Marketing Mix: Product, Price, Distribution, Promotion

Posted on Dec 22, 2024 in Economy

What is the Marketing Mix?

The marketing mix is the most appropriate combination of four marketing tools controllable by the company and known as the 4Ps in English:

  • Product (attributes, positioning, brand, and packaging)
  • Price (price list, pricing strategies)
  • Distribution (intermediaries, distribution channels, logistics)
  • Promotion (advertising, sales promotions, public relations, direct marketing)

The Product

The product is divided into two categories:

  • General products: The consumer (end to his own use)
  • Industrial (end for its activity)

Also differ by type: tangible (a car) and intangible (a medical provider). Speak of the different dimensions:

  1. The basic benefit. E.g., Would eat in a restaurant.
  2. The generic product. Set of elements that enable to meet that need.
  3. The expected product: This refers to what the consumer expected when purchasing this product. E.g., The attention of the waiter, a meal.
  4. The augmented product: They are the product characteristics that distinguish it from the competition. Ex. Good wines.
  5. The potential product: features will include in the future in this product (offering a massage while food comes from).

Product Portfolio of a Company

Product portfolio and product range is very large organized product lines, which are homogeneous groupings within the range:

  • The length (number of products that the firm)
  • The amplitude (No. of tie lines: a product portfolio)
  • The depth (num of items within each line)
  • The consistency (degree of relationship portfolio products keep each other)

Differentiation and Positioning of Products

The differentiation is to achieve a unique positioning in the marketplace. Companies have several tools to differentiate their products from the competition:

  • Quality
  • Design
  • Distribution
  • Brand name formed by, who could read and logo.

This can take different strategies:

  • Single brand strategy. It involves using the same brand for all company products. (E.g., Philips).
  • Multibrand strategy. It involves using a different brand for each product or group (e.g., Vitalinea brands such as Danone, Danet).
  • Branding Dealer: The dealer-owned brand that sells. (E.g., Squire Mercadona with brands like

The Life Cycle of Products

Has stages:

  1. Introduction – Begin with the launch of the product on the market. (Benefits at this stage are very small, and may even get to have lost).
  2. The stage of growth – Significant increase due to increased product awareness by consumers. (Tbn profits grow and are the first competitors).
  3. The stage of maturity. The benefits continue to grow in this, but at a slower pace and begin to produce real competitive battles.
  4. The stage of decline, sales and profits decrease, as consumers begin to want the products of other competitors (for Therefore the peak and this process eliminates the market).

Decisions on New Products

  1. Identified opportunities and generating ideas for new products.
  2. Evaluation ideas
  3. Study of the economic viability of projects.
  4. Test of concept (displayed graphically or literary as will be the product).
  5. Test product (presentation of a first version of the product to a representative sample of consumers to re-verify their acceptance.
  6. Test Market (evaluates the product by placing it within a limited area).
  7. Launch and effective marketing of the product (is important to choose the time of launch).

The Price

(From two points of view:)

  • For the buyer: The price is the value that is ready to pay for a given product.
  • For the seller: The price is the value at which it is able to sell.

Factors Determinant of Price

(At the time of placing the influencing price:)

(Internal factors):

  1. Production costs (to any company interested in selling below production costs).
  2. The aims of the organization (to influence the setting of a price high or low).
  3. The life cycle phase in which the product is found to also require a fee.

(External):

  1. The sensitivity of consumers from the price (i.e., as several sales to adjust the price the product.).
  2. The image you project the company intends.
  3. The legal restrictions (the government is setting its price).

Methods of Pricing

  • Pricing based on cost Consists of adding the unit cost of producing a certain profit margin (percentage) on the cost price of production.
  • Pricing based on competition: In this case, the price is set according to prices that are competitive products. There are several alternatives: fix a price higher than (a competition (comp is done when our product is of better quality than the competition. Setting a lower price (can increase the market share). Set a price similar to the competition (when the product is very little difference, the competition).
  • Pricing based on demand: It consists in setting the price in terms of what they’re willing to pay consumers.

Distribution

Part of the marketing function is to make the product available to the final consumer or industrial purchaser:

  • “The moment you need it”
  • “Place where they want it”
  • “The quantity demanded.

Intermediaries: Persons carrying out this distribution function.

Roles:

  • “Regular supply and demand (buy large quantities and sold in smaller quantities.”
  • “Create variety.”
  • “Perform requested tasks (transport, storage.)
  • “Grant funding.”
  • “Undertake marketing (manufacturer information)
  • “Takes risks.”
  • “Additional services (after-sales)

Ranking:

  1. Wholesalers: bought and sold in large quantities, never the final consumer.
  2. Retailers: sold in small quantities to final consumers.

Channel Distribution

This is the way they have to travel products from manufacture till the place of consumption.

According to length (No. Intermediaries):

  • Direct Channel: no intermediate type, usually in small businesses.
  • Canal short: few intermediaries. Example: dealer cars.
  • Long Channel: many middlemen. Example: food.

According to the width (coverage to be achieved):

  • Distribution intensity: it searches for the largest number of outlets (refreshments).
  • Selective distribution: selected outlets by the manufacturer.
  • Exclusive Distribution: Product is sold in one or a few establishments.

Organizational Structure:

  • Horizontal members that perform the same function (malls).
  • Vertical: different roles (Zara: manufacturer and distributor).

Franchise

A contract between a company that gave several people the opportunity to exploit an exclusive business in a geographic area.

  • “Excess (company): you can expand your business faster and taking less risk.”
  • “Franchisee (person): Manage their business independently, pay a fee, benefits of using a recognized brand in the market.

Communication or Promotion

Communicating the product features and entice the consumer.

Objectives:

  • Make a product is known
  • Report on characteristics
  • Evoke feelings favorable
  • Highlight positive values of competitive products
  • Generate trust
  • Encourage the purchase.

To achieve these objectives the company has several instruments: (Advertising, Sales Promotion, Public Relations, Sales staff, Marketing direct).

Advertising

Unilateral communication process in which a sender addresses a message to an anonymous recipient group, called the target.

Objectives: inform, persuade that the product is the best and remember the product is in the market.

Phases:

  1. Preliminary report: product specify features, advantages over the competition.
  2. Campaign: identifying ways to use, determine specific media to determine how advertising budgets.
  3. Evaluate impact surveys, meetings to see if to increased visibility.

Illegal Advertising

That which violates the dignity, values and rights, misleading, i.e., that is misleading and cause economic harm to competitors, unfair, harms competitors, infringes the rules (snuff,), subliminal: captured in a conscious and are recorded in the subconscious.

Sales Promotion

The set of actions, limited in time and space, which aim to increase sales and are aimed at consumers or prescribers.

Public Relations

Activities being made to create a good image of the company and its products. Do not try to sell the product but to create favorable feelings toward the company and its products.

Type:

  • External: for consumers, suppliers, institutions.
  • Inside: entrepreneurs for the company itself in order to create a good image among their workers (Christmas gifts).

Marketing

Characterized by using interactive information channels (email, Internet). It’s necessary to have a good baseline data that includes: “Demographics,” “Geographic.” the companies that sell through catalogs, mail and phone today so do as complementary channel.

Advantage: lasting customer relations, are easy to measure

Merchandising

Actions to encourage purchase.

Phases or types:

  1. Presentation: choosing the location of the product at the point of sale.
  2. Seductive lighting, scenery.
  3. Management: quantitative techniques used to make profitable sales point of the exposed faces no repetition or product into two sections.