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Introduction to IT - Marketing Mix Concept

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Adam Naaman

on 22 May 2015

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Transcript of Introduction to IT - Marketing Mix Concept

MARKETING
MIX
Product
Place
Promotion
Price
MARKETING MIX?
The
Marketing Mix
refers to a set of actions or tactics that a company uses to promote its brand or product in the market.
Understanding the concept of 'Marketing Mix'.
These include PRODUCT, PLACE, PRICE AND PROMOTION
LEARN MORE!
PRODUCT
What is a product?
A Product is 'anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.

Services can also be a form of product that consists of activities, benefits or satisfactions offered for sale.
The New Product
Development
Process
Idea Generation
Idea Generation

is the systematic search for new product ideas.
Major sources of new product ideas include
Internal Sources
and
External Sources
.
Internal Idea Sources
- Employees
- Customers
- Research and Development (R&D)
External Idea Sources
- Distributors and Suppliers
- Competitors
- Online Collaborative Communities
Idea Screening
Idea Screening
helps
spot good and bad ideas.
The company then uses this information to evaluate the ideas against set criteria.
Concept Development &
Testing
Concept Development
is the

develop the new product into alternative product concepts that best match customers needs and choose the most popular concept.

Example:
Concept 1: More affordable
Concept 2: Environmentally Friendly
Concept Testing
is the
testing for new product concepts with groups of target consumers to figure out if the concepts being presented have strong customer appeal.
Marketing Strategy
Development
Marketing Strategy Development
is
the designing of an initial marketing strategy for the new product based on the Products concept.
(The idea that consumers favour, products that offer most quality, performance and features).

There marketing strategy statement consists of 3 parts.

Target Market:
The planned value proposition, sales, market share and profit goals.
Products planned Price, Distribution, Marketing Budget.
Planned Long Run Sales, Profit Goals and Marketing Mix Strategy.
Business Analysis
Business Analysis
involves a
review of its sales, costs and profit predictions for a new product to find out if it met the satisfactions of the company objectives
. If these satisfactions are met then the product can move onto the Development Stage.
Product Development
Product Development
is the
process in which it becomes a physical product
. This product development stage involves more than one physical test to ensure it performs up to the customers standards.
Test Marketing
Commercialisation
Test Marketing
is the stage at which the product and marketing program are introduced to a realistic marketing environment where it provides the company to test the product by targeting and positioning, advertising, distribution, pricing, branding and packaging and budget levels.
Commercialisation
is
the introduction to a new product into the market.
This involves in determing timing to introduce a new product on the market. this can be determined by many factors such as if the product requires to be improved given that another product has been launched recently with the same qualities or if the economy is down the company will then have to wait the following year.

Another Factor to determine is the location to launch the new product.
The Product Life Cycle is a set of 5 stages that a product goes through during its lifetime.
PRODUCT
LIFE
CYCLE
STAGES
-
Product Development
This stage begins when the company discovers and develops a new-product.
During this stage there are no sales but the company's investment costs increase.
Introduction
This stage is when the product is introduced to the market and we see the start of slow sale growth.
Growth
The third stage is when there is a period of rapid product purchases and an major increase in profits.
Maturity
The fourth stage is when there is a slowdown in sales growth because the new product is slightly becoming 'old' in the market as competitors have a more improved product.
Decline
The Final stage is when sales decrease all together and profits drop.
PRICE
What is Price?
Price is the 'amount of money that is charged for a product, service or the sum of the values consumers exchange for the benefits of having or using the product or service'.
MAJOR PRICING STRATEGIES
Customer Value Based Pricing
Customer value based pricing
uses customers perceptions of value as the key to pricing.
This is achieved by looking at the customers needs and wants it then sets the target price based on this perception.
There are
two
types of
value based pricing
:
-
Good Value Pricing

which is the offer of the right combination of quality product and good service at a reasonable price. A popular type of good pricing is EDLP (Every Day Low Pricing) which normally used in retail stores such as Woolworths and Coles.
-
Value added Pricing
is the option where instead of cutting prices to match competitors, marketers adopt this strategy to differentiate their products and this supports the high prices.
Cost Based Pricing
Cost based pricing is
the process of setting prices based on the amount of producing, distributing and selling the product.
A company's cost is the important element in this pricing strategy.
A company cost consists of two components Fixed Cost and Variable Costs.
Fixed Costs (Overhead)
are costs that do not change with production or sales.
Variable Costs
are costs that vary with production.
Cost Plus Pricing
is the more simple method which the addition of standard markups to the cost of the product.
Competition Based Pricing
Competition based pricing is
when prices are set based on competitors strategies, costs, prices and market products
. This leads consumers to act on their own judgement of which product price they will accept.
LETS LEARN MORE ABOUT DIFFERENT PRICING STRATEGIES SHALL WE!
Placement
What is Placement?
Placement is
the distribution, location and strategies of making the product accessible to the customers.

