CIMA E1 Syllabus E2. Marketing - Marketing mix - Notes 3 / 11
What is the marketing mix?
The marketing mix for products consists of 4 P’s:
Price - This considers the 4 C's:
Cost - The price must be high enough to make a profit
Customer - What is the customer willing to pay for the product? (it includes any credit policies and discounts offered to the customer)
Competition prices - Is our price higher than the competition?
Company objectives - The company may decide to initially set a low price to gain market share.Product - This includes the core benefit of the product, the actual product and the augmented product.
The core benefit is what the product must provide / the need that is being fulfilled when the customer purchases the product.
The actual product includes the features, design, brand name, quality and packaging.
The augmented product includes the extra bits that are provided with the product, for example, installation, customer service and delivery
Place - This is where we market the product.
It includes distribution channels, transport, warehouse and sales outlets.
Promotion - This is basically advertising the product.
It includes all marketing communications which let the pubic know about an organisation’s products and services.
Effective product promotion is based on customers and communication.
The group to whom marketing efforts are addressed also affect the approaches taken.
B2C: These buyers are inexpert and susceptible to promotional messages. Promotion is done via newspapers, internet, etc.
B2B: These are expert buyers and will try to bargain to get discounts and lower prices. Promotion is done via catalogues, sales representatives, etc
B2G: Specialised negotiation tactics and promotion is needed.
Push promotion involves transferring finished goods to intermediaries who then have the task of selling those goods to customers.
The marketing mix for services adds on another 3 P’s:
People - All service staff are considered here
Process - How is the service is delivered? The more friction free, the better
Physical - This relates to physical evidence of a service that can be viewed by customers, for example testimonials of customers of a service received posted on the company website.