marketing mix (4ps)
TRANSCRIPT
Four Ps
• Four Ps
Marketing Mix
• Product• Place• Price• Promotion
Marketing Mix
• The concept is simple. Think about another common mix - a cake mix. All cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar!
Marketing Mix
• It is the same with the marketing mix. • The offer you make to your customer can
be altered by varying the mix elements. • So for a high profile brand, increase the
focus on promotion and desensitize the weight given to price.
• Another way to think about the marketing mix is to use the image of an artist's palette.
Marketing Mix
• The marketer mixes the prime colours (mix elements) in different quantities to deliver a particular final colour.
• Every hand painted picture is original in some way, as is every marketing mix.
Target Market is the key
• Competition
Designing the right marketing mix
• The most creative & challenging step in marketing is designing the right marketing mix
• The marketing mix is the specific collection of actions & associated instruments employed by an organisation to stimulate acceptance of its ideas, products & services
Total Offer to the Customer
• First, the firm chooses the product to meet the identified need of the target segment
• Second, the right distribution channel is used to make the product available
• Third, the firm undertakes eye catching promotion
• Fourth, the price platform is acceptable to the customer & firm
E. Jerome McCarthy
• A prominent marketer, E. Jerome McCarthy, proposed a 4 P classification in 1960, which has seen wide use.
4Ps & 4Cs
• Product- Customer /Consumer • Price- Customer cost• Place- Convenience• Promotion- Communication
4Ps & 4Cs
• Four Cs• The Four Ps is also being replaced by the
Four Cs model, consisting of consumer, cost, convenience, and communication.
• The Four Cs model is more consumer-oriented and fits better in the movement from mass marketing to niche marketing.
Product- Consumer
• The product part of the Four Ps model is replaced by consumer or consumer models, shifting the focus to satisfying the consumer.
Price- Cost
• Pricing is replaced by cost, reflecting the reality of the total cost of ownership.
Place- Convenience
• Placement is replaced by the convenience function.
• With the rise of internet and hybrid models of purchasing, place is no longer as relevant as before.
• Convenience takes into account the ease to buy a product, find a product, find information about a product, and several other considerations.
Promotion- Communication
• Finally, the promotions feature is replaced by communication.
• Communications represents a broader focus than simply promotions.
• Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the firm and the consumer.
Extended Marketing Mix
• There have been attempts to develop an 'extended marketing mix' to better accommodate specific aspects of marketing.
• For example, in the 1970s, Nickels and Jolson suggested the inclusion of packaging.
• In the 1980s Kotler proposed public opinion and political power
Booms & Bithner• Booms and Bitner included three additional 'Ps' to accommodate
trends towards a service or knowledge based economy:
• People – all people who directly or indirectly influence the perceived value of the product or service, including knowledge workers, employees, management and consumers.
• Process – procedures, mechanisms and flow of activities which lead to an exchange of value.
• Physical evidence – the direct sensory experience of a product or service that allows a customer to measure whether he or she has received value. Examples might include the way a customer is treated by a staff member, or the length of time a customer has to wait, or a cover letter from an insurance company, or the environment in which a product or service is delivered
Extended- Marketing Mix
Extended Marketing Mix
• Booms and Bitner included three additional 'Ps' to accommodate trends towards a service or knowledge based economy:
• People• Process• Physical Evidence
Extended Marketing Mix
People
• People – all people who directly or indirectly influence the perceived value of the product or service, including knowledge workers, employees, management and consumers.
Process
• Process – procedures, mechanisms and flow of activities which lead to an exchange of value.
Physical Evidence
• The direct sensory experience of a product or service that allows a customer to measure whether he has received value.
• Examples might include the way a customer is treated by a staff member, or the length of time a customer has to wait, or a cover letter from an insurance company, or the environment in which a product or service is delivered.
Physical Evidence
• Physical evidence is the material part of a service.
• Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues.
Physical evidence
• There are many examples of physical evidence, including some of the following:
• Packaging. • Internet/web pages. • Paperwork (such as invoices, tickets and
despatch notes). • Brochures.
Physical Evidence
• Furnishings. • Signage (such as those on aircraft and
vehicles). • Uniforms. • Business cards. • The building itself (such as prestigious
offices or scenic headquarters).
