Revision Notes

Marketing Mix

  1. Marketing mix refers to the range of variables making up marketing. Various books give different 'mixes'. The mix may be 4,5,8 or even 20 elements.
  2. Market research: desk and field. Field is new data and will be specific to the task; desk is old and may not be specific. Market research aims to find out the size, nature and scope of the market. In collecting data sampling will be carried out (random, sequential, stratified). Sources include interviews, test marketing, consumer panels and observation.
  3. Price: this is usually set to cover costs unless it is a loss leader. (This is where price is below cost to entice the shopper into the shop where he/she will buy more products). When setting price the responsiveness of the consumer (price elasticity of demand) will be considered. Other pricing strategies include skimming (high price, new product) and penetration (low price to break into the market).
  4. Branding creates a feeling of security and consistency in the mind of the consumer. Demand may become inelastic (less responsive to price changes) and a successful brand will enable the manufacturer to sell complementary products. Brands have a value and feature under intangible assets (in Fixed Assets) in the Balance Sheet.
  5. Advertising aims to persuade, remind and inform the consumer. If successful, demand will increase sufficiently to cover the costs of the advertising campaign. Advertising has been criticised for being unethical as it encourages materialism and (arguably) exploits women/men/children.
  6. Sale promotion - short-term incentive, typically used to extend the product life cycle. Examples include BOGOF (Buy One Get One Free).
  7. Packaging carries information about eh product. May be linked to promotion through tear-off coupons. Also, via bar codes, aids stock control.
  8. Channel of distribution refers to how the product is sold i.e. via wholesaler, retailer. When selling overseas an agent or a merchant may be used.
  9. New product development. When developing a new product consider costs and target market. Product is likely to go through screening (assessing resources needed and viability of the project) before being test marketed (trialled at a 'typical' section of the population) before being launched.
  10. Marketing mix is the range of variables involved in marketing - not to be confused with product mix which is the range of products and production mix which is the range of variables used in production.
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