Developing Your Marketing Mix Chapter 18

What is a Marketing Plan? Used to communicate a product to the customers: Used to communicate a product to the customers: Shows competitive advantage Shows competitive advantage Explains value proposition (benefits vs. price) Explains value proposition (benefits vs. price) Example: Disney Vacations, Satellite TV Example: Disney Vacations, Satellite TV Market Driven- All decisions are based on the market. Market Driven- All decisions are based on the market.

4 Steps of Developing a Marketing Plan Consumer Analysis Consumer Analysis Market Analysis Market Analysis Ex. Nielsen ( Development & Combination of the Marketing Mix (4P’s) Development & Combination of the Marketing Mix (4P’s) Break –even analysis Break –even analysis

Step One: Consumer Analysis (Profile) Market Segmentation: Consumers who have a similar response to a certain type of marketing. Market Segmentation: Consumers who have a similar response to a certain type of marketing. Example: Volvo – Target’s women with young children – “Safety” Example: Volvo – Target’s women with young children – “Safety” Surveys and Questionnaires Surveys and Questionnaires Focus Groups and Product Testing Focus Groups and Product Testing

Step Two: Market Analysis Use Market Segmentation to break down by Psychographics, Demographics, Geographic's, and Buying Characteristics. Use Market Segmentation to break down by Psychographics, Demographics, Geographic's, and Buying Characteristics. Niche Segment: Very small group of customers. Niche Segment: Very small group of customers. Example: Rolls-Royce – Sells low quantity at high prices Example: Rolls-Royce – Sells low quantity at high prices

Step Three: The Marketing Mix Combine the 4P’s (Product, Place, Price, Promotion) Combine the 4P’s (Product, Place, Price, Promotion) Be careful, if you change one “P” it might affect the rest. Be careful, if you change one “P” it might affect the rest. Example: Location of a fur coat store. Example: Location of a fur coat store.

Break-Even Analysis The break-even point (BEP) is the point at which cost or expenses and revenue are equal. The break-even point (BEP) is the point at which cost or expenses and revenue are equal.

Break-Even Analysis

Marketing Mix | 4 P’s of Marketing Marketers use different tools in order to get the desired response from the customer or best satisfy their needs. These tools are known as The Marketing Mix. Marketers use different tools in order to get the desired response from the customer or best satisfy their needs. These tools are known as The Marketing Mix. Marketing Mix is probably the most famous term in marketing. Marketing Mix is probably the most famous term in marketing.marketing

Marketing Mix The important thing to note is that all these four P’s (variable) are controllable, subject to internal and external constraints of marketing environment. The important thing to note is that all these four P’s (variable) are controllable, subject to internal and external constraints of marketing environment. Marketers, using different blends of these variables, can target different group of customers having different needs. So, a customer may call marketing mix “the offering”. Marketers, using different blends of these variables, can target different group of customers having different needs. So, a customer may call marketing mix “the offering”.

Marketing Mix

Pricing Strategies Penetration Strategy: Initial low prices to gain market share Penetration Strategy: Initial low prices to gain market share Example: Low Airline Prices, Wal-Mart Example: Low Airline Prices, Wal-Mart Skimming Strategy: High initial prices to recoup costs Skimming Strategy: High initial prices to recoup costs Example: Plasma TV’s Example: Plasma TV’s Meat Beat the Competition: Match what competitors are doing (Wal-Mart Article) Meat Beat the Competition: Match what competitors are doing (Wal-Mart Article)

Pricing Strategies Keystoning: Doubling the COGS to arrive at the retail price. Keystoning: Doubling the COGS to arrive at the retail price. Example: You pay $2 for a bracelet and sell is for $4 Example: You pay $2 for a bracelet and sell is for $4 Cost-Plus: Figure costs and then add profit Cost-Plus: Figure costs and then add profit

Pricing Strategies Value Pricing: Find the balance between quality and price. Value is NOT the same as cheap! Value Pricing: Find the balance between quality and price. Value is NOT the same as cheap! e.g. Some customers will pay extra for prompt delivery. (Fed-X) e.g. Some customers will pay extra for prompt delivery. (Fed-X) Customers assign a personal value to a product or service e.g. a teenager is willing to pay a premium price for a concert performed by his idol. Customers assign a personal value to a product or service e.g. a teenager is willing to pay a premium price for a concert performed by his idol.