7Ps & 7Cs
The 7 Ps The 7 Cs
Organisation Facing Customer Facing
Product = Customer/ Consumer
Price = Cost
Place = Convenience
Promotion = Communication
People = Caring
Processes = Co-ordinated
Physical Evidence = Confirmation
Fundamental Actions
• The term 'marketing mix' however, does not imply that the 4P elements represent options.
• They are not trade-offs but are fundamental marketing issues that always need to be addressed.
• They are the fundamental actions that marketing requires whether determined explicitly or by default.
Optimizing the marketing mix-1 Strategic & Tactical Changes
• Broadly defined, optimizing the marketing mix is the primary responsibility of marketing.
• By offering the product with the right combination of the four Ps marketers can improve their results and marketing effectiveness.
• Strategic & Tactical Changes
Optimizing the marketing mix-2
• Making large changes in any of the four Ps can be considered strategic.
• Making small changes in the marketing mix is typically considered to be a tactical change.
Optimizing the marketing mix-3
• For example, a large change in the price, say from Rs19.00 to Rs39.00 would be considered a strategic change in the position of the product.
• However a small change of Rs130 to Rs129.99 would be considered a tactical change, potentially related to a promotional offer.
Product
• Product:• A product, service or idea is that which
satisfies the needs & wants of the customers
Product- (Learn)
• A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units.
• Intangible products are often service based like the tourism industry & the hotel industry or codes-based products like cell phone load and credits.
Product
• Typical examples of a mass produced tangible object are the motor car and the disposable razor. A less obvious but ever-present mass produced service is a computer operating system.
Product• Cars
Cars- Reva
• Reva
Car- Maruti 800
• Maruti
Product
• Variety• Quality• Design• Features• Brand Name• Packaging• Service
Product Variety
• Even today, manufacturers of products which are built to customer order, for example, cars, aeroplanes and medical equipment, offer such a large range of combinations of product features that millions of variants of a single product are possible.
• Commercially available software systems support the automation of many aspects of the engineering process; product databases enable the description of single products and engineering applications can use these product descriptions to carry out their tasks.
Product Quality
• A product or process that is reliable, and that performs its intended function is said to be a quality product.
• Quality in business, has an interpretation as the non-inferiority or superiority of something.
• Quality is a perceptual, conditional and somewhat subjective attribute and may be understood differently by different people.
• Consumers may focus on the specification quality of a product/service, or how it compares to competitors in the marketplace.
Product design
• Product design can be defined as the idea generation, concept development, testing and manufacturing or implementation of a physical object or service
Brand Name
• The brand name is often used interchangeably within "brand", although it is more correctly used to specifically denote written or spoken linguistic elements of any product.
• In this context a "brand name" constitutes a type of trademark, if the brand name exclusively identifies the brand owner as the commercial source of products or services
Product
• Instruments that aim at satisfaction of the prospective exchange party’s needs
• Examples: Product characteristics, options, assortments, packaging, guarantees, quality, features, style, brand name, size & packaging, services, warranties/guarantees, returns & replacements
Product
• Titan introduces quartz watches• 24 Hour banking & ATMs by banks• Tetra pack cartons for milk, juices• Indoor coolers• 7 year warranty on refrigerators- Allwyn
Product & Packaging
FMCG
Product
• Consumer durable products
Products
• Increase in mobile services in India
Product- Durable
• Washing machines
Product
• Camera
Product
Products
• Latest Gadgets
New generation products
• Ipod, & walkman mobile
Services
• Courier Aviation
Services
• Despatch
Modern gadgets
• ipod
Aviation
Place
• Place represents the location where a product can be purchased.
• It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet.
Place
• Physical distribution are activities involved in transporting products from the producer to the consumer:
• Mode of transport• Warehousing & Storage• Order processing• Inventory control
Place
• Channels of distribution are the routes through which the ownership of goods flow on its way from the producer to the customer
• Distributor• Super-stockist• Wholesalers• Retailers
Place
• Instruments that determine the intensity & manner in which goods or services will be made available
• Types of channels, density of distribution, trade-relation mix, merchandising advise
Place
• Channels• Coverage• Locations• Inventory• Transportation• Logistics
Duty Free Stores - Airports
Hypermart-Store Signage's
Availability- Place
• Large Format stores
Large Format Stores
• Lifestyle• Westside• Shoppers Stop• Pantaloons• Big Bazaar
Retail brands
• Stores
Nokia Store
Place
• Global Players in India
Place
• Markets
Place
• Stores
Modern Grocery Store
Local stores
• Local kirana stores
Price
• The price is the amount a customer pays for the product.
