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Marketing Mix
Price
Objectives
Define the marketing mix. Explain pricing strategies in a given business. Apply different pricing strategies to a range of
products. Analyse the appropriateness of different
pricing strategies in a given business.
What are the 4Ps of the Marketing Mix?
Components of the Marketing Mix
Marketing Mix
ProductProduct
PromotionPromotion
PlacePlace
PricePrice
How is the Marketing Mix Used?
Understand the needs and wants of customers (Kolter 2002).
Used by businesses to decide how and where to market a product.
A small business may just hand out leaflets. A large business will look at each of the 8Ps
in detail.
The 4ps must be balanced
Marketing Strategy
Marketing Strategy
Integrated Marketing Mix
Integrated Marketing Mix
ProductProduct PromotionPromotionPlacePlace PricePrice
Different Marketing Mix for Different Situations
Are goods: regular purchases Impulse purchases Emergency purchases
chocolate brands focus on place and promotion.
Type of Purchasing Most Important element of mix
Regular Purchases Product, promotion and price
Impulse Purchases Place, and promotion (including packaging)
Emergency Purchases Place and product
Influences on the Marketing Mix Finance
Technology
Research
Consumer
Where does the Marketing Mix fit into Planning?
Analyse the market
Develop Marketing Mix
Develop Strategies
Write down the 4Ps on your post-it note
QuizThe biggest influence on the marketing mix is?
A. FinanceB. ConsumersC. Technology
Which is a member of the 4 Ps ?A. PeopleB. PlaceC. Public Relations
The marketing mix is the fundamental aspect of marketing?
TrueFalse
Quiz
If I was a small business, which promotion method would I be likely to use?A. National advertising between mainstream TV programs B. Online through FacebookC. National newspaper
Marketing excites me.TrueFalse
Objectives
Define the marketing mix. Explain pricing strategies in a given business. Apply different pricing strategies to a range of
products. Analyse the appropriateness of different
pricing strategies in a given business.
Importance of Price – Business Revenue
Revenue = price x units sold
If the price isn't right businesses could:
Lose customers
Lose revenue
Reason for pricing strategies
To break into a new market. To try and increase market share. Increase profit. To make sure all costs are covered.
Pricing Strategies
Types of Pricing Strategy: Cost plus Pricing. Penetration Pricing. Price Skimming. Competitive Pricing. Promotional Pricing. Loss Leader.
Cost Plus Pricing
A company will look at how much a product will cost to produce.
Then add a percentage mark-up profit (money added on top to make a profit).
Easy to apply. Always covers costs. If competitor is selling at a cheaper price
could lose sales.
Penetration Pricing
This would possibly be used when trying to enter a new market.
Price is set lower than your competitors. Customers will try your product and become
regular customers.
Price Skimming
Product is usually a new one and therefore can be sold on the market at a higher price.
Establish the product being of high quality. May put off some customers who can’t afford
it.
Competitive Pricing
Pricing in line with your competitor’s price or just below.
Sales are likely to be high because your price is not over or under priced.
Requires research which costs money. Can end in a pricing war with competitors.
Promotional Pricing
Promotional pricing is pricing the product low for a set amount of time.
Useful for getting rid of unwanted stock. Renew interest in the business if sales are
falling. However, can affect business revenues.
Loss Leader
Aim to capture a large share of the market by charging a low price (below cost).
Short-term the firm will make a loss. However, it will capture a large market share. Longer term will raise the selling price of the
product and make profits.
Missing line task
Market Penetration - Charging a low price to gain market share.
Price skimming - Pricing high to maximise profit margins.
Cost plus - Adding a % of profit onto direct costs. Loss Leader - Selling a product at below its cost. Competitive - Charge above or below competitors Promotional - Low price for a small period of time.
The price is right
Eight scenarios, which pricing strategy would you use and why?
Objectives
Define the marketing mix. Explain pricing strategies in a given business. Apply different pricing strategies to a range of
products. Analyse the appropriateness of different
pricing strategies in a given business.
Case study - Homework
Read case on ASDA and £3 jeans. Answer questions, 1-3.
This is due in for Thurday
Objectives
Define the marketing mix. Explain pricing strategies in a given business. Apply different pricing strategies to a range of
products. Analyse the appropriateness of different
pricing strategies in a given business.