Beruflich Dokumente
Kultur Dokumente
Marketing Mix to
Dead Dogs
The Marketing Mix
Product
Physical
Environmen
t
The
Marketing Price
Mix
Process
Promotio
Place n
2
The Marketing Mix
a “grounding” concept that offers tools &
pointers when a business evaluates & defines its
marketing strategy, objectives & activities - what
it seeks from its target markets & how it does it
7Ps – Price, Product, Promotion, Place, People,
Process, Physical Environment
Traditional 4Ps + 3Ps to cover service industry
growth
3
The Marketing Mix
Physical Product
Environmen
t Design
Usefulness
Convenience
Proces Value
The
s Quality
Marketing Branding
Mix Associations
Place Accessories
Technology
ecoCredentials
Promotio
n
Packaging
Price/ Warranties
Pricing
4
Product – see slide 28
methods to improve/differentiate
the product to target & increase sales
more effectively
to gain a competitive advantage e.g.
USPs
extension strategies
specialised versions
new editions
changed packaging
5
Pricing
6
Penetration Pricing
price set to ‘penetrate the market’
Penetration Pricing
‘Low’ price for high volumes
"Dumping"?
Price
typical in mass market products – Whole
chocolate bars, food stuffs, household market price
good, etc.
suitable for products with long life
cycles
useful for launching in new market
problem to raise price
subsequently
Quantity
7
Market Skimming
“Skim the cream (profit) off
the top first” pricing
Skimming Pricing high price for those willing to
pay then aim at more price-
Price Sell at high
price before sensitive consumers.
reducing to
Initial next price level
skimming and repeat
price High price, low volumes
Second
Suitable for products with short
price life cycles or soon facing
competition (e.g. after a patent
Final
price runs out)
e.g. Harry Potter hard-back,
Playstation, digital technology,
Quantity
new DVDs, etc.
8
Value Pricing
Price set according to
perceptions about the
value of the
product/service
e.g. status
products/exclusive
products
9
Loss Leader
10
Psychological Pricing
11
Going Rate (Price Leadership)
Where there is a price leader, rivals can't
compete on price
too high & lose market share
too low & price leader matches price &
forces smaller rival out of market
So follow pricing leads of rivals with
dominant market share
Where competition is limited, ‘going rate’
pricing may apply – banks, petrol,
supermarkets, electrical goods – similar
prices all outlets
12
Discount Pricing
Quantity Seasonal
Discount
Pricing
Sale Cash
Trade
13
Tender Pricing
14
Tender Pricing
Many government
contracts awarded via a
tender
Firm (or firms) submit
their price for carrying
out “the work”
Purchaser then chooses
which offers best value
A European consortium led by Airbus
recently won a contract to supply
Mostly done in secret
refuelling services to the RAF – priced
at £13 billion!
Title: Air refuelling. Copyright: Getty Images, available
from Education Image Gallery
15
Price Discrimination
Charging a different
price for the same
good/service in
different markets
Requires each market
to be impenetrable
Requires different price
elasticity of demand in
each market
16
Destroyer Pricing/Predatory Pricing
17
Absorption/Full Cost Pricing
Full Cost Pricing – set price to
cover both fixed & variable costs
Absorption Cost Pricing – Price
set to ‘absorb’ some fixed costs
of production
Price of some products in a
portfolio therefore need not be
full cost
18
Break-Even Point
Cost-volume-profit (at a price) analysis
19
Contribution Pricing
Contribution = Selling Price – Variable (direct costs)
From break even analysis
Set price to cover variable costs+ a ‘contribution’ to
the fixed costs
Similar to marginal cost pricing
20
Cost-Plus Pricing
24
Process
26
Physical Environment
making the physical environment as
welcoming & as reflective of the
“product/service brand” as possible
e.g. car showrooms - well lit, stylish
furniture & decor, seating, coffee
making, newspapers & play areas.
ambience, mood, presentation
smart/shabby?
trendy/retro/modern/old fashioned?
light/dark/bright/subdued?
romantic/chic/loud?
clean/dirty/unkempt/neat?
music?
smell?
How to achieve this for WWW site?
