The marketing mix:

Marketing mix refers to the different elements involved in the marketing of a good
or service- the 4 P’s- Product, Price, Promotion and Place.

Product
Product is the good or service being produced and sold in the market

𝙏𝙮𝙥𝙚𝙨 𝙤𝙛 𝙥𝙧𝙤𝙙𝙪𝙘𝙩𝙨 𝙞𝙣𝙘𝙡𝙪𝙙𝙚:

𝘾𝙤𝙣𝙨𝙪𝙢𝙚𝙧 𝙜𝙤𝙤𝙙𝙨: These are goods which are bought by consumers for their own

𝙘𝙤𝙣𝙨𝙪𝙢𝙚𝙧 𝙨𝙚𝙧𝙫𝙞𝙘𝙚𝙨: these are services that are bought by consumers for their
use.

𝙋𝙧𝙤𝙙𝙪𝙘𝙚𝙧 𝙜𝙤𝙤𝙙𝙨: these are goods that are produced for other businesses to use.
own use. Examples repairing cars and hair hairdressing.

𝙋𝙧𝙤𝙙𝙪𝙘𝙚𝙧 𝙨𝙚𝙧𝙫𝙞𝙘𝙚𝙨: these are services that are produced to help other
Example machinery and trucks.

businesses example include insurance and advertising agencies.

What makes a successful product?

A successful product meets customer needs, wants, and expectations while delivering
value, quality, and affordability. To achieve this, businesses must understand
their target audience's desires and preferences through market research and
feedback.

Additionally, a successful product solves a genuine problem or improves lives,

offering a unique solution or enhancement. Pricing must be competitive, balanced
with revenue goals and customer affordability. Differentiation from existing
products through a unique selling point.

Efficient production helps keep costs low without reducing quality. Prices should
match what customers are willing to pay, By focusing on these things, businesses
can create products that satisfy customers, stand out in the market, increase sales
and growth, and strengthen brand loyalty and reputation.

This leads to increased customer satisfaction, positive word-of-mouth, and improved

market share. By prioritizing customer needs, quality, and affordability,
businesses develop successful products that resonate with their target audience.

New Product Development: development of a new product by a business. The process:

1. Generate ideas: the firm generates new ideas using customer suggestions,
competitors’ products, employees’ ideas, sales department data and the information
provided by the research and development department
2. Select the best ideas for further research:the firm decides which ideas to
abandon and which to research further. If the product is too costly or may not sell
well, it will be abandoned
3. Decide if the firm will be able to sell enough units for the product to be a
success:this research includes looking into forecast sales, size of market share,
cost-benefit analysis etc. for each product idea, undertaken by the marketing
department
4. Develop a prototype: by making a prototype of the new product, the operations
department can see how the product can be manufactured, any problems arising from
it and how to fix them.
5. Test launch: the developed product is sold to one section of the market to
see how well it sells, before producing more, and to identify what changes need to
be made to increase sales.
6. Full launch of the product: the product is launched to the entire market
Why is brand image important?

Brand image is an identity given to a product that differentiates it from

competitors’ products.
Brand loyalty is the tendency of customers to keep buying the same brand
continuously instead of switching over to competitors’ products.

~ Helps differentiate the company’s product from another.

~ If there is an established high brand image, then it is easier to charge high
prices because customers will buy it nonetheless.
~ Easier to launch new products into the market if the brand image is already
established. Apple is one such company- their brand image is so reputed that new
products that they launch now become an immediate success.

Why is packaging important?

• It protects the product

• It provide information about the product (its ingredients, price,
manufacturing and expiry dates etc.)
• To help consumers recognize the product (the brand name and logo on the
packaging will help identify what product it is)
• It keeps the product fresh

Product Life Cycle (PLC)

First, a product is developed. Then it is introduced or launch into the market.
Sales will grow slowly as most of the customers are not aware of its existence.
Advertising is used until the products become known. Sales started to grow rapidly.
prices are reduced as new competitors have entered the market. At maturity stage,
competitors become intense and price strategy is now competitive. A lot of
advertising is used to maintain sales growth. Sales reach saturation point profits
start to fall as sales are static and pricing have reduced.
Product have reached declined stage, as a new product comes along or the product
have lots its appeal. The product declines because more innovative products have
introduced our customer taste have changed.

Price
Price is the amount of money producers are willing to sell or consumer are willing
to buy the product for.

Different methods of pricing:

Market skimming: Setting a high price for a new product that is unique or very
different from other products on the market.

Advantages:
• Profit earned is very high
• Research and development costs will recover quickly.

Disadvantage:
• It may backfire if competitors produce similar products at a lower
price

Penetration pricing: Setting a very low price to attract customers to buy a new
product

Advantages:
• Attracts customers more quickly
• Can increase market share quickly
Disadvantages:
• profit earned is very low
• Cannot recover research and development cost development costs quickly

Competitive pricing: Setting a price similar to that of competitors’ products which

are already available in the market

Advantage:
• Business can compete on other matters such as service and quality

Disadvantage:
• Still need to find ways of competing to attract sales.

