LEVEL 4 MARKETING PRINCIPLE Task 1 (AC1.1, 1.

2) Explain the various elements of the marketing process and evaluate the benefits and costs of a marketing orientation for a selected organisation

Marketing is a general term used to describe all the various activities involved in transferring goods and services from producers to consumers. In addition to the functions commonly associated with it, such as advertising and sales promotion, marketing also encompasses product development, packaging, distribution channels, pricing, and many other functions. The modern marketing concept, which is applied by most successful small businesses, is intended to focus all of a company's activities upon uncovering and satisfying customer needs. After all, an entrepreneur may come up with a great product and use the most efficient production methods to make it, but all the effort will have been wasted if he or she is unable to consummate the sale of the product to consumers.

Task 2 (AC2.1, 2.2, 2.3, 2.4, 2.5) What are the macro and micro environmental factors that influence marketing and how they may influence marketing decisions.

Macro-marketing refers to the overall social process that directs the flow of goods and services from producer to consumer. It is the economic system that determines what and how much is to be produced and distributed by whom, when, and to whom. E. Jerome McCarthy and William D. Perreault, Jr. identified eight universal macro-marketing functions that make up the economic process:1) buying, which refers to consumers seeking and evaluating goods and services;2) selling, which involves promoting the offering; 3) transporting, which refers to the movement of goods from one place to another; 4) storing, which involves holding goods until customers need them; 5) standardization and grading, which entails sorting products according to size and quality; 6) financing, which delivers the cash and credit needed to perform the first five functions; 7) risk taking, which involves bearing the uncertainties that are part of the marketing process; and 8) market information, which refers to the gathering, analysis, and distribution of the data necessary to execute these marketing functions. In contrast, micro-marketing refers to the activities performed by the individual providers of goods and services within a macro-marketing system. Such organizations or businesses use various marketing techniques to accomplish objectives related to profits, market share, cash flow, and other economic factors that can enhance their well being and position in the marketplace. The micro-marketing function within an entity is commonly referred to as marketing management. Marketing managers strive to get their organizations to anticipate and accurately determine the needs and wants of customer groups. Afterward they seek to respond effectively with a flow of need-satisfying goods and services. They are typically charged with planning, implementing, and then measuring the effectiveness of all marketing activities. Micro-marketing encompasses a number of related activities and responsibilities. Marketing managers must carefully design their marketing plans to ensure that they complement related

production, distribution, and financial constraints. They must also allow for constant adaptation to changing markets and economic conditions. Perhaps the core function of a marketing manager, however, is to identify a specific market, or group of consumers, and then deliver products and promotions that ultimately maximize the profit potential of that targeted market. This is particularly important for small businesses, which more than likely lack the resources to target large aggregate markets. Often, it is only by carefully selecting and wooing a specific group that a small firm can attain profit margins sufficient to allow it to continue to compete in the marketplace. For instance, a manufacturer of fishing equipment would not randomly market its product to the entire U.S. population. Instead, it would likely conduct market researchusing such tools as demo-graphic reports, market surveys, or focus groupsto determine which customers would be most likely to purchase its offerings. It could then more efficiently spend its limited resources in an effort to persuade members of its target group(s) to buy its products. Perhaps it would target males in the Midwest between the ages of 18 and 35. The company may even strive to further maximize the profitability of its target market through market segmentation, whereby the group is further broken down by age, income, zip code, or other factors indicative of buying patterns. Advertisements and promotions could then be tailored for each segment of the target market. There are infinite ways to address the wants and needs of a target market. For example, product packaging can be designed in different sizes and colors, or the product itself can be altered to appeal to different personality types or age groups. Producers can also change the warranty or durability of the good or provide different levels of follow-up service. Other influences, such as distribution and sales methods, licensing strategies, and advertising media also play an important role. It is the responsibility of the marketing manager to take all of these factors into account and to devise a cohesive marketing program that will appeal to the target customer.

