now be downloaded rather than having to be physically produced, for example music and e-books.
People Interestingly, people are not necessarily removed from marketing due to the internet. In fact, many businesses now promote in their websites
the ability to talk to a customer service representative at any time. The internet can interest you in an item and the sales representative can
help you with enquiries or to make your choice.
Process The internet can make the buying process more convenient in that you can search more widely than in a main shopping street.
Physical The design of a store may be less significant with the internet but the design of the website becomes key. The appearance, the ease of finding
evidence information and navigating the site affect the customer experience.
CASE STUDY: E-BOOKS
The nature of the product and market conditions make some elements more
important
A car insurance business might spend lots of advertising and a sales team
A local bakery may rely on word of mouth
A luxury hotel needs to have a good location
A web-based business can be operated from home
Gift-type products will need to impress the customer with packaging
Packaging for computer equipment sold to businesses needs to protect during transportation
Exclusive handmade shirts might use higher prices to reflect quality
Holiday packages might need lower prices in order to compete
AN EFFECTIVE MARKETING MIX?
The mix chosen must combine and complement each other so that the product
provides better value for money than the competition
Offering more benefits (additional features, etc.)
Promoting the benefits more effectively
Making the product more accessible
The buying process is very complicated and involves many dif ferent factors
CASE STUDY: BARBIE
There might be little incentive to innovate and quality of service may be reduced
An oligopoly market is one where a few large firms dominate the market rather than
just one
The UK has a few large banks, a few large supermarkets, a few large electricity providers
These firms watch each other closely and there is a high degree of competition
Promotional campaigns (Discounts, offers, etc.)
How they do business
Lots of distribution channels (lots of branches)
Ease of doing business (online banking)
Additional offerings (insurance, investment advice)