MARKETING MIX The combination of marketing components that

MARKETING MIX The combination of marketing components that will maximize customer satisfaction and ensure PROFITS

The components of the MARKETING MIX THE FOUR P’S • PRODUCT • PRICE • PLACE • PROMOTION

PRODUCT The goods and services a business will offer to its customers • • Choice of product Packaging Services to support product Branding Positioning Quality Business image

PRODUCT • What product/service will you provide? • What choice of product/service will you make available to customers? • How will you package or display your product? • Will you provide additional services such as repair with your product? • Should you offer “national brand” products or “private brand” products? • What warranties or guarantees can a customer be assured of when purchasing your product/service? • What level of quality do you plan to offer with your product/service? • How do you want customers to view your business? • How much research and development will be needed to stay competitive? • How do you want your business to compare to the competition?

Product--Choice and Packaging • Choice of products for your business o Product consistency is vital. o Do all of the products/services “fit together? ” • Packaging your products o Packaging choices affect the appearance and appeal of the product. o Packaging impacts the display and storage of the product.

Product--Services • Do you provide services to support the products: o Some products such as computers, appliances, vehicles, and many other “technical” products require special services to maintain customer satisfaction. o Do you provide repair services for your product or just sell the product?

Product--Branding • Branding o National brands offer an established reputation and the manufacturer provides extensive promotion. • But are they worth the cost? o Private brands are sometimes difficult to establish and expensive to promote but yield higher profit margins for the seller and help promote customer loyalty. • How will I convince customers they are just as good as national brands?

Product--Warranties • Warranties o Assurance by the seller that the product is as it is represented to be or that it will be as it is promised to be. o A certain level of performance is expected from all products; however, some products may not meet customer expectations. o What steps will the business take to “back up” the products and ensure customer satisfaction? o Customer satisfaction is important for return customers.

Product--Quality • Level of quality of the products or the business relates to customer’s perception of product value. o If the customer perceives higher quality, a higher price will be accepted. o Interpretation of customer perceptions must be accurate to succeed with higher prices.

Product—Business Image • Business image is the mental picture customers have of the business. • How do you want customers to “view” your business? o Discount (Wal-Mart): Image is built on “low prices everyday. ” o Popular-priced (Target, Marshall’s): Image is built on the concept of quality designer brand merchandise at lower prices. o Exclusive (Nordstrom’s): Image is built on the superiority of the products carried by the business. o Specialty (Victoria’s Secret): Image is built on the single brand or single type of merchandise carried.

Product—Research and Development • Product research and development is necessary in order to remain competitive. • An organization must consistently strive to improve products and services for customers and to keep up with trends, technology and customer spending patterns.

Product—Positioning • Positioning of a business is the perceived standing of a business or its product in the minds of its customers as compared to the competition. • This perception will help the customers decide where to spend their money.

PRICE The amount of money a business charges customers for its goods and services

PRICE---Setting the Price • Price setting: What are the pricing goals? o Price below the competition? or o Ensure a 15% (or some other established rate) profit? or o Just break even?

Price---Terms of Sale • Terms of a sales are the conditions of purchase and payment, which are sometimes negotiated between suppliers and buyers. These will affect the price charged. o When does the bill have to be paid in full? o Who will pay shipping charges? (This is a important issue with online sales. )

Price---Discounts • Discounts are reductions in the price of goods, which are negotiated in some situations. o Seasonal discounts are given for buying products during the off-season. o Quantity discounts are for buying in large quantities. o Cash discounts may be allowed for paying the bill early.

PLACE Considerations in getting the product or service in the right location at the right time

Place---Channels of Distribution • Channels of distribution from the manufacturer to the customer o The usual channel of distribution goes from manufacturer to wholesaler to retailer o How will your product get from the manufacturer to your customer? From manufacturer To Wholesaler To Retail Store

Place---Exclusive Rights Specific stores Is this product sold anywhere else? Do you need to sell snow shoes in Atlanta, Georgia. Does this business have exclusive rights to distribute the product? Some products, like Yankee Candles and Snow Babies, require retailers to sign a licensing agreement to distribute these items. You must abide by the guidelines of the distributor as to placement and putting their items on sale. If you do not adhere to the specified guidelines, you will lose your licensing agreement.

Place---Transportation What carrier will be chosen to move the products? Remember, the more people that touch the product between the manufacturer and the consumer, the higher the cost of the product will be to the final customer. Common carrier: Provides transportation services for any business in its operating area for a fee. Examples include: • UPS • Federal Express • DHL

Place---Transportation Contract carrier: For-hire carriers that provide equipment and drivers for specific routes according to contracts between the carrier and the shipper. Examples include: • AA Cargo (airline) • DHX (airline in Hawaii) • CSX Railroad Transportation • Norfolk Southern (NS) Railroad Private carrier: Transports goods for an individual business. Equipment can be purchased or leased to meet the specific transportation needs of the business. • Blue. Max Trucking

PROMOTION The various forms of communication that marketers use to INFORM, PERSUADE, and REMIND customers of their product or service

Promotion---Types of Promotion • Advertising - Non-personal promotional messages paid for by an identified sponsor. • Personal Selling - Communication between a salesperson and a customer intended to influence the customer’s buying decision. • Publicity - Information about a business or its products distributed through the media at no cost to the business.

Promotion---Types of Promotion • Sales Promotion - All promotional activities other than advertising, personal selling, publicity, and public relations designed to stimulate sales and sales effectiveness.

Promotion • As a new business owner, you must use a combination of these types promotion types in order to reach your customers giving consideration to the following: o How many people will you reach with each type? • Do more people watch television ads or read the newspaper? • Which magazine would reach the largest number of potential customers? o What is the cost of each type of promotion? • What is the cost of a newspaper ad? • Which time slot is the cheapest and yet still reaches a large audience on television or radio? o What will give you the best return on your promotional investment? • The bottom line is where can you promote your business to reach the most customers for the best price?

Review of the FOUR P’S of the Marketing Mix • PRODUCT - The goods and services a business will offer to its customers • PRICE - The amount of money a business charges customers for its goods and services • PLACE - Considerations in getting the product or service in the right location at the right time • PROMOTION - The various forms of communication that marketers use to inform, persuade and remind customers of their product or service