Propose segmentation criteria to be used for products in different markets choose a targeting strategy for the selected product/service and propose new positioning Market segmentation is the process of identifying key groups or segments within the general market that share specific characteristics and consumer habits. Once the market is broken into segments, companies can develop advertising programs for each segment, focus advertising on one or two segments or niches, or develop new products to appeal to one or more of the segments. Companies often favor this method of marketing to the one-size-fits-all mass marketing approach, because it allows them to target specific groups that might not be reached by mass marketing programs. To identify segments, marketers examine consumers' interests, tastes, preferences, and socioeconomic characteristics in order to determine their patterns of consumption and how they will respond to various marketing strategies. The primary information marketers seek is why consumers purchase specific products or services but not others. Catalog retailers and direct-marketing firms make up some of the key users of market segmentation, although many other kinds of companies and organizations use this technique. Market segmentationalso called micromarketingsimplifies the marketing process, because it allows marketers to concentrate their advertising on groups of consumers who

share significant characteristics. Marketers, therefore, can produce specific advertising geared towards specific segments; otherwise marketers have to create very general advertising and hope that it will appeal to a diverse audience. Market segmentation also can be more efficient than traditional marketing techniques such as product differentiation. Because marketers focus their advertising on specific segments, they can expect better results from each segment than they could expect from these consumer groups if treated as a whole. Catalog clothing stores, for example, convincingly illustrate these advantages of market segmentation. If a catalog marketer provides both men's and women's clothes, it would have to produce a very large catalog to include all of its merchandise, which would cost a lot to produce and mail. By sending such a catalog to all potential customers, the company could fail to capture the attention of many potential customers simply by having a man on the cover and sending it to women or a woman on the cover and sending it to men. At one point catalog marketers relied on this approach. But contemporary catalog retailers produce numerous versions of their catalogs designed for specific market segments, such as men between 20 and 35, women between 20 and 35, men between 35 and 50, and women between 35 and 50. Market segmentation, however, works effectively only for certain kinds of products and services. First, to determine whether to segment a market, marketers must find out if the market can be identified and measured, which entails determining which consumers belong to specific market segments. Second, marketers must determine if the segments are large enough to be profitable. While marketers can easily divide the total market into smaller groups, these groups might be so small that they do not justify the expenses associated with market segmentation. Third, marketers must be able to reach the segments through their advertising. If the members of a particular segment do not share interest in a common magazine or television show, for example, then marketers have no way of reaching the segment and so the segment is superfluous. Fourth, marketers must gauge the responsiveness of the segments and find out if a proposed segment would likely respond to a marketing campaign. If it is not probable that a segment will react to a promotion, then the segment is not useful. Fifth, marketers must determine if the segments will change in the near future. Since it takes time to prepare a marketing strategy for specific segment and since it takes time for market segmentation to be profitable, creating segments where consumer needs and wants are likely to change would not be productive. Companies can implement market segmentation in three general ways: through differentiation, concentration, and atomization. Differentiation refers to marketing products or services to different market segments based on each segment's individual needs as well as to developing new products for different segments. For example, a computer maker could market its products to home users, corporations, small businesses, and government agencies, thereby differentiating the needs of each of these four segments and appropriately targeting them. A company also may opt to target just one segment of the market, employing the market segmentation method of concentration. After considering various segmentation bases and conducting research, a company might find that its competitors are not reaching specific segments and decide to target this segment or niche exclusively. A computer maker, for instance, could concentrate solely on the home-user segment of the market and ignore the needs of the other segments. To do so, the computer maker would have to offer products that