Cost plus pricing: Fix amount is added to the cost of producing a product or
service.

Advantages:
• Quick and easy to work out the price
• Makes sure that the price covers all of the costs

Disadvantage:
• Price might be set higher than competitors or more than customers are
willing to pay, which reduces sales and profits

Loss leader pricing/Promotional pricing: Setting the price of a few products at

below cost to attract customers into the shop in the hope that they will buy other
products as well

Advantages:
• Helps to sell off unwanted stock before it becomes out of date
• A good way of increasing short term sales and market share

Disadvantage:
• Revenue on each item is lower so profits may also be lower

price skimming: Is where a high price is set for a new product on the market.

Advantage:
• Skimming can have established the product as being of good quality.
• If the product is unique, high price will lead to profits.

Disadvantage:
• Still High price may discourage some customer from buying it.

Factors that affect what pricing method should be used:

- Is it a new or existing product?If it’s new, then price skimming or penetration
pricing will be most suitable. If it’s an existing product, competitive pricing or
promotional pricing will be appropriate.
- Is the product unique?If yes, then price skimming will be beneficial, otherwise
competitive or promotional pricing.
- Is there a lot of competition in the market?If yes, competitive pricing will need
to be used.
- Does the business have a well-known brand image?If yes, price skimming will be
highly successful.
- What are the costs of producing and supplying the product?If there are high
costs, costs plus pricing will be needed to cover the costs. If costs are low,
market penetration and promotional pricing will be appropriate.
- What are the marketing objectives of the business?If the business objective is to
quickly gain a market share and customer base, then penetration pricing could be
used. If the objective is to simply maintain sales, competitive pricing will be
appropriate.

Price Elasticity
The PED of a product refers to the responsiveness of the quantity demanded for it
to changes in its price.

PED (of a product) = % change in quantity demanded / % change in price

When the PED is >1, that is there is a higher % change in demand in response to a
change in price, the PED is said to be elastic.When the PED is <1, that is there is
a lower % change in demand in response to a change in price, the PED is said to be
inelastic.
Producers can calculate the PED of their product and take suitable action to make
the product more profitable.
If the product is found to have an elastic demand, the producer can lower prices to
increase profitability. The law of demand states that a fall in price increases the
demand. And since it is an elastic product (change in demand is higher than change
in price), the demand of the product will increase highly. The producers get more
profit.If the product is found to have an inelastic demand, the producer can raise
prices to increase profitability. Since quantity demanded wouldn’t fall much as it
is inelastic, the high prices will make way for higher revenue and thus higher
profits.

Place
Place refers to how the product is distributed from the producer to the final
consumer. There are different distribution channels that a product can be sold
through.

Manufacturer to Consumer: The product is sold to the consumer straight from the
manufacturer.
Manufacturer to Retailer to Consumer: The manufacturer will sell its products to a
retailer (who will have stocks of products from other manufacturers as well) who
will then sell them to customers who visit the shop.
Manufacturer to Wholesaler to Retailer to Consumer: The manufacturer will sell
large volumes of its products to a wholesaler (wholesalers will have stocks from
different manufacturers). Retailer will buy small quantities of the product from
the wholesaler and sell it to the consumers.
Manufacturer to Agent to Wholesaler to Retailer to Consumer: The manufacturer will
sell their products to an agent who has specialized information about the market
and will know the best wholesalers to sell them to.

This is common when firms are exporting their products to a foreign country. They
will need a knowledgeable agent to take care of the products’ distribution in
another country

Promotion
Promotion: marketing activities used to communicate with customers and potential
customers to inform and persuade them to buy a business’s products.

Aims of promotion:
• Inform customers about a new product
• Persuade customers to buy the product
• Create a brand image
• Increase sales and market share

Types of promotion:

Advertising: Paid-for communication with consumers which uses media like

television, radio, newspapers, magazines, billboards, flyers, cinema etc. This can
be informative (create product awareness) or persuasive (persuade consumers to buy
the product).
Sales Promotion: using techniques such as ‘buy one get one free,free after-sales
services, gifts, competitions,free samples etc. to encourage sales.
Below-the-line promotion: promotion that is not paid for communication such as
coupons or vouchers, loyalty reward schemes, competitions and games with cash or
other prizes.
Direct messages : Also known as targeted messaging, involves sending personalized
messages directly to customers.
Sponsorship: payment by a business to have its name or products associated with a
particular event.

Advertising : paid for communication with customers about a product to encourage

them to buy it.

Types of advertising :

Informative advertising: Focuses on educating consumers about a product or service,

highlighting its features, benefits, and value. This type of advertising aims to
inform, rather than persuade, by providing information

Persuasive advertising: Is advertising which is trying to persuade the customers

that they really need the product and should buy it