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Cases of Marketing Mixes

marketing, market, product, promotion, place, price, marketing mix, selling success

Philip Kotler defines the marketing mix as “the set of controllable tactical marketing tools – product, price, place, and promotion – that the firm blends to produce the response it wants in the target market. How the marketing mix works in reality can be illustrated by the following three examples that emerges from differing situations. They are ‘typical’ cases, but it must be remembered that within the categories referred to there will still be considerable individual differences. One company may spend less on its sales force and more on advertising than another one will.

Fast moving Consumer Packaged Goods

The typical fast moving consumer food products fall into this category. There is a mass market that can be economically reached through advertising, which therefore plays a big part in the marketing mix. Price may be very critical, since many retail outlets are use. The sales force may be very large (although in some cases the fact that a very high proportion of customers can be served through a few large supermarket chains may change this picture). The product is likely to have a low unit price and ‘impulse’ buying may play an important part, so that packaging and point – of – sale activity are important. Advertising budgets are commonly about 10 per cent of retail turnover and sales force costs about 5 per cent, but both may be even higher.

Customer Durables

Cars, washing machines, freezers and similar goods present a different picture. Impulse buying is unlikely, and frequency of purchase is much less. Price, while still important, may not be so critical, although ‘discounting’ is common as a means of competition between retailers. The ability to inspect the product may be important, and the availability of after – sales service certainly is. A smaller number of place than with fast – moving consumer goods is therefore common, but they are much more than the simple purchasing points they are with the fast – moving goods. Advertising and sales respectively, but retailers margins will be higher. Retailers themselves employ large numbers of sales staff and spend their own advertising money.

Industrial Capital Goods

Heavy capital equipment for industry is likely to be supplied to order rather than from stock. Product of the product is all – important and price may well be a secondary consideration. There are probably a small number of customers and therefore a small (though highly trained and specialized) sales force. Because of the specialist role and the lengthy selling process, sales costs can be high. Advertising is likely to play a very minor role (advertising costs may be 0.5 per cent or less, but sales costs may vary from 2 per cent to 10 per cent, although there is really no norm).distribution is almost certain to be direct to customer, while installation and after-sales services may call for a large engineering division quite apart from manufacturing. Similarly, research and development, design department, and such commitments will be high.

Financial Services

Until fairly recently financial organizations such as banks and building societies relied heavily on people seeking them out and then being sufficiently satisfied with their services not to move their business elsewhere. During the 1960s and 1970s the market developed rapidly and competition was on the basis of wider and wider network of branches supported by increasing promotion expenditures. In the 1980s more attention was paid to developing different products like offering higher interest rates, 24 hour cash availability and, more recently, computerized instant access banking through data transmissions systems.

Published: 2007-04-14
Author: Martin Hahn

About the author or the publisher
Martin Hahn PhD has received his education and degrees in Europe in organizational/industrial sociology. He grew up in South-East Asia and moved to Europe to get his tertiary education and gain experience in the fields of scientific research, radio journalism, and management consulting.

After living in Europe for 12 years, he moved to South-East again and has worked for the last 12 years as a management consultant, university lecturer, corporate trainer, and international school administrator

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