Marketing Mix Essay Example

Marketing Mix Essay Marketing mix is simply a technique used to promote a product or a service, which can consist of many factors such as advertising, pricing, packaging, labelling, branding and boosting the product/service provided. Marketing mix is applied to most, if not all products and services provided by any company in the private sector, with the aim of increasing sales or demands for a specific product/service. Companies use marketing mix techniques to increase sales on certain products. E.g. they may use Premium Pricing on certain products and services. This means that the product or service will have a very high price, however, it will be worth it as the product or service may be unique, luxurious or may have a special designing and etc. Premium pricing is always aimed at higher class people who would be able to afford such products services, and any high street stores would also be located in a posh area. Marks Spencer is a typical example of a company which uses premium pricing, as their products are considerably higher than other average or unpopular brands. However the quality of their products is also higher, and although the prices more expensive the company still manages to make profits. We will write a custom essay sample on Marketing Mix specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Marketing Mix specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Marketing Mix specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Penetration Pricing is also another technique which helps companies increase sales. This is when a product or service is new or is not very popular, therefore its price is set really low at the start. However once it has become more popular, the price is set higher so that companies and suppliers can increase profits. This technique is normally aimed at mid-class people who would be looking for cheaper deals, but would however be willing to spend a bit more if necessary. Most retailers e.g. Tesco, Sainsburys, Marks ; Spencer and etc are examples of companies that use penetration pricing, as when they first launch a product or it is not popular enough they use this technique as well as Buy One Get One Free (BOGOF) deals to increase sales. However as soon as these products have gained customers preference, companies set their prices higher in order to increase profits. Economic Pricing is when products and services are set very low to attract customers who would be looking for cheaper deals. These products and services are normally from unpopular brands, however the quality may still be the same as the quality of any other popular brand. Again most retailers such as ASDA, Morrisons, Tesco and etc use this technique, but unlike premium or penetrating priced products, this technique is normally applied on products of their own brand which customers tend to think have a lower quality than other popular brands. Price Skimming is another technique used by companies and suppliers. Prices are normally very high, because these companies and suppliers know they have an advantage over other brands, therefore they know they will still make a profit. However when prices are very high, it may attract many competitors that may claim their quality is just as good and reliable, which can cause price skimming companies to lose customers and lower their products prices. Dolce ; Gabbana, Gucci, Apple, Sony and etc are all examples of companies that use price skimming. All these companies set their products at a very high price, knowing that their customers will still be loyal to them and that they will still be able to make a profit. All these techniques can be represented by the picture below: As well as considering the techniques above, companies and suppliers also take into account the Three Levels of a Product. This is what the product is and what other features may be added to it to make it more valuable, this can be separated into three phases Core Product, Actual Product and Augmented Product. Core Product is what the product really is, and what the main benefit that customers can get out of it is. Every product has its core, no matter how simple or posh it is. Actual Product is an addition feature which can be added to a product in order to increase sales. This can be the colour or quality and etc of a product, most products have this to help boost their sales. Finally comes the last level of a product, Augmented Product. This is the advantages of a product, i.e. why the product is good to use and what jobs and tasks it can do. Additional facilities of a product are also on this level, e.g. delivery, warranties, installation and etc. All these techniques can be seen on the image below: Companies and suppliers must also consider the Product Life Cycle. Product Life Cycle is simply the life of the product from when it is first developed and introduced to its customers to the stage where it is withdrawn or renewed, with other stages in between. I.e. the development is when a product is designed, targeted at an specific audience and finally manufactured. When a product is first introduced many people are not aware of it, therefore sales are very low and the product is hardly able to cover its costs. Then comes the products growth, which is when the product is advertised and becomes known by some people. After its growth comes the products maturity, which is the prime stage of any product where it is known by majority of people and its popularity amongst customers is huge. However after a period of time the product becomes old and starts to decline, and if the product is too successful other competitors may launch a more advanced product which may outgrow the current on e. And eventually once a product becomes too outdated and advanced by other products it is finally withdrawn. However the same product can still be renewed, i.e. new features, applications and technology can be added to them, as well as targeting a larger audience than the previous product and etc. By doing this companies may boost sales, which can eventually be turned into more profits. Apple is a very common example of a company that has been able to do this through one of its products, i.e. IPod. IPods have been launched many times, with new applications, features, sizes, colours and etc increasing and boosting Apples sales. Products such as mobile phones, cars, computers and most products that may be involved with technology are normally known to have a product life cycle, which can be seen in the picture below: Application of Marketing Mix: For my