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Makingthebusinesseffective

Theme1:Section1.4.3Themarketingmix

Keyelementstothistopic

Workingwiththemarketingmix

Theelementsofthemarketingmix

Whatisthemarketingmix?

Howabusinesscombinesitsproductanditsprice,

andusespromotionandtheplaceofsaleinordertobe

successful

Differentaspectsofusingthemarketingmix

ElementsofthemarketingMix

Balancingthemarketingmix

Impactsofchangingcustomerneeds

Impactsoftechnologyonthemarketingmix

MarketingMix– theelements

InorderInordertosuccessfullyselltheproducttothecustomerabusinesswillneedtousemarketing.Theelementsthatmakeupthismarketingmixareoftenknownasthe4Psandaresummarisedinthetablebelow:

Marketingelement DescriptionProduct ThegoodorservicethatthecustomerobtainsPrice Howmuchthecustomerispayingforthe

productPromotion Howthecustomerisfoundandpersuadedto

buytheproductPlace Howtheproductisdistributedtothecustomer

LinkingtheElements

Eachoftheelements(4Ps)ofthemarketingmixwillaffecttheotherelementssotheyneedtobecombinedliketheingredientsinacake.Someexamplesaregivenbelow:

Inmostcasesthefailuretoaddressanyoneoftheelementswillleadtothefailureoftheproduct.

• Highqualitymaterialsusedinaproduct canmeanthatahigherprice isobtainable

• Aneworimprovedproductneedspromotionifpotentialcustomersaretobeawareofit

Marketingemphasis

Whichofthe4Psisthemostimportantwillvarydependingwhatproductorserviceisbeingprovided.

Discusswhichoneoftheelementsofthemarketingmixisthemost importantforeachoftheboxesinthetable

Marketingemphasis(continued)

Youmayhavecomeupwithanswerssimilartothefollowing:

Youmayhoweverhavedifferentanswersdependingonwhetheryouweretakingalongtermorshorttermview.Themarketsituationforeachindustrywillalsoaffecttheirmarketingpriorities.

Justaminute

Youhave60secondstonotedownhowyourmarketingwouldbeaffectedifyouwererunninga

businesswherethereisnocomptition

Nocompetition

Anybusinesswillbetryingtoreachasituationwhereithasnocompetition.Thiscanbeachievedindifferentways.Theymaybetheonlybusinessinasmallareaortheymaybetheonlybusinessthatisallowedtoproduceaproductorservicebecausetheyhaveapatentorcopyright.Therearebenefitsanddrawbacksofthissituationandaffectsontheirmarketingpolicy:

Marketing Element Effectofnocompetition

Product

PricePromotion

Place

AssaleswillbegoodthereislittleincentivetodevelopneworimprovedproductsandqualitymayalsosufferThis canbequitehighandprofitsshouldbegoodOncecustomersareawareofthebusinessthentheremaybelittleneedtospendonpromotionThismightbefixedthroughthelocation ofthebusinessbutaccesstotheproductorservicemaybemoretosuittheconvenienceoftheproducerthanthecustomer

Competition

Ifabusinessissuccessfulitwillmakeaprofit.Ifitmakesalotofprofitthenotherbusinesswillwantashareandwilllooktoenterthemarket,evenifitisquitelocal.Insomecasesthesemaybeothersmallbusinessesbutoftentheymaybelargenationalandmulti-nationalfirmswithconsiderableresources.

Marketing Element EffectofcompetitionProduct

Price

Promotion

Place

TherewillneedtobeconstantdevelopmentoftheexistingproductsanddevelopmentofnewQualityandconsumerservicewillbeveryimportantandbeingdifferentisessential.Reductionofpricetoremaincompetitiveagainstrivalbusinesses.Mayresultinpricewar.Profitsmaydecrease.Increaseinpromotionandadvertisingtokeepexistingcustomersandattractnewones.Greaterfocusonthecustomer’srequirementswhichmightincreasedistribution oropeningcosts.

GrowthoftheCaféCulture

TheinteractivemapintheTelegrapharticleshowsthegrowthofthecoffeeshopmarketfrom2010to2015.

AsanationBritonsspent£7.9bn incoffeeshopsthisyear.

BrandssuchasCosta,StarbucksandCaféNerodominatethemarket.