meet home-user needs at prices these consumers could afford. Since concentrated marketing costs less than differentiated marketing, it may appeal to small businesses in particular. Atomization involves dividing the market into very small segments, which may include a single customer in some cases. Although rare, some companies offering expensive and highly customized products or services rely on this method. If a computer maker focused on government clients, it might have to build special computers for various government branches based on their individual needs. Some marketing analysts predict that atomization will grow in the coming millennium as companies strive to offer more individualized service. When choosing a method of market segmentation, marketers must take several factors into consideration. First, they must select a method consistent with company resources, because differentiated marketing, for example, has a significant cost and some companies may not be able to afford it. Second, marketers must consider the product line they are trying to sell. If the product line is limited, marketers usually choose the concentrated marketing method. If the product line is expansive, however, then marketers usually opt for the differentiated marketing method. After choosing a method of market segmentation, marketers must integrate the method into an overall marketing strategy. The marketing strategy will try to make the target product or service appeal to the target segment through an advertising campaign developed based on segmentation information such as age, gender, or location. Marketers also consider what a company's strategic position in a market ise.g., if it is a computer supplier to home users or businessesand create a marketing program that will help a company achieve or maintain this position. If the segment is properly defined for a specific product or service, then developing promotional strategies and reaching the target segment should be relatively easy. The information used to help create the market segments should help marketers choose among promotional techniques (e.g., direct marketing, advertising, publicity, and sales promotion), pricing strategies, and distribution strategies. This information also should help marketers choose among various advertising media. Demonstrate how buyer behaviour affects marketing activities in different buying situations The task of marketing is to identify consumers needs and wants accurately, then to develop products and services that will satisfy them. For marketing to be successful, it is not sufficient to merely discover what customers require, but to find out why it is required. Only by gaining a deep and comprehensive understanding of buyer behaviour can marketings goals be realised. Such an understanding of buyer behaviour works to the mutual advantage of the consumer and marketer, allowing the marketer to become better equipped to satisfy the consumers needs efficiently and establish a loyal group of customers with positive attitudes towards the companys products. Consumer behaviour can be formally defined as: the acts of individuals directly involved in obtaining and using economic goods and services, including the decision processes that precede and determine these acts. The underlying concepts of this chapter form a system in which the individual consumer is the core, surrounded by an immediate and a wider environment that influences his or her goals. These goals are ultimately satisfied by passing through a number of problem-solving stages leading to purchase decisions. The study and

practice of marketing draws on a great many sources that contribute theory, information, inspiration and advice. In the past, the main input to the theory of consumer behaviour has come from psychology. More recently, the interdisciplinary importance of consumer behaviour has increased such that sociology, anthropology, economics and mathematics also contribute to the science relating to this subject.
2 Social and cultural influences

Culture is learned behaviour that has been passed down over time, reinforced in our daily lives through the family unit and through educational and religious institutions. Cultural influences, therefore, are powerful ones and if a company does not understand the culture in which a particular market operates, it cannot hope to develop products and market them successfully in that market. It is important to recognise that culture, although immensely powerful, is not fixed forever. Changes in culture tend to be slow and are not fully assimilated until a generation or more has passed. An example of this is the custom of marriage, which has been openly challenged in the UK over the past twenty years. When couples first began to set up home together and raise families outside marriage, society, for the most part, adopted an attitude of condemnation, whereas today there is a much more relaxed attitude to those who choose to ignore the convention. The twentieth century has witnessed significant cultural changes, for example, changing attitudes towards work and pleasure. It is no longer accepted that work should be difficult or injurious to mind or body, and many employers make great efforts to ensure that the workplace is as pleasant an environment as possible, realising that this probably increases productivity. Employees now more frequently regard work as a means to earn the money to spend on goods or services that give them pleasure, and not just to pay for the necessities of life. The shortened working week, paid holidays and labour-saving devices in the home have all led to increased leisure time that influences how, when and what the consumer buys. Another major cultural change in this century is the changing role of women in society. Increased independence and economic power have not only changed the lives of women, but have also influenced societys and womens own perception of their socio-economic role. In most Western societies today, when considering culture, we must also consider subcultures. Immigrant communities have become large enough in many countries to form a significant proportion of the population of that country, and marketers must consider them because of their interactive influence on society and because, in some cases, they constitute individual market segments for certain product areas. Subcultures can also exist within the same racial groups sharing common nationality. Their bases may be geographical, religious or linguistic differences and marketers must recognise these differences and should regard them as providing opportunities rather than posing problems.
Specific social influences Social class

This is the most prominent social influence. Traditionally, one of the chief determinants of social class was income. Since pay structures have altered a great deal in terms of the lower C2, D and E categories moving more towards levels previously enjoyed by the higher A, B

and C1 categories over the past thirty years or so, classification of consumers on the basis of life style is becoming more meaningful today. Income aside, social class is an indicator of life style and its existence exerts a strong influence on individual consumers and their behaviour. There is evidence to suggest that whatever income level a consumer reaches during his or her lifetime, basic attitudes and preferences do not change radically. As consumers, we usually identify with a particular class or group, but often it is not the actual social class that is revealing, but that which the consumer aspires to. Income and/or education allows young people to cross social class barriers and adopt life styles which are different from those of their parents. They will tend to absorb the influences of the group to which they aspire and gradually reject the life styles of their parents and relations. It can thus be seen that occupation is a strong determinant towards an individuals behavioural patterns, which includes buyer behaviour. When studying social class, the marketer should make decisions on the basis of information revealed by objectively designed research, without any preconceptions or associations with inferiority or superiority in lower or higher social groupings. This is the only way that changes in behaviour can be identified.
Reference groups

