Explain in detail the concept “marketing mix”
All business’ must determine their own marketing plan based upon their own needs and goals of racketing, as a result of this Blabbing Australia makes extensive use of the marketing mix in their marketing plan. Legal and ethical Influences also need to be considered when developing a business’ marketing mix. Whilst many of these factors are dictated by legislation business’s must also take responsibility for their own actions and ensure that their products and practices meet the standards in the community.
A marketing plan will include not only the marketing mix but also a SOOT analysis, marketing objectives, the target market, marketing strategies and details on implementation, monitoring and controlling the plan. Developing a marketing plan involves determining the type of selling the business wishes to use whether it be customer orientated or conquest marketing. The business also must conduct extensive research before developing its marketing mix and ultimately its marketing plan. The marketing mix is commonly defined as “the four Up’s” for product, price, promotion and place.
These four elements determine how a business will structure a large proportion of its marketing plan. These elements are also strongly determined upon the influences of the market in which the product or service is to be sold such s psychological, calculators, economic and government factors. As the marketing mix takes into account these factors, the business’s goals both long and short term and tailors the business’s marketing plan to Its target market It Is the most Important element when developing a marketing plan.
All four elements of the marketing mix must also must integrate and be managed effectively for marketing success. Product must take Into consideration all aspects about the product or service that a business Is trying to sell to Its customers. It Includes Issues such as quality, features, Tyler, brand name, packaging, sizes, warranties, etc. Businesses need to consider their products on three different levels; the core product, the actual product and the augmented product. These three different levels of products bring with them their target market will respond the product.
The core product consists of the installation, packaging and the core benefit or service it answers the question what is the buyer really buying?. The actual product includes the features, styling, quality, and the brand name it is all the parts and features that combine to deliver the core product. The augmented product is the after-sales service, warranty, delivery and credit and the extra consumer benefits and service provided by a business. The business must highlight and empathetic the parts which they have determined through their market research that their clients want.
They must also promote areas which the customer may not be aware of and encourage them to buy the product. The business must also take into consideration the positioning of a certain product and how this will affect the sales of the product. Positioning helps customers to understand what is unique about the products when compared to others and what advantages a product has. There is numerous positioning strategies that a business uses each dependent upon the target market and who the business is trying to sell their product to.
For example positioning a product by benefit will involve highlighting features of the product to satisfy the needs and wants of customers. Whereas positioning by price or quality can be based on either value for money such as generic brands, Home Brand and No Frills, or on higher quality and therefore larger amounts of money, such as David Jones. Blabbing Australia have diversified their range to include items not only related to riffing but also snow boarding, skating and accessories.
It has positioned itself as a high quality, high priced, fashionable product and generates lots of customer satisfaction by utilizing quality products which will not ruin easily despite the harsh conditions of many of their products intended uses, such as swimmers, skis and snowboards. Blabbing has also been successful in branding itself into a internationally known company through its wave logo and sponsorship of international events. In doing this it has not only gained international markets but has also become a prestige and status symbol for its target market.
The product and positioning of Billions products is the most important element in its marketing mix as it ensures the long term survival of the company and continued high sales. By meeting customer demand, positioning itself as a well known and trusted brand with a vast amount of prestige it has ensured that sales remain high. Price is also an important feature of the marketing mix, as price will determine how much money a business will make from the sale of its products. Many different pricing strategies are used by businesses to determine the final price of a product.
These include cost-based pricing in which the business prices the cost of the product on the cost of production, called a mark-up. The level of mark-up is designed to give the business a particular level or profit. There is two main type of cost based pricing; cost-plus pricing, where the business simply adds a mark-up to gain a profit, and breakable pricing in which the business adds only a mark-up which will mean the business will breakable with all the costs of production including after-sale costs. Regardless of the costs. This is the common pricing system in commodity markets.
Competition-based pricing is the most widely used pricing system by businesses. A business will use the prices set by their competitors as a guide for their own pricing decisions. Businesses will prices their product at, below or above their competitors. Value-based pricing is where the business will base their price on the perceived value of a product. Market skinning tactics results in high product prices to create a prestige about the product and position it as a status symbol. Penetration pricing tactics is when businesses set their prices below that of their competitors so as to make its products more attractive.
Whereas loss leader tactics set some products at below cost price in order to encourage customers into the shop where they encourage them to buy additional products with an increased mark-up. Both internal and external factors determine which pricing strategy a business will use when setting the prices of their products and these factors are largely determined by which market a business is targeting. Blabbing uses a competition-based pricing method in which it sets its prices at a similar level to those of its competitors to ensure that their customers will not wish to buy the cheaper products.
However it rarely uses below market value pricing so as to avoid creating a false image of its products quality as inferior and less prestigious. Promotion comprises of advertising, sales promotions, personal selling and public relations. Each business will choose the combination of these elements and how important they are in their promotion mix. Personal selling comprises of sales persons outlining features of products or helping a customer choose a particular model or style. Personal selling is mainly used when the product can be changed to meet individual wants or has to be displayed to potential customers.
