Marketing and the Competitive Environment Designing an Effective Marketing Mix

1. Marketing and the Competitive Environment Designing an Effective Marketing Mix “You can hype a questionable product for a little while, but you’ll never build an enduring business.” Victor Kiam “If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” Jeff Bezos “In general, my children refused to eat anything that hadn’t danced on TV.” Erma Bombeck 2.14 Designing an Effective Marketing Mix

2. Designing an Effective Marketing MixIn this topic you will learn about: • Influences on the marketing mix • The importance of an integrated marketing mix 2.14 Designing an Effective Marketing Mix

3. Influences on the marketing mix The traditional marketing mix is the combination of variables through which a firm achieves its marketing objectives. Commonly, these are called the 4Ps: • Product • Price • Promotion • Place However, the extended marketing mix takes into account other important variables that particularly affect services to make the 7Ps: • People • Process • Physical evidence 2.14 Designing an Effective Marketing Mix

4. The marketing mix – the 7Ps You will need access to the internet to watch this clip The marketing mix at Cadbury’s: Cadbury’s advert ready for take off. Does the product speak for itself so the advert doesn’t have to? Provides information on the marketing mix at Cadbury’s plus activity 2.14 Designing an Effective Marketing Mix

5. Influences on the marketing mix PRODUCT The goods and services that the firm provides. Goods are physical or tangible products. You can touch them – a car or a television. Services are often non physical or intangible. They cannot be touched – financial consultancy or teaching. We will look at product in Section 2.15 2.14 Designing an Effective Marketing Mix

6. Influences on the marketing mix PROMOTION Activities designed to increase visibility and sales of a product. Firms use different promotional strategies to make their products more widely known to other businesses and the general public. We call this the promotional mix. We will look at promotion in Section 2.16 2.14 Designing an Effective Marketing Mix

7. Influences on the marketing mix PRICE How much a firm will charge for the product being sold. Firms use different pricing strategies to price their products, taking into account a number of factors such as market research and the state of the economy. We will look at price in Section 2.17 2.14 Designing an Effective Marketing Mix

8. Influences on the marketing mix PLACE The means by which the product will be distributed. Where will the customer be able to buy the product? We will look at place in Section 2.18 2.14 Designing an Effective Marketing Mix

9. Influences on the marketing mix The 7Ps Although not specifically stated in the AQA specification these can help to answer questions on service sector firms. The AQA exams may be based on firms in the tertiary sector: People – customer service is extremely important in today’s service sector in the UK. Staff must be appropriately trained, motivated and show good communication skills when dealing with customers. Process – the interrelated tasks and systems in place that help to achieve the marketing objectives. Physicalevidence – the proof that the firm can provide the service required. With no physical product the firm can produce case studies and demonstrations showing the quality of service that they provide. 2.14 Designing an Effective Marketing Mix

10. Influences on the marketing mix The following are companies from 5 different industries: • Arsenal (or club of your choice) • Johnson’s Dry Cleaners • Innocent Smoothies • Harrods • Gregg's the bakers For each company make a list of the 7Ps prioritising which is the most important all the way down to which is the least important. Justify your decisions. Produce an A4 poster for one of the companies to show this information. 2.14 Designing an Effective Marketing Mix

11. Influences on the marketing mix The most important element of the marketing mix is the product. However, students should understand that different elements of the marketing mix have differing levels of importance for different firms and at different times. Whilst price is clearly more important to a firm such as Aldi compared to Marks and Spencer it should be noted that price has become more important to M&S in credit crunch Britain. In the BUSS2 exam it is important that you discuss the significance of each P in relation to the firm in the case study. An answer regarding Aldi will have a different emphasis than one about M&S. 2.14 Designing an Effective Marketing Mix

12. Influences on the marketing mix There a number of factors that might influence the marketing mix for a firm: • The market and market research – competitors and target market segments • Finance – what budget does the company have available? • People – what are the skills of the people within the firm? • Newtechnology – what technology is available to the firm? • The state of the economy – what stage of the economy is the business cycle at? Take one element of the marketing mix. How does each of the above factors affect your chosen P at Marks and Spencer? 2.14 Designing an Effective Marketing Mix

13. The importance of an integrated marketing mix An integrated marketing mix means that all elements of the marketing mix are dependent upon and complementary to each other. PRODUCT PROMOTION PRICE PLACE 2.14 Designing an Effective Marketing Mix

14. The importance of an integrated marketing mix This means that any event with one element of the marketing mix will have an impact on all other elements: A high price is likely to mean that the firm is using a premium product to target a wealthier market segment. The product will be promoted to a specific market and will be located or placed in locations that are visited by this target market. Alternatively, a low price may be targeted at a mass market with a no-frills product. Promotion might be through mass media and the product will be placed at locations that are easily accessible and where there are mass sales e.g. supermarkets. 2.14 Designing an Effective Marketing Mix

15. Activity – Marks and Spencer You will need access to the internet to watch this video clip Watch the following video clip You have been called in by Marks and Spencer as a management consultant. They are facing challenging conditions with the current downturn in the UK economy and are looking to adapt their marketing mix due to lower sales. You have been asked to come up with suggestions that will boost sales through changes to the 4Ps at Marks and Spencer. For each P give a suggestion as to how the company can improve taking into account the current economic climate. 2.14 Designing an Effective Marketing Mix