This can be described as group of people whose standards of conduct mould an individuals dispositions, beliefs and values. This group can be small or large. Reference groups can range from the immediate family to the place of work. They can also be found in a persons social life. An individual is unlikely to deviate too far from the behavioural norms laid down by the members of a club or hobby group. Reference group theory does not state that individualism cannot exist within a group, but it does suggest that even rigid independent thinkers will at least be aware of what is considered normal within a group. In a small group like the family the advice and opinions of those who are regarded as knowledgeable will be highly regarded. Such people are termed opinion leaders. Extraneous to groups influences might also be at work in opinion forming, and here there is the existence of opinion leaders who are outside of the immediate group. Their opinions are taken up by opinion followers. In the case of a number of products, a deliberate direct appeal is made to the so-called snob appeal. This is done by using a marketing strategy of making a companys products acceptable to opinion leaders, or famous personalities (who are paid for their endorsement) in the hope that other sectors of the population will follow them. The family is perhaps the strongest reference group for most people because of its intimacy and relative permanence. Strong associations means that individuals within this group will influence each other. The family life cycle traditionally contains six stages, although more recently different divisions have been quoted. These divisions are:
1. Unmarried Here, financial commitments and family responsibilities tend to be low, with disposable income being high. These younger unmarried consumers tend to be more leisureorientated and more fashion conscious. This segment thus comprises a very important market for many new and innovative products. 2. Young newly married couples - no children This group focuses its expenditure on those items considered necessary for setting up home.

3. Young married couples with children Outlay here is children-orientated, and there is little surplus cash for luxury items. Although they are receptive to new product ideas, this group sees economy as being the over-riding factor when making purchases. 4. Older married couples still with children at home Disposable income will probably have increased, often with both parents working and children being relatively independent. In some cases children may be working and the parents are able to engage increasingly in leisure activities often in the form of more than the standard annual holiday. Consumer durables, including major items of furniture, are often replaced at this stage. Such purchases are often made with different motivations to the original motivations of strict functionality and economy that was necessary at an earlier life cycle stage. 5. Older married couples with no children living in the home Here, disposable income can be quite high. However, tastes are likely to be firmly rooted reflected in unchanging purchasing patterns. Thus marketers will have difficulty when attempting to change predispositions, so the best policy will be through attempts to refine and add value rather than to introduce new concepts and ideas. 6. Older retired couples and single people At this stage, most consumer durables have been purchased although occasional replacements will be required. Purchasing is low and patterns of purchasing are conservative and predictable. This group of consumers is increasing rapidly. Such people tend to be less reliant solely on the State pension, many having subscribed to occupational pensions from former employers, which boosts the State pension. This allows this group to lead more active lives and the tourist industry now actively targets this particular market segment.

In the past the tendency was for clearer demarcations of purchasing responsibility in terms which partner was responsible for which purchases. Nowadays, this distinction is far less clear cut as family roles have tended to merge in terms of women taking on traditionally viewed male roles and vice versa. Marketers should, therefore, engage in research before determining whom to target for their marketing efforts.
Individual buyer behaviour

As well as being influenced by the outside environment, people also have their own individual beliefs. It is important that we should know what these are in order that we can better understand how individuals respond to marketing efforts. Individuals are different in terms of how they look, their education, their feelings and their responses to marketing efforts. Some will behave predictably and others less predictably according to an individuals personality. The individual consumer absorbs information and develops attitudes and perceptions. In marketing terms, this will affect an individuals needs as well as determining how to satisfy them. The task of marketing is to identify patterns of behaviour which are predictable under given conditions, which will increase the marketers ability to satisfy customer needs, which is at the very base of marketing. In order to more fully understand this concept we shall concentrate on five psychological concepts which are recognised as being very important when attempting to understand buyer behaviour:

personality and self concept

This means how we think other people see us, and how we see ourselves. As individuals we might wish to create a picture of ourselves that is acceptable to our reference group. This is communicated to the outside world by our individual behaviour. Marketers are interested in this behaviour as it relates to our purchase and consumption of goods. The sum of this behaviour is an individual self-statement and