Withincreaseincompetitionfromestablishedlargechains,independentshopsarehavingtobemorecreativewiththeirmarketingtopenetratethemarket

BetheBusinessAdvisor

Youareapproachedbyasmall,independentcoffeeshopwhoarekeentosetupinyourlocalarea.TheywouldlikeyouradviceonhowtheycouldsuccessfullycompeteagainstthelikesofCostaandStarbuck.

Usethe4’psofthemarketingmixtostructureaplan,giveexamplesofwhat

theyshoulddoandoutlinewhichelementofthemarketingmixyouconsiderwillbe

themostimportanttothem

ConsumerTrends

Recentconsumertrendsinclude:• Increaseinonlineshopping• Useofsmartphonesandapps• Morehealthconsciousconsumers• Increaseduseofpricecomparisonsites

andproductreviews• Wideninguseofsocialmedia• Creditspendingincreasing• Brexitinfluencingpurchasingdecisions

Thesetrendswillaffectallelementsofthemarketingmix,whatproductsareproduced(moretechnology),price(morecompetitive),promotion(socialmedia)andplace(e-commerce)

Marketingwillchangeastheneedsoftheconsumerchange.Notonlywilltheproductsandservicesthattheydemandchangebutsowillthewaytheyfindoutaboutandmaketheirpurchases

DigitalTechnologyande-commerce

• Digitaltechnology iswherebusinessesusecomputerbasedtools,systems,devicesandresourcestogenerate,storeorprocessdata. Ithasmanyaspectsincludingsocialmedia,onlinemultimedia,productivityapplications, cloudcomputing,e-commerceandcommunication.

• E-commerce isthebuyingandsellingofgoodsandservicesusingtheinternet.Themorerecentdevelopmentism-commerce, whichisusingwirelesshandheld(mobile)devices,suchassmartphones.

Justaminute

Youhave60secondstonotedowndifferentusesofdigitaltechnology

foreachoneofthe“4Ps”

Digitalmarketing

• Product– digitaltechnologyhasledtoawholerangeofproductssuchassmartphones,tablets,andsmartTVs.Ithasincreasedproductqualityandallowednewcustomerexperiencese.g.3Dfilmsandvirtualreality

• Price– technologyhasdecreasedpricesthroughreducedcostsofproduction.Ithasalsoincreasedcompetitionthroughe-commerceandinternationalcompetition.Thiscompetitionhasbeenincreasedthroughpricecomparisonsites.

Allelementsofthemarketingmixhavebeenaffectedbydigitaltechnology.Someexamplesaregivenbelow:

Takingadvantageofthebenefitsofdigitaltechnologybasedpromotionsareallpossibleforasmallbusinessesbutallhavecosts,initialandongoingintermsofkeepingthetechnologyrequirementsuptodate.

• Promotion– advertisingnowmakesmuchuseofwebsites,socialmediaandincreasinglyispersonalisedattheindividualuser.Customerdatabasesallowtargetedpromotionsandcanbelinkedtopurchasesmade.

• Place– e-commerceallowscustomerstoaccessmanyproductsfromanywhereintheworld.Shoppingonlineisa24/7experience.Thishasledtodeclinesinphysicalretailoutletsformanyproductsandservices.

Digitalmarketing

Contextcorner

Explainthemarketingbenefitsofdigitaltechnologytoeachoneofthebusinessespicturedabove

Hiut Denim posted a limited run of fashion jeans on Instagram and sold out within 24 hours

ShadowRobotisanartificialhandthatthinksforitselfwithover20

movements

K N WO L E D G E

C H E C K

Questions

1. Listthe4Psofthemarketingmix2. Stateoneeffectonpriceifthereisno

competitionforabusiness3. Stateonewayabusinesscouldusedigital

technologytopromotesitsbusiness4. Stateonebenefittoabusinessofusinge-

commerce

Suggestedanswers

1.Listthe4PsofthemarketingmixProduct,price,place,promotion2.StateoneeffectonpriceifthereisnocompetitionforabusinessPriceislikelytobehigher3.Stateonewayabusinesscouldusedigitaltechnologytopromotesitsbusinesse.g.Useofwebsite,socialmedia,customerdatabases4.Stateonebenefittoabusinessofusinge-commercee.g.Customersfromanywhereinworld,accessible24/7,noneedforretailoutletssocostsdecrease