Marketing for Managers

Institute of Leadership & Management

• Publisher: Routledge
• Year: 2012
• Print ISBN: 9780080469744
• eBook ISBN: 9781136380150
• Edition: 5
• Topic: Business
• Subtopic: Business generale
• Index: Business

Super series are a set of workbooks to accompany the flexible learning programme specifically designed and developed by the Institute of Leadership & Management (ILM) to support their Level 3 Certificate in First Line Management. The learning content is also closely aligned to the Level 3 S/NVQ in Management. The series consists of 35 workbooks. Each book will map on to a course unit (35 books/units).

Session A

The marketing mix

1 Introduction

Marketing can be understood as the way that an organization ensures it has the right products, in the right place, at the right time and at the right price. Three of these elements are part of what is known as ‘the marketing mix’.

‘˜The marketing mix’ is a jargon term, but the idea behind it is very significant, because every product on the market is different, even if the differences only seem small.

Take petrol, for example. All petrol of the same grade is basically the same regardless of whether it is sold by Shell, Texaco, BP or anyone else. Even the price does not vary greatly between different petrol retailers in the same locality. However, every petrol company presents its petrol to the public in a slightly different way. Some have a mini supermarket on the forecourt, others just a small shop. Some offer tokens, gifts, loyalty cards and other promotional inducements, others don’t. Some concentrate on big trunk-road sites, others go for smaller urban locations. Some put their staff in uniform, others don’t. And overall, the style, decor, layout and advertising of the different companies are distinctly different.

All the details that distinguish a BP station from a Texaco station, and from all the others, play a part in building up the overall ‘package’ that the company offers to its customers. Individually, the impact of the details may be quite small, but together they make up a distinctive marketing mix. (And, actually, the petrol is the least important part of the marketing mix for petrol companies: their marketing people regard the petrol station as the product, not the fuel sold there.)

These differences are crucial in enabling the rivals to compete. They cannot truthfully say things like ‘Buy Octopus petrol because it makes your car go faster’, but they can say ‘Buy Octopus petrol because our service is better’, or ‘because our stations are cleaner and more modern’ or ‘because we share your particular lifestyle’.

2 The elements of the marketing mix

The marketing mix is the sum total of all the things that an organization does that have some impact on customers’ attitudes to its product – the total ‘offer’ that an organization makes to its market. Broadly, the elements are:

• product;
• price;
• place;
• promotion.

An organization that gets all these elements right may not sweep the market, but it will be able to compete; one that doesn’t won’t even be in the running. This applies to non-commercial organizations as well as those whose main objective is to make profits. So what does each of these elements consist of?

2.1 Defining the ‘four Ps’

• Product
• A product, whether it is a physical item or service, is made up of a number of elements that can include:

• its features;
• its design;
• its quality;
• the way it’s packaged;
• an accompanying guarantee and/or statement of conditions for its return;
• back-up services.

Take the example of a personal computer. The PC’s features may include the amount of RAM memory, the size of the hard drive, the monitor, speakers, sound card, keyboard, mouse, floppy disk drive, zip drive, CD writer, DVD/CD drive, modem, one or more software packages, and so on. The design of the casing for the various components could be in tower form or flat, and in one or more of a range of colours. The quality will depend on how reliable the components are and how carefully they are assembled together. The computer may come with a one to three-year guarantee; with a promise of a free visit from an engineer within 24 hours of being called out and repairs on site – or a service that involves taking the computer away. There may be a helpline to connect the customer to a technical adviser. If so, how long is the average wait in the queuing system? Finally, the computer and the accompanying peripherals will arrive in packaging that hopefully will be good enough to have prevented anything being damaged during transit.

This is the total product. But in deciding whether to buy a particular PC, this will not be the only thing that the customer will take into account.

• Price

The price will also have a major part to play in any customer’s decision. A higher than average price will not necessarily deter a customer who wants to be sure that they are receiving a quality product. Deciding on what the balance should be between price and quality is a marketing decision that will partly be based on what type of customer the company is aiming for. The price is not just the listed price. It is also any discounts available for purchasing at a particular time or any credit terms that are available.

• Place

Another factor that the customer will take into account is exactly where – and when – they can purchase the computer. Do they need to go to a retail outlet to purchase it – or can they just place an order over the phone or through the Internet? Either way, what are the hours during which they can make their purchase? Can they purchase in the evenings and on Sundays? If the computer is being sold through a retail outlet, how good are the transport facilities to the outlet? Is it easy to park a car nearby?

• Promotion

The final major factor that will influence the customer in making their decision about what computer to buy is the way it is promoted. Is it advertised on the TV or radio – or through the Internet and regular mail-shots? Is telemarketing used? When the customer decides to ring the company (if business is all done over the phone) or visit the retail outlet, how are they treated by the salesforce? Are the salesforce well-informed and prepared to take their time giving the customer advice and making them feel valued – or do they make the customer feel as though no one cares whether they place an order or not?

Taking elements in the marketing mix for a product

All these factors contribute to the marketing mix that will influence the customer in making a decision about what and where to buy. They are summarized in the diagram.

We have looked at the components of a marketing mix for a physical item – but all are equally relevant to a service, as the next activity will show.

Activity 1

Imagine you are fed up with the service you are receiving from your bank and you decide to look at the other banks and building societies near your home to decide if it’s worth moving your account to any of them. What kinds of factors will affect your choice under the following headings?

Product

______________________________

______________________________

______________________________

Price

______________________________

______________________________

______________________________

Place

______________________________

______________________________

______________________________

Promotion

______________________________

______________________________

______________________________

• Product

A typical bank or building society offers a number of services, including:

• current accounts;
• deposit/savings accounts;
• credit cards;
• loans and mortgages;
• life and general insurance;
• pensions.

Each of these services has a number of features. With the credit card, for example, comes a particular rate of interest, an annual fee or no annual fee, a stipulated number of days of interest-free credit, a credit limit, and possibly a points system under which points are exchanged for vouchers or reductions in certain bills.

When it comes to quality, it is important to consider the bank or building society as a whole. Does it offer telephone or on-line banking services? What is the attitude of the staff – are they friendly and helpful? Do they seem to have enough knowledge and expertise to talk sensibly about your needs? Are enough of them on duty during busy periods so that you don’t have to queue for long?

Other factors to consider are the general style and décor of the premises. Are they smart, clean, and kept at a comfortable temperature. Are notices, leaflets and forms neatly and clearly displayed? Is there a place where it’s possible to sit down and discuss the services being offered with a member of staff?

• Price

There are all sorts of factors r...

Table of contents

• Cover
• Title
• Copyright
• Contents
• A. The marketing mix
• B. Analysing the market
• Performance checks
• Reflect and review