is a non-verbal form of communication. This self image is expressed in a way which relates to our inner selves and this promotes acceptance within a group. Direct advertising appeals to the self image are now being made through behavioural segmentation. Self is influenced by social interaction and people make purchases that are consistent with their self concept in order to protect and enhance it. The constant process of re-evaluating and modifying the self concept results from a changing environment and changing personal situations. Personality is the principal component of the self concept. It has a strong effect upon buyer behaviour. Many purchase decisions are likely to reflect personality, and marketers must consider personality when making marketing appeals. Psychological theory suggests that we are born with instinctive desires which cannot be satisfied in a socially acceptable manner and are thus repressed. The task of marketing in this context is to appeal to inner needs, whilst, at the same time, providing products which enable them to be satisfied in a socially acceptable way.

Motivation

An early thinker insofar as motivation is concerned was the psychologist, Sigmund Freud who lived between 1856 and 1939. His theories have been criticised since, but as a theorist, his theories are of fundamental value. He was responsible for identifying three levels of consciousness:
o o o

The conscious which includes all sensations and experiences of which we are aware; The pre-conscious which includes the memories and thoughts which we have stored from our experiences and we can bring to mind when we wish; The unconscious that is the major driving force behind our behaviour and this includes our wishes and desires of which we are not always aware.

Marketers are interested in motivation when it relates to purchasing behaviour. This behaviour relates to the motive for wishing to possess the goods or services in question, and it has been termed goal-related behaviour. For a motive to exist there must be a corresponding need. Motives like hunger, thirst, warmth and shelter are physiological. Others, like approval, success and prestige are psychological. Motives like staying alive are instinctive whilst motives like cleanliness, tidiness and proficiency are motives that are learned during life. We can also discern between rational and emotional motives. Most purchasing decisions are a composite of such motives, quite often a deciding factor might be price which is of course more of an economic restriction than a motive. It can, therefore, be seen that a number of motives might be at play when making a purchasing decision - some motives stronger than others - and the final decision might be a compromise solution.

Task 3 (AC3.1, 3.2, 3.3, 3.4, 3.5) Explain how products are developed to sustain competitive advantage and how prices are set to reflect an organisations objectives and market conditions

Several aspects of business and marketing dictate how prices need to be set in order for a company or retailer to be successful and reflect their objectives. Firstly, the amount of time that it takes to make a product (and thus the hourly rate of the person who has made it, if applicable) needs to be considered so that the producer is paid fairly. The cost of materials also needs to be taken into account so that the business does not lose money. On top of this, a companys aim is usually not just to break even but to make a secure profit. Deciding how much needs to be charged in order to achieve this is likely to be decided on the basis of previous patterns and future projections rather than being decided arbitrarily and will vary depending on the organisations size and output. Ideally, when starting out with a new product as an unestablished or unfamiliar company, your prices need to be high: This sets a standard, and for technology companies in particular, geeks or early adopters will be drawn in despite or even because of the high price tag. As more and more people begin to purchase the product, however, prices should become lower and more competitive: If your product is an innovative one, other similar products may soon begin to appear on the market, and you need to be able to compete with them, continuing to draw in new customers at the same time. However, your product and company ideals should not be compromised: If, as mentioned, you are trying to set a certain standard or attract a certain class of customer, your price should reflect this. Plus, you still need to continue making a profit. If your profit is based on the cost price, this is known as mark up and can be calculated by taking the cost price away from the selling price, dividing this number by the cost price, and then multiplying by 100. If your profit is based on the sale price, this is known as margin and can be calculated by taking the cost price away from the selling price, dividing this number by the selling price, and then multiplying by 100. Explain how distribution is arranged to provide customer convenience Illustrate how promotional activity is integrated to achieve marketing objectives Analyse the additional elements of the extended marketing mix Advantages of a Distribution Channel When a customer is considering buying a product he tries to access its value by looking at various factors which surround it. Factors like its delivery, availability etc which are directly influenced by channel members. Similarly, a marketer too while choosing his distribution members must access what value is this member adding to the product. He must compare the benefits received to the amount paid for using the services of this intermediary. These benefits can be the following:

Cost Saving The members of distribution channel are specialized in what they do and perform at much lower costs than companies trying to run the entire distribution channel all by itself.