Advertising is he most effective way of communicating with a target market and all businesses use this in their promotion mix. It allows the message to repeated a number of times and can reach a lot of potential buyers at a low cost per person. Advertising can either be above the line such as media or below the line which includes coupons, free samples, displays, etc. Public relations is the use of publicity to develop a good image with the target market and in the community. Businesses must promote their products to ensure a long life span and must constantly seeks to attract new and existing customers to buy their products.
Blabbing uses a strong promotion mix to highlight and reinforce its image and product. A combination of an interactive website, promotional magazines and flyers, personal in store selling and strong public relations through both sponsorship of sporting events and high profile sporting stars using their products have created a strong promotional mix which reinforce and continue a strong brand identity amongst its target market. Billions sponsorship of international sporting events and sporting stars also helps to promote their brand not only in Australia but also on the international market as well. Reek place and to its customers. Distribution channels need to be established in order to achieve this goal. They involve various businesses, intermediaries, which allow the product to flow from the source of the product to its final destination of the customer. Businesses need to decide upon how they will distribute their products to the retailers for sale to customers this may be a direct process or may involve the use of one or more wholesalers. This decision will depend upon money time and the volume of products that a business will be likely to sell and the difficultly of selling their product to their final customers.
There is also is different levels of distribution intensity. These being intensive where the product is sold through as many outlets as possible, selective where the product is widely distributed through particular channels or exclusive where the product is available at particular outlets. Blabbing uses various methods to ensure that their product reaches the market place. With stores in more than 90 countries Blabbing uses wholesalers to ensure that their products reach the retailers.
Billions positioning also comes into effect with place as it must ensure that its product remains out of discount and department tortes and remains only in specialty stores. Because of this Blabbing has adopted a exclusive distribution network where the product is only available in specialty surf shops. When developing the marketing mix many legal and ethical influences come into play. The business must strictly adhere to legislation both state and commonwealth. By adhering to legal and ethical aspects of marketing businesses are affecting their ultimate goal of achieving a profit.
Business are expected to produce environmental friendly products, and carefully monitor the creation of needs, the impacts of retail evildoing, ‘issuing’ and higher costs. Consumer law controls deceptive and misleading advertising, price discrimination, implied conditions and warranties and retail price maintenance. The main laws which governs business behavior in Australia are The Trade Practices Act 1974 (Act) and the Fair Trading Act 1987 (NEWS)Greater concern for environment protection has been one of the fastest growing concern amongst consumers during the last few decades especially during the sass. OTOH consumer demands and government regulations have created change and made businesses be more environmentally friendly both with production ND packaging. Many businesses have responded with ecologically safer products, recyclable or biodegradable packaging and cleaner production methods. Whilst this has meant that businesses have had to spend a large amounts of money to achieve this they are now recovering that outlay by customers wanting to buy their products as they are environmentally friendly.
One such example of this is Wattle paints who recovered the $100 000 outlay in one year from the installation of new equipment which recycled waste products in their factory. A business, through promotion and advertising, creates desire for their product which develops the creation of needs. Constant changes to designs allow for the consumer to see a new product which is more appealing rather than responding to producers cause their products to become obsolete before they should actually need replacing. It is claimed businesses redesign their products in order to generate more buying.
This is often seen in clothing whereby designers constantly change what they perceive to be fashionable thereby encouraging customers to buy new clothes every season instead of using last seasons clothes which in many cases do not need replacing. The impacts of retails development is often something which consumers demand that businesses take responsibility for. The size of these shopping centers and the availability of larger amounts of shops has put pressure on smaller businesses and shops causing prices to rise.
Other problems which are associated with large shopping centers include traffic congestion, parking problems, noise and air pollution. ‘Issuing’ is the practice of using research as a disguise for selling. Some businesses have used surveys to guide customers towards their products. Society deems this to be unethical. Marketing is also associated with high costs for products. Research has shown that people are prepared to pay more for products that they feel have better quality and are well known consumers buy more than the product itself.
Whilst marketing achieves this by promoting a brand name the question is whether marketing creates or responds to consumer demand. Consumer laws affect the marketing activities of businesses they regulate multiple areas. Deceptive and misleading advertising is unlawful and advertising must always be truthful. Price comparisons, specials, and free gift offers must all be true and cuisines must avoid bait and switch advertising. There is a fine line between deceptive and misleading and stimulating and creative advertising.
Price Discrimination is also illegal under both the federal and state laws. Retailers must sell products as the same prices to a given level of trade for example Target and a local clothes shop. It is only allowed if the seller can prove that its costs are different between the two retailers, the seller makes different qualities of the same product for different retailers or the retailer is trying to temporarily meet local competitors’ rises. Implied conditions and warranties are also monitored under legislation.
Manufacturers and retailers are responsible for product safety and performance for this reason most manufacturers provide written warranties on their products. Implied conditions are that products must be fit for the intended purpose, that their description is accurate and that the seller has the right to sell the products. Retail Price Maintenance ensures that a retailer can price goods at any price they like and manufacturers cannot refuse supply if retailers refuse to sell a product at that price.