Chapter 7 marketing mix

Chapter 7: Marketing Mix
Ms. DANG THI MAI HUONG (SARAH)
Faculty of Economics and Management
International School of Thai Nguyen University
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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.


 Product:
Products must be ensured to meet the needs
of customers in terms of the following aspects:
1. Appearance
2. Function
3. Cost


Features of a product to meet the needs of
customers

 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.


• Influences from the pricing factors


Place
 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:
1. How the product is distributed physically, such
as air, sea, rail, or road.
2. How the product is sold, such as through
retailers, wholesalers, or direct mailing, etc.


Promotion
 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.


Factors for making choices of
marketing mix:
1. The type of product sold, e.g. for high tech.equipment, the business needs to emphasize
the product and its quality rather than
promotion.
2. The market sold to, e.g. for consumer
markets, promotion may be emphasized.


3. 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.
4. 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.
5. 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...

Product Life Cycle
 Definition: Product pass through several stages
of development in its life from introduction to
decline:
Stages of product life cycle usually include:

1.
2.
3.
4.

Introduction
Growth
Maturity
Decline



• Introduction Stage – This stage of the cycle
could be the most expensive for a company
launching a new product. The size of the market
for the product is small, which means sales are
low, although they will be increasing. On the
other hand, the cost of things like research and
development, consumer testing, and the
marketing needed to launch the product can be
very high, especially if it’s a competitive sector.

• Growth Stage – The growth stage is typically
characterized by a strong growth in sales and
profits, and because the company can start to
benefit from economies of scale in production,
the profit margins, as well as the overall amount
of profit, will increase. This makes it possible for
businesses to invest more money in the
promotional activity to maximize the potential of
this growth stage.


• Maturity Stage – During the maturity stage, the
product is established and the aim for the
manufacturer is now to maintain the market
share they have built up. This is probably the
most competitive time for most products and
businesses need to invest wisely in any
marketing they undertake. They also need to
consider
any
product
modifications
or
improvements to the production process which
might give them a competitive advantage.


• Decline Stage – Eventually, the market for a
product will start to shrink, and this is what’s

known as the decline stage. This shrinkage
could be due to the market becoming saturated
(i.e. all the customers who will buy the product
have already purchased it), or because the
consumers are switching to a different type of
product. While this decline may be inevitable, it
may still be possible for companies to make
some profit by switching to less-expensive
production methods and cheaper markets


Uses of product life cycle:
The reasons why the business needs to analyze
the product life cycle are as follows:
1. It can help a business find out which stage its
product is in;
2. It can help to find out when to launch a new
product or stop the production of a product;
3. It can help to identify when to introduce an
extension strategy;
4. It can help to identify the revenue trends or
profitability of a product at each stage;
5. It can help to plan different marketing
strategies for a product in different life cycles…