Time Saving

Along with costs, time of delivery is also reduced due to efficiency and experience of the channel members. For example if a grocery store were to receive direct delivery of goods from every manufacturer the result would have been a chaos. Everyday hundreds of trucks would line up outside the store to deliver products. The store may not have enough space for storing all their products and this would add to the chaos. If a grocery wholesaler is included in the distribution chain then the problem is almost solved. This wholesaler will have a warehouse where he can store bulk shipments. The grocery store now receives deliveries from the wholesaler in amounts required and at a suitable time and often in a single truck. In this way cost as well as time is saved.

Customer Convenience Including members in the distribution chain provides customer with a lot of convenience in their shopping. If every manufacturer owned its own grocery store then customers would have to visit multiple grocery stores to complete their shopping list. This would be extremely time-consuming as well as taxing for the customer. Thus channel distribution provides accumulating and assorting services, which means they purchase from many suppliers the various goods that a customer may demand. Secondly, channel distribution is time saving as the customers can find all that they need in one retail store and the retailer

Customers can buy in small quantities Retailers buy in bulk quantities from the manufacturer or wholesaler. This is more cost effective than buying in small quantities. However they resell in smaller quantities to their customers. This phenomenon of breaking bulk quantities and selling them in smaller quantities is known as bulk breaking. The customers therefore have the benefit of buying in smaller quantities and they also get a share of the profit the retailer makes when he buys in bulk from the supplier.

Resellers help in boosting sales Resellers often use persuasive techniques to persuade customers into buying a product thereby increasing sales for that product. They often make use of various promotional offers and special product displays to entice customers into buying certain products.

Customers receive financial support Resellers offer financial programs to their customers which makes payment easier for the customer. Customers can buy on credit, buy using a payment plan etc.

Resellers provide valuable information

Manufacturers who include resellers for selling their products rely on them to provide information which will help in improving the product or in increasing its sale. Highlevel channel members often provide sales data. On all other occasions the manufacturer can always rely on the reseller to provide him with customer feedback. Disadvantages of including intermediaries in the distribution channel

Revenue loss The manufacturer sells his product to the intermediaries at costs lower than the price at which these middlemen sell to the final customers. Therefore the manufacturer goes for a loss in revenue. The intermediaries would never offer their services to the manufacturer unless they made a profit out of selling his products. They are either made a direct payment by the manufacturer, for instance shipping costs or as in the case of retailers by selling the product at costs higher than the price at which the product was bought from the manufacturer (also known as markup). The manufacturer could have sold at this final price and made a greater profit if he had been managing the distribution all by himself.

Loss of Communication Control Along with loss over the revenue the manufacturer also loses control over what message is being conveyed to the final customers. The reseller may engage in personal selling in order to increase the product sale and communicate about the product to his customers. He might exaggerate about the benefits of the product this may lead to miscommunication problems with end users. The marketer may provide training to the salespersons of retail outlets but on the whole he has no control on the final message conveyed.

Loss of Product Importance The importance given to a manufacturers product by the members of the distribution channel is not under the manufacturers control. In various cases like transportation delays the product loses its importance in the channel and the sales suffer. Similarly a competitors product may enjoy greater importance as the channel members might be getting a higher promotional incentive.

Task 4 (AC4.1, 4.2, 4.3) Describe how you would plan marketing mixes for two different segments in consumer markets Illustrate differences in marketing products and services to businesses rather than consumers The mix is a bundle of variables which are offered to the customer. These include the product or service itself (its advantages); its availability (the place where and when it is available, delivered or distributed); its image (the way it is promoted) and, of course, the price which should be charged.

