1. Marketing Marketing Planning

2. Content Marketing Mix: –Product –Price –Place –Promotion Elasticity of demand Marketing budget Sales Forecasting

3. Marketing Mix The marketing mix or the 4Ps are the key elements of a businesses marketing plan The marketing mix refers to: –Product –Price –Place –Promotion

4. Product Product refers to what the business sells This could be a good – tangible or a service – intangible Products are composed of different features which help consumers identify them e.g. their size, their colour Products need to be developed to meet customer needs and wants

5. Price Price refers to how much consumers are charged for a product There are different strategies for different types of products: –Price skimming (new products) Price is initially high due to type of product (usually electrical, luxury, innovative) –Price penetration (new products) Price starts at a lower price to gain market share

6. Price Pricing strategies for existing products: –Price leader – dominant firms in the market are able to set the price for the rest of the market –Price taker – these firms accept the price that the price leaders set –Predator – predatory pricing is where businesses undercut competitors to drive them out of the market and gain market share

7. Pricing methods Cost based – businesses work out how much products will cost to make, they then add a profit margin on to this to calculate price Contribution – Prices are calculated by looking at how much they contribute to variable costs Discriminatory – Where businesses can charge different prices to different consumers for the same product e.g. peak and off peak travel

8. Pricing Tactics Loss leader – Businesses have products priced at a low level where they will make a profit, this encourages customers into the business where they will buy additional products Psychological – Where businesses use prices such as £9.99 as they seem to be cheaper

9. Place Place refers to physical location and channels of distribution Channels of distribution – how a product gets from the producer to the consumer There are four main channels of distribution: –1. Producer – consumer – this is generally used for small businesses e.g. farm shop

10. Channels of Distribution cont.. 2. Producer – Wholesaler – Consumer – Here the wholesaler acts as an intermediary for the producer and is able to carry a number of different producers products e.g. furniture 3. Producer – Wholesaler – Retailer – Consumer- This is common for clothes 4. Producer – Retailer – Consumer – this is often used for electrical products

11. Channels of Distribution Each link in the chain of distribution adds costs onto the final product and makes it more expensive for the end consumer Wholesalers and retailers can provide important functions for producers especially as they grow larger By using wholesalers and retailers businesses can loose control over the promotion of their products

12. Location Businesses need to consider a number of factors when considering their location including: –Historical factors –Cost of premises –Space and land –Transport links –Proximity to suppliers / customers

13. Promotion Promotion is the way of communicating what the product is to the consumers It aims to persuade customers to buy the product Above the line promotion – Advertising that uses independent media Below the line promotion – Sponsorship, Public Relations, Direct Mail, Special offers

14. Advertising Advertising can be done using a variety of media including: –TV – local, national, sky, digital –Radio – local, national –Press – newspapers, magazines, local, national, specialist press Type of advertising media is dependent on: –Cost –Target Audience

15. Sponsorship Individuals, events or teams are sponsored by organisations to increase company recognition and sales Businesses often choose individuals / teams / events that have a similar target audience and similar ethos to themselves E.g. David Beckham and police sunglasses, 3 day eventing and land rover

16. Sales promotions These are ways to boost sales e.g. BOGOF – buy one get one free, 20% extra free These are used to boost short term sales

17. Public relations Where businesses have contact with the media to send out specific messages about the firm / its product This is free advertising Sometimes public relations can backfire for a business

18. Personal Selling This is where a product is being promoted in a face-to-face situation The product is promoted by a salesperson whose aim is to increase sales of the product This often happens in the financial services industry

19. Direct mail This is where mailshots are sent directly to customers These can be sent via mail, text or email As customer profiling techniques become more sophisticated mail shots are increasingly targeted E.g. Tesco club card send vouchers to their customers based on their purchasing patterns and segmentation analysis

20. Elasticity Elasticity measures how responsive demand is to a change in price / income PED = % change in quantity demanded / % change in price YED = % change in quantity demanded / % change in income Inelastic – less responsive to a change in price / income Elastic – more responsive to a change in price / income

21. Elasticity If YED / PED is greater than 1 it is elastic If YED / PED is less than 1 it is inelastic If YED / PED is 1 it is neither elastic or inelastic To increase revenue for elastic goods you decrease price To increase revenue for inelastic goods you increase price

22. Elasticity Elastic goods tend to be: –Luxuries –Many substitutes –Take up a large % of income Inelastic goods tend to be: –Necessities –Few substitutes –Take up a small % of income –Goods with strong brands

23. Marketing Budget A marketing budget sets out the costs and revenues that are allocated to the marketing department The marketing budget will influence the promotional tools that a business is able to utilise

24. Sales forecasting Sales forecasting – looks at what they expect their sales to be Can use market research to forecast expected sales Past sales figures are a good prediction of new figures

25. Summary Marketing Mix looks at the 4Ps Product – refers to the good / service the business sells, it is made up of a number of features Price – how much you charge for the product, can use different strategies depending on type and age of product and company size Place – location of business and channels of distribution – how the product gets to the consumer Promotion – how customers find out about the product – there are two types above and below the line Elasticity – measures responsiveness of demand to a change in price / income Market budget – sets financial targets for the marketing department Sales forecasting – aims to predict sales and therefore revenues for a new product