• It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product.
• The business may increase or decrease the price of product if other stores have the same product.
Price
• List Price• Discounts• Allowances• Payment Period• Credit Terms
List Price
• In retail, price regularly quoted to customers before applying discounts. List prices are usually the prices printed on dealer lists, invoices, price tags, catalogs, or dealer purchase orders.
Price Lists
Discounts & Allowances
• Discounting is a financial mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee
• Discounts and allowances are reductions to a basic price of goods or services.
Payment Period & Credit Terms
• The stipulation by a business as to when it should be paid for goods or services supplied, for example, cash with order, payment on delivery, or within a particular number of days of the invoice date
Price
• Bills
Price
• Price is the amount a consumer pays in exchange for the product or service.
• Marketers must consider the following in setting prices:
Price
• Target segment- How much the target segment is willing to pay at different price levels- price elasticity of demand
• Cost- How much it costs the firm to produce & market the product
• Competition- Prices of competitors• Society & Law- Within legal framework
Price elasticity of demand-1
• Elasticity is a measure of responsiveness. Two words are important here.
• The word "measure" means that elasticity results are reported as numbers, or elasticity coefficients.
• The word "responsiveness" means that there is a stimulus-reaction involved.
• Some change or stimulus causes people to react by changing their behavior, and elasticity measures the extent to which people react.
Price elasticity of demand-2
• The most common elasticity measurement is that of price elasticity of demand.
• It measures how much consumers respond in their buying decisions to a change in price.
• The basic formula used to determine price elasticity is
• e= (percentage change in quantity) / (percentage change in price).
(Read that as elasticity is the percentage change in quantity divided by the percentage change in price.)
Price
• Marketers have to determine prices to consumers & channel partners
• Prices across models & geographic regions have to be established
• Policies on discounts have to be framed• These decisions are vital to enhance sales
volumes
Innovative Discounts
• Discount sales in shopping malls• Off season sales• Closing down sales• Festival sales• Credit points• Exchange offers – mobiles, cookers, cars
Festive Sales
• Christmas & Diwali Sales
Innovative discounts
• Discounts
End of season sale
Special Sales
• Sales
Gold Sale- Impact
• Festive season revives gold demand, premiums steady
Report- Gold Sales
• Wednesday August 12, 01:40 PM Festive season revives gold demand, premiums steady
• SINGAPORE/MUMBAI (Reuters) - Gold trading picked up in India, the world's largest consumer, as jewellers took advantage of a price drop to replenish stocks during the festive season, while premiums for kilobars were mostly steady in Asia in the past week.
Discount Rush
Promotion
• Promotion activities are meant to communicate & persuade the target market to buy the company’s products
• This is done by:-
Promotion
• Advertising• Personal selling• Sales promotion- POS• Public Relations• Word of mouth – Viral advertising
Promotion
• Promotion represents all of the communications that a marketer may use in the marketplace.
• Promotion has five distinct elements – advertising, personal selling, public relations, word of mouth and point of sale.
• A certain amount of crossover occurs when promotion uses the five principal elements together
• Advertising covers any communication that is paid for, from and cinema commercials, radio and Internet adverts through print media and billboards.
ATL & BTL• Above the line (ATL) is an advertising technique using
mass media to promote brands. • Major above-the-line techniques include TV and radio
advertising, print advertising and internet banner ads. • This type of communication is conventional in nature and
is considered impersonal to customers. • The ATL strategy makes use of current traditional media:
television, newspapers, magazines, radio, outdoor, and internet.
• It differs from BTL (Below the line), that believes in unconventional brand-building strategies, such as direct mail.
BTL- Below the line
• The terms "below the line" promotion or communications, refers to forms of non-media communication, even non-media advertising.
• Below the line promotions are becoming increasingly important within the communications mix of many companies, not only those involved in FMCG products, but also for industrial products.
ATL & BTL
• What’s the difference between ‘Above the line’ and ‘below the line’ advertising?
• Below the line (BTL) is an advertising technique. • It uses less conventional methods than the usual specific
channels of advertising to promote products, services, etc. than ATL (Above the line) strategy.