These are some of the ingredients which a marketing manager must mix together when optimising a limited amount of resources. What is the best mix? A marketing manager has to juggle resources and decide on the best marketing mix. Should money be spent or forfeited on: reduced prices? Improved products? New delivery trucks? Or maybe invest all your money in a high risk TV advertising campaign? Did you recognise the 4 Ps just there? In 1960 Jerome McCarthey presented the 4 Ps to the world. Since then marketing managers around the world have become familiar with them. Can you recall them? In addition to the 4 Ps, there are other approaches to the mix. These are explored under 'Different Approaches' subtopic as shown in the title map. Let's look at each of the 4 Ps briefly. Product - this means the product's (or service's) quality, the functions, the features and benefits of its design plus packaging, guarantees and level of after-sales service. Choices can be made about any of these aspects. Price includes recommended prices to end-user customers, distributor's trade prices, cash discounts, bulk discounts, terms of credit. Place means where and when the customer buys and consumes the product or service. Place is sometimes referred to as the marketing channels, physical distribution, logistics or location. Promotion means the promotions mix or the communications mix. This mix includes advertising, sales promotions, publicity, direct mail, exhibitions, display, packaging, selling and even word-of-mouth. The choice of target market affects the mix. Here is Professor Philip Kotler: "For example, in India you sell one cigarette at a time, not a package. So there is a lot of localisation. The biggest mistake companies make often, is to assume that the way they sell a product in their own country is the way to put it into another country." Philip Kotler So the mix must adapt itself to the market. The 4 Ps, however, is just one approach to the marketing mix. You can explore some other approaches in the subtopic called 'Different Approaches'. Different Approaches The 4 Ps is just one approach to the marketing mix. There are many other approaches. American author, Philip Kotler prefers the 4 Cs. He suggests that the 4 Ps are a seller's mix or sales orientated approach and it therefore should be replaced by the 4 Cs which are more customer orientated, or marketing orientated.

You can probably guess what the 4 Cs stand for.......

Product = Customer Benefits Price = Cost to Customer Place = Convenience Promotion = Communications

Going back to the 4 Ps, some feel this approach to the marketing mix misses the most important part of marketing; the centre of the marketing universe is omitted. What do you think is the centre of the marketing universe? The 5th P is the People: customers and employees. Customers are at the centre of the marketing universe. Now lets move on to the 7 Ps. Although the 4 Ps can be used for both products and services some feel that the 4 Ps works better for products than it does for services. Perhaps you agree? American, academics Booms & Bitner felt that the 7 Ps are more appropriate for the service sector such as hotels or transport companies. Four of the 7 Ps are the same. Product, Price, Place and Promotion; can you guess what the others might be? People, Process and Physical environment. Each of these Ps affects what the customer is offered. People are employees. Process means the production and delivery of the service. Physical Environment means the interior and exterior of the buildings. In 1961 Albert Frey suggested that all the marketing mix variables could be categorised into just two groups: The Offering and the Methods and Tools The Offering consisted of Product, Packaging, Service, Brand and Price, while the Methods and Tools comprised of Distribution Channels, Personal Selling, Advertising and Sales Promotion. So there are several different ways of categorising the mix. There are also several different ways of mixing the mix. Should advertising be increased, prices slashed, deliveries reduced and products upgraded? Or the other way around? You can explore this in the section called 'Mixing the Mix'. Mixing the Mix There is no one, single, perfect marketing mix. Some mixes are, however, better than others. The marketing mix has an infinite amount of combinations or mixes. The 'same' product can have extremely different mixes for different markets around the world.

Ranges of prices, distribution options, product modifications, promotional strategies can all be mixed in different ways. They should however, fit together to consolidate a single desired positioning in a particular market segment. The mix should not pull in different directions; a high price for low quality goods does not make sense in the long term. Repeat business is important in the world of marketing. Equally, low quality, discount priced products will find distribution in a luxury up-market store difficult to achieve. Here is a new product. Market it. Mix the mix. A friend's mother has developed a watch which has a videophone and magnifying glass for viewing. A combination of miniaturisation and micro chips means the video watch can be produced for as little as 2.00 per unit. She has asked you to help her to draw up an outline marketing mix. Consider two different mixes. What would you do? The first question to ask would be: 'what is the market?' What benefits does this product deliver? Who might enjoy these benefits? Next, considering various segments and possible target markets would also help. And a clear view on the positioning also helps. An understanding of what resources the company has would be vital. One option would be to recommend a retail price for the video phone watch at 1,000. This could be distributed through luxury stores like Harrods or Neiman and Marcus, promoting it with elaborate in-store displays (merchandising) supported with a limited mail shot and PR campaign. Now consider another option. This time change the marketing mix radically. Reduce the price and sell in packs of two through discount warehouses supported by a national TV advertising campaign. Each ingredient in the mix can vary enormously. For example, the watch can be made out of plastic or platinum. It can have a lifetime guarantee or become a disposable product. It can have lots of extras such as diamond studded leather straps, silk wrapping, guarantees and so on. On the other hand, it can have no added costs and no added extras - just the basic video watch. These are decisions which the marketing manager has to make after careful analysis of the situation, the market, its needs, its sectors, the ideal positioning, the resources within the company. So is there a single, perfect marketing mix? No, but some mixes are obviously better than others.

