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Developing Your Marketing Mix

Developing Your Marketing Mix. Chapter 18. What is a Marketing Plan?. Used to communicate a product to the customers: Shows competitive advantage Explains value proposition (benefits vs. price) Example: Disney Vacations, Satellite TV Market Driven- All decisions are based on the market.

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Developing Your Marketing Mix

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  1. Developing Your Marketing Mix Chapter 18

  2. What is a Marketing Plan? • Used to communicate a product to the customers: • Shows competitive advantage • Explains value proposition (benefits vs. price) • Example: Disney Vacations, Satellite TV • Market Driven- All decisions are based on the market.

  3. 4 Steps of Developing a Marketing Plan • Consumer Analysis • Market Analysis Ex. Nielsen (www.nielsen.com) • Development & Combination of the Marketing Mix (4P’s) • Break –even analysis

  4. Step One: Consumer Analysis (Profile) • Market Segmentation: Consumers who have a similar response to a certain type of marketing. • Example: Volvo – Target’s women with young children – “Safety” • Surveys and Questionnaires • Focus Groups and Product Testing

  5. Step Two: Market Analysis • Use Market Segmentation to break down by Psychographics, Demographics, Geographic's, and Buying Characteristics. • Niche Segment: Very small group of customers. • Example: Rolls-Royce – Sells low quantity at high prices

  6. Step Three: The Marketing Mix • Combine the 4P’s (Product, Place, Price, Promotion) • Be careful, if you change one “P” it might affect the rest. • Example: Location of a fur coat store.

  7. Break-Even Analysis The break-even point (BEP) is the point at which cost or expenses and revenue are equal.

  8. Break-Even Analysis

  9. Marketing Mix | 4 P’s of Marketing Marketers use different tools in order to get the desired response from the customer or best satisfy their needs. These tools are known as The Marketing Mix. Marketing Mix is probably the most famous term in marketing.

  10. Marketing Mix The important thing to note is that all these four P’s (variable) are controllable, subject to internal and external constraints of marketing environment. Marketers, using different blends of these variables, can target different group of customers having different needs. So, a customer may call  marketing  mix “the offering”.

  11. Marketing Mix

  12. Pricing Strategies • Penetration Strategy: Initial low prices to gain market share • Example: Low Airline Prices, Wal-Mart • Skimming Strategy: High initial prices to recoup costs • Example: Plasma TV’s • Meat Beat the Competition: Match what competitors are doing (Wal-Mart Article)

  13. Pricing Strategies • Keystoning: Doubling the COGS to arrive at the retail price. • Example: You pay $2 for a bracelet and sell is for $4 • Cost-Plus: Figure costs and then add profit

  14. Pricing Strategies • Value Pricing: Find the balance between quality and price. Value is NOT the same as cheap! • e.g. Some customers will pay extra for prompt delivery. (Fed-X) • Customers assign a personal value to a product or service e.g. a teenager is willing to pay a premium price for a concert performed by his idol.

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