• These may include activities such as direct mail, public relations and sales promotion for which a fee is agreed upon and charged up front.
Below the Line• Below the line advertising typically focuses on direct
means of communication, most commonly direct mail and e-mail, often using highly targeted lists of names to maximize response rates
• The term "Below the Line" is rapidly going out of fashion in advertising circles as agencies and clients switch to an 'Integrated Communication Approach.'
• BTL is a common technique used for touch and feel products. Those consumer items where the customer will rely on immediate information than previously researched items.
• BTL techniques ensures recall of the brand while at the same time highlighting the features of the product.
Integrated Communication Approach
• Definition: A management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation.
Through the line-TTL
• Through the line" refers to an advertising strategy involving both above and below the line communications in which one form of advertising points the target to another form of advertising thereby crossing the "line".
• An example would be a TV commercial that says 'come into the store to sample XYZ product'.
• In this example, the TV commercial is a form of "above the line" advertising and once in the store, the target customer is presented with "below the line" promotional material such as store banners, competition entry forms, etc
Personal selling
• Personal Selling: Face to face personal communication- Eureka Forbes
• In person selling, tele-marketing• Advertising- Mass communication efforts
through media• Sales Promotion- Communication through
contests, OOH, trade shows, free samples, yellow pages, call helplines
Personal Selling
• Personal Selling
Discount coupons
• Discount coupons
Promotion-2
• Publicity- Communicating with an audience by personal or non-personal media that are not paid for delivering the message
• Print media news, broadcast media news-UTI,PTI, Reuters, annual reports, speeches by employees
Branding
• Signages
Known companies
• Recognizable companies
Nokia
• Nokia
Messages
• Fly High
Examples-LuxSame theme over the years
Chips
• Competition
Celebrity endorsement
• Using famous people to attract target segment
ICICI Bank- Print Ad
Brand AmbassadorStar Power
TV Channels
TV Channels
TV Channels
• TVC
TV Channels
TV Channels
More than just news
• Entertaining information to add spice
First thing in the morning
Print Media
• Print- Newspapers & Magazines
Newspapers
Print Media
• Newspapers & Magazines
Read everywhere
• Omnipresent
Newspapers you could read
• Economic Times• Business Standard• Mint• Hindu Businessline• Business News in
daily newspapers
• The Hindu
Radio
• Growing radio stations in India
Radio Stations
• Numerous- FM
Radio channels
• Meow targets at women
Bajaate Raho- Red FM
Radio on the internet
• On the internet
Videos can be uploaded
• Companies upload their corporate films• www.youtube.com
Sales Staff & PR
• Sales staff often plays an important role in word of mouth and Public Relations
Public Relations
• Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events.
• Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum.
Press Release
• Press Release
Public Relations
• Press Conferences
Media Entertainment
PR Material
• Press kit to be given to press with all info.
Press Conference
• Spokesperson of the company talks to the press
Client Meetings
• Word of mouth publicity
Word of mouth publicity
• Word of mouth is a reference to the passing of information from person to person. Originally the term referred specifically to oral communication but now includes any type of human communication, such as face to face, telephone, email, and text messaging
Word of mouth publicity
• Salespersons
Word of mouth publicity
• At meetings
Competitors
• Responding to competitor activity & messages
• You may have seen similar activity in cola ad wars
Reports in media
• Cola war shifts to a new turf
• The famous cola wars have found a new battleground — the Indian fields.
• The world’s largest beverage company Coca-Cola, like its rival PepsiCo, is finalising plans for sourcing fruit from India for its juice brands.
OOH
• Cola vans act as OOH
OOH
• Pepsi van
OOH
• Cola signages
Vending Machines
• Vending machine- Note both brands
Recognizable logos
• Coke vs Pepsi
Sales Promotion
• Yeh Dil Maange More!!!
Point of Sales
• Point of sales (POS) or checkout refers to both a checkout counter in a shop, and the location where a
transaction occurs
Cola Ads-Promotion
• Cola drinks- Thums Up, Coca Cola
Vodafone vs Airtel
Airtel
Telecom Ad- Messages
• Airtel- Now Airtel removes distances across India.