Finally, some countries require different mixes. Some segments require different mixes within the same country. The mix can change according to market requirements which in themselves change over time. The ever-changing mix is discussed in a separate subtopic. The Ever Changing Mix An excellent marketing mix in one period may not be as effective in another period. The marketing mix changes over time. Partly because markets change, new sectors evolve, trends develop, attitudes change, different ideal positionings emerge, technology moves on, new products arrive, different distribution channels appear. Just look at the personal computer, or PC, market. Today's PCs are better products, have much lower prices and different methods of distribution compared with ten years ago. Today, thousands of people buy PCs through mail order. Ten years ago this would never have been the case. The Marketing Mix has to change to meet new market conditions. Here is an example of how different elements of the marketing mix dominated the retail petrol market in the UK over a period of time. In the early 1960s Product Performance - miles per gallon, reliability were very important. Then the marketing emphasis switched to promotions with the Green Shield Stamps war in the late 1960s. Physical distribution and sourcing of supplies became vital during the first oil crisis in 1973. This was followed by a price war in 1974, which was in turn followed by supply and distribution problems during the second oil crisis in 1979. The early '80s saw location and design of new retail sites as the key to competitive advantage. This was followed by the mid 1980s sales promotions war as petrol retailers competed to give away instant gifts, tokens, scratch cards. These sales promotions were supported by large advertising budgets. So now the advertising promoted the sales promotions rather than the product itself. Some advertising campaigns even advertised the fact that their competitors had inferior sales promotions. The marketing mix can change over time. It can also change over distance. This is particularly true in international markets where certain approaches to advertising and promotions are acceptable in some countries but not in others; or where the distribution network is restricted; or where the price structure is totally different. The optimum mix is influenced by the company's long term policy on repeat sales, its positioning strategy, the target market selection, the firm's resources, levels of competition and the ability, or willingness, to change the mix according to a particular market's requirements. The ideal mix should support the ideal positioning in the most attractive target markets. Product and the Marketing Mix

Over a hundred years ago Ralph Waldo Emerson suggested that "If a man can write a better book, preach a better sermon, or make a better mousetrap than his neighbour, though he builds his house in the woods the world will make a beaten path to his door." This is certainly not true today. Many excellent products fail because no one knows about them, or they are wrongly positioned, or they're not available when people want them, or they're too expensive for the chosen target market. Other excellent products fail because a competitor's lower priced and inferior product is widely available before you even get to launch your product on the market place. Going back to the Emerson's better mousetrap, ironically the best product is not always the best option. For example, the product might be so good that it costs too much to produce and therefore the best product might just put you out of business. Do customers really want that extra feature? Can you afford it? Can they afford it? Can competition copy it? Whatever the decision, the final combination of the core product, tangible product and augmented product along with price, promotion and distribution need to work together if a product is to be successful.. Better mousetraps are often beaten by poorer mousetraps. It happens all the time. Competitors constantly juggle their marketing mixes to maximise their product sales. Speed to market; blocked distribution channels; clever pricing strategies; powerful promotions; are all used by competitors to win and keep market share. The better mousetrap also needs to be part of a coherent, fully integrated marketing mix. The distribution has to get the product to where the target customer can buy it when they want it. The prices have to reflect the desired quality image while simultaneously matchingwhat customers can afford. Finally, customers need to know about the product - it needs to be promoted in the right way. Each element of the marketing mix should support the product's positioning. The product, its price, its distribution channels and of course the promotion should all reinforce the same message. Without a coherent, fully integrated mix even the best product in the world will fail.

References

Marketing - advantage, type, benefits, cost, Macro-marketing and micro-marketing http://www.referenceforbusiness.com/small/Mail-Op/Marketing.html#ixzz1rdXeJOHZ American author, Philip Kotler prefers the 4 Cs
http://www.multimediamarketing.com/mkc/marketingmix/ http://www.antiessays.com/search_results.php?query