Marketing Mix

Marketing

Marketing is often a new area for designers to consider.
Exploring unfamiliar aspects of innovation improves their understanding of the market needs of the products they are designing.

Empathy for, and understanding of the target audience is developed through thorough analysis of the market chosen.
This informs several factors:

Product: The standards that end users demand.

Place: How and where to distribute and sell the product.

Price: How much consumers are willing to pay for a certain product and its quality.

Promotion: And how to communicate the launch of a product.

Correct analysis of these factors could determine the success or failure of a product, despite its quality.

Four factors identified through market research that provide the designer with an accurate brief of market requirements.
Often shortened into the "4 Ps", which are product, place, price and promotion.

Product

The product sector of the marketing mix assesses the quality and appeal of the product.

The standardization of products is also an important factor.
Product standardization is the process of setting uniform characteristics for a particular product, system or service.

Government Standards for a Particular Market Segment

Where a government sets standards for products.
For example, in Europe there is a Health and Safety standard assigned to products that pass quality and safety tests.
It is the CE mark on most electrical devices.

Component Standardization

Where a part is standardized.
For example, USB ports or plugs have standardized connectors so they can be used in different or similar products, such as memory sticks or computers.\

Industry-Wide Standards

Where a certain industry sets standards for parts or products.
For example, there are a limited number of different screw heads and shapes that are used for almost all purposes.
This make production and modification of products easier and more efficient.

Place

Implications of internet selling for a company in relation to its supply chain and distribution network.
Refers to the distribution of products; how the product gets to the consumer.

Online

For online sales, companies need to ensure/plan for a supply chain and distribution network.
A supply chain is a system of organizations, people, activities, information, and resources involved in transform natural resources, raw materials and components into a finished product that is delivered to the end customer.
A distribution network is the system (storage facilities, transportation systems etc.) a company uses to get products from the manufacturer to the retailer.

If the supply chain breaks time it will delay the delivery the product to the customer.
A fast and reliable distribution network is essential to a successful business because customers must be able to get products and services when they want them.

Retailers

Products can be distributed to retailers, such as small shops and warehouses.
This reduces the need for a strong supply chain as products are often delivered periodically in large batches.

Wholesalers

Wholesalers buy products in bulk and then distribute them to retailers.
This reduces revenue due to having to pay wholesalers but means a distribution network is not needed, which can help save costs.

Price

An extremely important aspect of marketing a product is setting the correct price that will attract consumers to make a purchase while generating profit.
Without getting the balance right, a company can quickly find that they are losing money through lack of sales or through lack of profit generation.

Strategies of setting price are cost-plus, demand pricing, competitor-based pricing, product line pricing, psychological pricing.

Cost-plus pricing is the sum of desired profit and total cost for a product.
Here the firm add a percentage to costs as profit margin to come to their final pricing decisions.

Competition-based pricing sets a price based on the prices set by competitor selling similar products in the same market.
A firm has three options: lower the price, price the same or price higher.

Demand pricing adjusts price based on the demand for the product.
A pricing strategy where a company will set the price based on the demand for the product.
Initially the price may be high to maximize profits.
If demand decreases then the price will be lower to diffuse into the wider market.

Psychological pricing sets prices that are appealing to consumers, usually taking advantage of psychological fallacies.
The seller here will consider the psychology of price and the positioning of price within the marketplace.
Where a product is priced to give the impression that it priced beneficially.
Limited time discounts or setting the price of $99.99 instead of $100 are common examples of psychological pricing.

Product line pricing sets prices to fit in with a product line. For example, an economy car version, a normal version, and a premium version of a product with prices increasing in order.
Pricing different products within the same product range at different price points.

Promotion

When selling a product, promotion is another key aspect.
Depending on the nature of a product and its position within the product life cycle, the forms of promotion can be different.

Advertising

We are bombarded with adverts everyday: TV, radio, Magazines, billboards, outdoor advertising etc.
Companies need to make their advert stand out from the crowd. What is said is just as important as how it is said.
Advertising techniques include:

Celebrity endorsements

Guarantees (money back)

Scientific claims

Sex appeal

Publicity

These are done to raise awareness and get some sort of (free) publicity.
Can take many forms:

Publicity Stunts

Charity events

Launch parties

Press conferences

Personal Selling

For example door-to-door salesmen, Tupperware house parties etc.
Often used for :

Products that vary from one customer to another

Products whose prices vary depending on requirements

Expensive products

Services such as insurance

Trigger and Incremental Products

Trigger Products

Trigger products are pioneering products that lead to the creation of incremental products.
Trigger products attract consumers on their own merit for the function and performance necessary to carry out the basic tasks most consumers require.

An example of a trigger product would be mobile phones, such as the iPhone.

Incremental Products

Incremental products are products that add onto a trigger product and improve its functionality and use.
Available to engage consumers in purchasing add-ons.
These high margin add-on purchases are rarely considered by customers when making the initial purchase decisions.

For example phone chargers, phone stands, screen protectors, etc. would be incremental products for the iPhone.