FOCUS ON SATISFYING CUSTOMER NEEDS PROFITABLY
MARKETING MIX Marketing Mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its product. (Philip Kotler – 12th edition)
MARKETING MIX Thus, in performing their key tasks marketing managers have at their disposal a number of tools or ingredients they can use to develop marketing programs to create customer satisfaction and, ultimately profits for the organisation. The marketing mix is the combination of elements used by a business to enable it to meet the needs and expectations of customers. These tools or ingredients are often referred as the as the “ 4 P’s” : Product, Price, Place and Promotion and decisions on how to use these ingredients require ‘Marketing Research and Information’ .
MARKETING MIX “ Marketing Mixes have to be changed from time to time in response to new factors in the marketing picture. The firm can react to environmental changes in an expedient or a systematic fashion” Philip Kotler
MARKETING MIX ELEMENTS Product Price Variety List Price Design Discounts Quality Strategies Features Allowances Marketing Brand name Payment terms Mix Packaging Credit terms Target Market Promotion Place Channels Advertising Coverage Personal Selling Assortments Public Relations Locations Sales Promotions Inventory Direct Marketing Transportation
MARKETING MIX ELEMENTS • Product: is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. A product is everything both favorable and unfavorable that is received in an exchange. • Price: is the amount of money customers has to pay to obtain the product, or the sum of the values that consumers exchange for the benefits of having or using the product. • Place: includes all activities in order to make the product available to target consumers in the ‘right place’ and at the ‘right time’ . • Promotion: are the means by which an organisation attempts to inform, persuade, and remind consumers – directly or indirectly – about the products they sell.
THE EXTENDED MARKETING MIX Why Extended Marketing Mix? The advent of service into the marketing equation created issues for marketers to manage service situations with the existing marketing mix. Therefore there was a requirement to extend the traditional marketing mix with other extended elements. Thus, the traditional 4 P marketing mix was extended to a 7 P marketing mix.
EXTENDED MARKETING MIX ELEMENTS • People : Relates to all personnel dealing with delivering the marketing experience to the target audience. • Process : All procedures, systems and policies a consumer needs to go through in dealing with the organisation. • Physical Evidence : Deals with all aspects of giving tangibility to the intangible service offered to the consumer
EXTENDED MARKETING MIX ELEMENTS
Product Physical Evidence Price Marketing Mix Focus on Process satisfying customer’s needs Promotion profitably People Place
PEOPLE Relates to all personnel dealing with delivering the marketing experience to the target audience. Anyone who comes into contact with your customers will make an impression, and that can have a profound effect – positive or negative on customer satisfaction levels. The reputation of your organisation rests in your peoples hands.
PEOPLE • People are an essential ingredient in service provision; recruiting and training the right staff is required to create a competitive advantage. • Customers make judgments about service provision and delivery based on the people representing your organisation. This is because people are one of the few elements of the service that customers can see and interact with. • Staff require appropriate interpersonal skills, aptitude, and product/service knowledge in order to deliver a quality service.
PROCESS All procedures, systems and policies a consumer needs to go through in dealing with the organization. Processes are the way in which customers are served Co-ordination of activities and concern that customers be fully satisfied must underpin the systems and procedures. Efficient processes creates a competitive advantage
PROCESS Service areas to be considered: • Procedures, Ordering systems and Policies • Automation of processes (online or automated systems) • Queuing and waiting times • Information flow to service units and customers • Capacity management, matching supply to demand in a timely and cost effective way. • Accessibility of facilities, premises, personnel and services
PHYSICAL EVIDENCE Deals with all aspects of giving tangibility to the intangible service offered to the consumer. Physical evidence gives the consumer something to refer to and to show other people if necessary. Since service products are usually intangible, the consumer of (say) an insurance policy will need some written evidence of its existence in order to feel confident in the product” Jim Blythe – 2005
PHYSICAL EVIDENCE • Physical layout - supermarket, college, university, banks, airports • Image - Is Everything • Signage – providing instructions, information • Logos • Company vehicles, parking area • Employee Uniforms/name tags • Packaging - certificates • Letterheads • Business Cards, Catalogues, brochures • Ambience
Confirmation is always sought. If the physical evidence does not match customer expectations then the customer will withdraw. The role of the marketer is to design and implement such tangible evidence.
Seven P’s might be better described as the seven C’s: Producers View (7P’s) Customers View (7C’s) • Product • Customer Value • Price • Cost • Place • Convenience • Promotion • Communication • People • Consideration • Process • Co-ordination • Physical Evidence • Confirmation
DEFINITION OF A PRODUCT Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. (Philip Kotler – 12 th Edition)
A PRODUCT • A Physical good: Car, television, soap, laptop • Person : Kumar Sangakara, Cristiano Ronaldo, Bill Gates • Place: Bentota, Sydney, Paris, New York. • Organization: UNICEF, Red Cross, SLIM, CIM, • Idea: Safe Driving, Family Planning • Services: Banking, Telecom, Health care, Transportation, Education • Experience: Disney, Movies, Sports
FIVE LEVELS OF A PRODUCT Potential Product • • Augmented Product • Expected Product • Basic product • Core benefit
FIVE LEVELS OF A PRODUCT Level 1 - The Core benefit The fundamental level is the core benefit: the service or benefit the customer is really buying. For example, in the case of a car this might be, say, “transport”, a hotel guest is buying "rest and sleep", the purchaser of a drill is buying "holes” . Marketers must see themselves as benefit providers. Level 2 - The Actual or Basic Product At the second level, the marketer must turn the core benefit into a basic product. They need to develop product features, design, quality level, a brand name and packaging. For example for a car: design, efficiency, air bags, power steering etc.
Level 3 - The Expected Product At the third level, the marketer prepares an expected product, a set of attributes and conditions buyers normally expect when they purchase a product. Clearly, when these attributes exceed the buyer’s expectations the organisation will have satisfied and delighted customers. Level 4 - The Augmented Product At the fourth level, the marketer prepares an augmented product around the core benefit and actual product by offering additional services and benefits that differentiates the organisation’s offer from competitors.
Level 5 - The Potential Product The fifth level of the product is the potential product, which encompasses all the augmentations and transformations that the product might ultimately undergo in the future to enhance or develop the product.
PRODUCT CLASSIFICATIONS Products fall into one of two general categories such as Consumer products and Industrial products or Business-to business products. Consumer products are products and services for personal consumption and classified by how consumers buy them Convenience products Shopping products Specialty products Unsought products
CONSUMER PRODUCTS • Convenience Products - Staple, Impulse, Emergency Relatively inexpensive & Frequently purchased Customer puts little effort into the purchasing decision Convenience takes priority over brand loyalty Example- Bread, Milk, Soap, Groceries (FMCG)
SHOPPING PRODUCTS Less frequently purchased Customers compare on suitability, quality, price and style Purchase is usually made after a good deal of advance planning and shopping around Examples:- bicycles, cameras, furniture, consumer durables etc…
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