27
The Marketing Mix Recipe
The recipe/blend depends upon:
marketing objectives
type of product
target market
market structure
rivals’ behaviour
marketing position
28
The company's Product Mix
(Product Portfolio)
The assortment of Product Mix (Portfolio)
product lines &
Dimensions
individual offerings
available from a
Width: number of product lines
company.
Length: total number of items in
Product Line mix
A series of related Depth: number of product
products. variants
Consistency: degree to which
Individual Offering
product lines are related
Single product within a
product line.
29
Maple Leaf Foods International
Mix/Portfolio
WIDTH OF ASSORTMENT
30
Product Strategy & PLC
• stages products go thru
from development to
withdrawal
• each product may have a
different life cycle
• stage determines revenue
capabilities
• relevant to strategic
marketing planning
32
Product Development: Questions
34
Stages of the New-Product Development
Process
Business
Strategy
35
Concept Testing
Concept screening
marketing research project to
Test marketing
select areas typical of total
37
Growth
increased consumer awareness
sales rise, revenues increase
break-even point & cash flow
see "rising Star" Boston Matrix
more investment – production capacity
fixed costs/variable costs
cash flow, contribution
more market penetration, new entry
monitor market – competitors reaction?
defend product – patents, copyrights
38
Cost-Volume-Profit Analysis (Break-even
Point)
Dolly Toys - BreaK-even Chart
250000
200000
Revenue
£Revenue/Costs
150000 FCosts
VCosts
100000 TotalCosts
50000
0
Fixed costs £74,000
00
00
00
00
00
00
00
0
0
20
60
10
22
14
18
26
30
34
Volum e
Unit variable cost £44.24
Selling Price £68
Contribution £23.76
BE Volume 3114 units
BE Sales £211785
39
PLC: Maturity - Saturation
new entrants flood into market. Sales peak
greater competition, copy-cats
protect market share, promotion & support costs rise
differentiation, branding & brand extensions
penetrate new markets e.g. international? M&A
Licensing, pricing e.g VW-Skoda + joint ventures
pressure to develop new strategies
lower production costs
move to low labour cost market
branding to differentiate
improve standards & quality
40
Extension Strategies
Time
41
PLC: Decline & Withdrawal
42
Alternative Product Life Cycles
es,
J o n
i an a
, In d V W e -
l e s D , e , r
e a t i P O a n g
s , B e tt , O r ,
vi n r k es
El B e n
c k w o
r sa r i
n y l o v e e r
To le, C Anni s p a p
e e t g , e w
B e r i n " , n
a s t o n s
M l ect i
o l ft s
"c vd gi
c d / d
43
Decay Curve of New-Product w t o
Ideas
. H o h
i st s u n c
a r t , la
u s ic h e m
- m r d t m
p o p e c o f ro
e w , r n e y
N h e m m o g ,
d t k e c in
fin , m a
“ ? D a n
h em b i e s m e
t n a , C o
w a n h e r
" ro t k e r
ig B n o o
B s, S
a r t
D
44
Boston Consulting Group Matrix
45
Boston (Box) Matrix
Rising stars Problem Children
High
Market
Growth Cash generator Dogs
Low
High Low
Market Share
46
Stars
products experiencing high growth rates
potential for more high revenue growth
Implications:
huge potential
copying by followers
47
Cash generators
Implications:
cheap to promote ?
branding &
differentiation
high market share but low at maturity stage of
growth – PLC maturity PLC?
operating efficiencies generate lots of cash –
use for M&A, + more
low cost support R&D?
high cash revenue – positive monitor performance –
cash flows the long term?
Defend, extend market share threats ?
refresh the product 48
Problem Child – Question-mark
low market share in Problem children
–spend
growth market good money after
need investment to bad ?
develop, compete, enter
new segments/markets
etc
cannot afford to
buy/acquire market Implications:
share? What chance for these products
worth it? 49
Dead dogs
Product is starting to
low growth market embarrass the company?
low or declining
Implications:
market share (PLC)
Are they worth persevering
negative cash flow, with?
large support costs How much are they costing?
divest Could they be revived? How?
management pets How much would it cost to
buy out? continue
to support such products?
How much would it cost to get
out of the market?
50