description of how marketing mix is applied to products of companies in the same sector I chose two mobile companies, O2 and Vodafone. O2 and Vodafone offer a range of products and services to their customers, e.g. pay as you go mobile phones, monthly pay mobile phones, broadband internet and etc. The product I have chosen is a Sony Ericsson C902 Titanium brand new high tech mobile phone, which is available in both companies for sale and for contract at different prices and deals. Vodafone as well as O2 may use marketing mix to increase demands for the phone, and even beat each other in the number of sales and contracts recorded. E.g. on certain stores in the high street both companies advertise the mobile on their glass windows and doors, which say some of the features of the phone, how much they are available for and how long the contract would be. As well as that these stores also put big pictures of the phone on their windows, so that customers may get an idea of how the phone looks like and again to emphasise some of its special features. On their website however only newer phones are displayed on their home page, and to find this mobile you can either type it up on the search bar or look for it through the website. Once you locate the mobile, both websites tell you in details what the phones features and prices are and if it is available for pay go and if it is, how much it costs. Even though both companies do not advertise the mobile as much on their website, they have added special features on their websites which helps customers have an overall view of the mobile phone, which may make them want to get it. E.g. both websites allow you to view the phone in a 3D video which again shows you the main features of the phone, and the websites also allow you to see the overall rating that other customers have given to the mobile phone. In magazines and newspapers where the mobile phone is advertised by either O2 or Vodafone, marketing mix is again used by both companies to increase the demand for the phone and also to be more competitive and attract more customers. In magazines and newspapers both companies not only advertise the main features of the mobile phone but they also claim that by getting a contract with them it will save customers money, hassle and most importantly the customers themselves will be getting more minutes and texts. Legal and Ethical Issues: As to any company in the private sector, there are always drawbacks which can obstruct or completely impede customers from purchasing or using the product or service provided by a company. There are also other factors which may make things more difficult for companies to provide, sell or offer products/services. Examples of some drawbacks in both companies are listed below: Copyright regulations can be a big barrier to both companies, i.e. O2 and Vodafone as well as other competitors are all at risk of having their ideas stolen and copied. There are always numerous debates and arguments between rival companies that blame each other for copying or stealing their ideas, and later on editing them and claiming they are their own work. However if it is proven that any company has copied or stolen another companys ideas and projects, they can be fined and even asked to withdraw their current project, which could lose them many customers as well as causing damage to their reputation. Data Protection Acts are another drawback for both companies, as they must ensure that all details about their customers are kept safe and inaccessible for anyone who cannot be trusted by the companies. They must make sure that they only keep customers details for as long as it is necessary, i.e. if customers decide to cancel their contract, their details should be deleted immediately to avoid any further problems and etc. Both companies must also make it clear to their customers about what information is required from them, why it is required and how these companies will manage and handle their information. Competition is another major issue for these companies, as they must both provide their customers with special deals, promotions and bargains all the time. Competition also causes rival companies to lower their prices as much as they can, which can even minimise their overall profits. Certain adverts may look or sound offensive to a group of people or culture, e.g. adverts which are specifically aimed at men may have some sexist content in them, which may make women stop buying that specific product to their partners, families and etc. This can not only cause people to stop buying that particular product, but it can too damage the companys reputation. Manufacturing products can also be a constraint for certain companies as they may use cheap labour overseas to save them money. Some organisations also make their employees work very long hours, under poor conditions for very little money. If it is proved that a company uses hard labour overseas to manufacture their products, its reputation can be damaged and human right actions can also be taken against them. The Sales of Goods Act is another law imposed to these companies as they must provide their customers with the exact same product/service they advertise, i.e. all promises about that particular product must be kept and no misleading detail about it should be advertised. Again if it is proven that they have given any misleading detail about that particular product, customers can personally take legal actions against that company, which could eventually lose them money and customers loyalty, as well as damage to its reputation. The Trade Description Act is another drawback for O2 and Vodafone, as sometimes they may give misleading or very short descriptions of the service they provide. Although some companies do this people do not normally take legal actions against them, however this can still cause damage to their image as well as loss of customers loyalty. Distance Selling Regulation is another main constraint for companies that provide distant customers with products or services. They must show all details about each product or service available, how and when it is going to be delivered or available for collection, if customers will be entitled to a full refund if they are not happy with the product, and most importantly companies must make sure to all customers how safe their details will be with them. If companies do not provide enough information about them, the product or service and delivery availability, customers may choose to shop somewhere else where they think may be better for them.