• Vodafone- Happy to Help• Spice- Faltoo callers ki No Entry
Vodafone vs Airtel Ads
Signages
• Celebrity endorsement
Reliance Telecom
• Reliance
Reliance Mobile- Hritik
Reliance Mobile
• Hritik Roshan
What an idea, Sirji
• Walk when you talk
OOH- Idea Cellular
Idea Cellular
• IDEA’s ad campaigns based on the theme of ‘Democracy’; ‘Championing a world without caste’; ‘Championing a world in which no one suffers from the disability to communicate’; and ‘Education for All’, have been a huge success amongst all categories of audience.
Effectiveness of Campaign
• The testimony of the success of the campaign is reflected from the rapid growth of IDEA’s subscriber base in the country.
• The Aditya Birla Group company has grown to become the 3rd largest private GSM operator with over 43 million subscribers across 16 service areas, nationally.
Outdoor
• Hoarding/Billboard
OOH
• Signages & Gates
Brands using OOH
• Amul
Mobile truck- OOH
• Outdoor trucks with billboard
Trade Shows & Events
• Trade Shows• Events
Wall paintings- Shutters
Websites
Airline Ad Wars
• Marketers should be ready to face communication challenges
• Jet Airways- We’ve Changed• Kingfisher- We made them change• Go Air- We’ve not changed; we are still the
smartest way to fly
Ad wars
• In Mumbai- Same location on Nariman Point
Viral Marketing- Word of mouth
• Viral marketing depends on a high pass-along rate from person to person.
• If a large percentage of recipients forward something to a large number of friends, the overall growth snowballs very quickly.
• If the pass-along numbers get too low, the overall growth quickly fizzles.
Viral Marketing
• Word of mouth
Word of Mouth Publicity
On the internet
• On the Internet, viral marketing is any marketing technique that induces Web sites or users to pass on a marketing message to other sites or users, creating a potentially exponential growth in the message's visibility and effect.
Hotmail- Excellent Viral Marketing
• Hotmail--One example of successful viral marketing is Hotmail, a company, now owned by Microsoft, that promotes its service and its own advertisers' messages in every user's e-mail notes.
www.hotmail.com
Hotmail- Viral Marketing
• In 1996, Hotmail was a particularly unique email service in that it was free, could be accessed anywhere, and would allow the user to have multiple accounts.
• One of the interesting things Hotmail did was it would attach the message "Get your free email at Hotmail" at the bottom of every email sent by a Hotmail user.
• Once the receiving user clicked on the word "Hotmail" they were taken to Hotmail's homepage where the free email service was further explained.
• The plan, original at the time, worked. By 1998, Hotmail had accumulated 12 million subscribers. Hotmail eventually sold to Microsoft for a cool $400 million.
Cadbury’s in UK
• Cadbury's Dairy Milk 2007 Gorilla advertising campaign was heavily popularised on YouTube and Facebook.
Gorilla
• Gorilla is a British advertising campaign launched by Cadbury Schweppes in 2007 to promote Cadbury Dairy Milk-brand chocolate. The 90-second television and cinema advertisement, which formed the centrepiece of the £6.2 million campaign, was created and directed by Juan Cabral and starred actor Garon Michael. The campaign itself, which comprised appearances on billboards, print newspapers and magazines, television and cinema spots, event sponsorships and an internet presence, was handled by advertising agency Fallon London, with the online segment contracted out to Hyper.
Gorilla Ad Campaign
• Gorilla Campaign
Definition- Viral Marketing• The buzzwords viral marketing and viral advertising
refer to marketing techniques that use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-replicating viral processes, analogous to the spread of pathological and computer viruses.
• It can be word-of-mouth delivered or enhanced by the network effects of the Internet.
• Viral promotions may take the form of video clips, interactive Flash games, advergames, ebooks, brandable software, images, or even text messages.
• The basic form of viral marketing is not infinitely sustainable.
Going Viral
• Funny• Helpful & Unique• Controversial• Amazing & Spectacular
• Schematic
Word of Mouth
• Word of Mouth
Viral Marketing- Internet
• Social Networking sites
Close to 35 million internet users in India
• According to Internet market research firm comScore Inc. India had 34.6 million Internet users (who access the Web from their homes/offices) in June, of which at least 65%, or 22.61 million, accessed social networking sites.
• These figures have meant that people have kept launching new social sites in India fuelled by the hype but success is still far for them.
T-Shirts
• T-Shirts with company & Logo message
Inflated Balloons
Scooter covers