Major Logistics Functions
Warehousing
The company might decide on storage warehouse or distribution centers. Storage warehouses usually store goods for moderate to long periods. Distribution Centers are chosen to move goods rather than store goods.
Inventory Management
Inventory Management is a balance between carrying a small amount and too much. With a small amount of Inventory distribution carries the risk of not having enough for consumers to buy. Therefore, the process of holding more inventory then necessary eliminates this risk.
Transportation
There are 6 main transportation a company can choose from in distributing products. These include:
1. TRUCKS
2. RAILROADS
3. SEA CARRIERS
4. PIPELINES
5. AIR CARRIERS
6. INTERNET CARRIERS (where digital products are sent to customers by satellite, cable or phones).
Placement Decision

Location, Location, Location!
Central Business Districts
- Heart of the City.

Shopping Centers
- A Group of Retail Business managed as a whole unit.

Strip Shopping Centers
- A Group of Business along an arterial road.

Store Atmosphere
- Physical Layout that suits the target market and invites customers.
Elements that Contribute to finding a location:
Promotion
What is Promotion?
Promotion is the process in which you advertise your product to the world to persuade consumers to buy the product/service you are offering.
PROMOTION MIX
Advertising
- Informative Advertising (New Products)
- Persuasive Advertising (When Competition Increases)
- Reminder Advertising (Product reached Maturity Stage)
Personal Selling
- Most effective tool as it builds customer relationships through personal interaction.
Sales Promotion
- Encourage the purchase or sale of a product or service.
- Coupons, Contests, Cent off deals etc.
Public Relations
- Building a reputation through features, sponsorships and events.
Direct Marketing
- Mail and Catalogues
- Online Marketing
- Telephone
- Radio
Now that you have learned about the Marketing Mix Concept, it is time to put your knowledge to the test with a short quiz.
Q1 – Which of the following are not a Promotion Mix?
A) Skimming
B) Public Relations
C) Direct Marketing
D) Reminder Advertising
Q2 – When a product is made distinctive when compared to its competitors, it is know as:

A) Product Mapping
B) Product Placement
C) Product Promotion
D) Product Differentiation

Q3 – Which following product is in the decline stage of the Product Life Cycle?

A) Smartphones
B) Personal Computers
C) Music CD’s
D) Cinema Tickets
Q6 – What are the four P’s?
Well Done!

Q1 – Which of the following are not a Promotion Mix?
A) Skimming
B)
Public Relations - Correct Answer
C) Direct Marketing
D) Reminder Advertising
Q2 – When a product is made distinctive when compared to its competitors, it is know as:

A) Product Mapping
B) Product Placement
C) Product Promotion
D)
Product Differentiation - Correct Answer

Q4 – Promotion is not intended too:

A) Force Customers
B) Persuade Customers
C) Inform Customers
D) Influence Customers
Q3 – Which following product is in the decline stage of the Product Life Cycle?

A) Smartphones
B) Personal Computers
C)
Music CD’s - Correct Answer
D) Cinema Tickets
Q4 – Promotion is not intended too:

A)
Force Customers – Correct Answer

B) Persuade Customers
C) Inform Customers
D) Influence Customers
Q5 – What are the eight steps involved in product development?
Q6 – What are the four P’s?
Correct the Answer is Product, Price, Placement and Promotion.
Correct Answer is idea generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development, test marketing and commercialisation.
Q5 – What are the eight steps involved in product development?
Thank You
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
References
Armstrong, G, Stewart, A, Denize, S and Kotler, P 2011, Principles of Marketing, 5th edn, Pearson Australia
Lambardo, J 2013, Pricing Strategies, 1 December, online video, viewed 18th May 2015, https://www.youtube.com/watch?v=XBmWEduod5k-
Gross, S 2011, What is the Marketing Mix?, 17 August, online video, viewed 13th May 2015, https://www.youtube.com/watch?v=MLmsJEz3GD4-
Full transcript