bsbmkg502b

BSBMKG502BESTABLISH AND ADJUST THE MARKETING MIX

OBJECTIVES

• Know how to evaluate each component of the marketing mix

• Learn how to determine marketing mix for specific markets

• Understand how to monitor and adjust marketing mix

• Gain the essential skills and knowledge required for this unit

EVALUATE EACH COMPONENT OF THE MARKETING MIX

1.1 Identify key characteristics of products or services and estimate their significance to the market

WHAT ARE THE KEY CHARACTERISTICS OF YOUR PRODUCTS OR SERVICES?

• What is your unique selling proposition?

• How does your product or service stand out from your

competitors?

• Do you offer better service or are your products and services

highly price competitive?

• Do you offer better value or are you offering the most advanced

technology?


1.2 Review pricing policy and analyse pricing variables to determine their effect on demand

PRICING VARIABLES MAY INCLUDE:

• Cost of ownership

• Credit terms

• Discount percentages

• Discount structure

• Financial deals

• Leasing arrangements

• Price point chosen

• Psychological elements

• Residual value

PRICING POLICY AND ANALYSE PRICING VARIABLES

• Typically, when you are addressing your pricing strategy for

products and services, you would analyse pricing variables from

normally listed prices based on region, sales potential by location,

dates, or other marketing factors.

• The objective is to create a pricing policy or strategy to achieve

optimal balances between sales volume and income per unit

based on the product or service characteristics you addressed

earlier.

PRICING IS CENTRAL TO PROFITABLE MARKETING MANAGEMENT

These would include:

• Strategic product launches

• Targeted advertising campaigns

• Seasonal or incentive based price deals

• Additional distribution channels

PRICE AND ITS INTERACTION WITH PROMOTIONS

• A typical strategy used by organisations is to observe the manner

in which sales of products or services react to changes through a

range of promotions.

• These changes may range from minor to major depending on the

alterations made from one campaign to another.

DEMAND

• It is a commonly accepted principle in marketing that states that

there is a negative relationship between the price of products or

services and the quantity purchased.

• It is based on the generally accepted rule in economics that when

a product or service becomes more costly, fewer people will

choose it.

INFLUENCING FACTORS

• If the demand is greater than the availability your customers

would likely change attitudes and be anxious to buy products and

services.

• You, the organisation, may be unwilling to supply your products

and services at the same or increased rate due to a shortage in

quantity.

• In this situation, to either satisfy demand or to address the

shortage your customers would have to pay a higher price in order

to get the product or service they want.


1.3 Analyse promotional methods to determine their importance to marketing outcomes

IMPERSONAL PROMOTION SUCH AS:

• Advertising

• Sales promotion

PERSONAL PROMOTION SUCH AS:

• Direct marketing

• Face-to-face selling

• Personal selling

• Segmentation

MARKETING IS AN UMBRELLA TERM COVERING:

1. Market research

2. Advertising

3. Promotions

4. Public relations

5. Sales

6. Customer service

WHAT IS YOUR MOTIVATION?

• The most cost-effective method of getting your message to the

right people

• The most suitable method to suit your advertising style

• The target audience for that product or service

• The specific instructions provided by the client, customer or

department

YOUR PRODUCT OR SERVICE?

• Where is your business based?

• Who do you want to advertise to?

• Why do you want to advertise?

• Is your product or service designed for a specific market sector?

• Where is your main target audience located?

SALES PROMOTIONS

These may include:

• Coupons

• Free samples

• Contests

• Demonstrations and exhibitions

• Interest free periods

• Temporary price reductions

MARKET SEGMENTATION

• Market segmentation is a marketing technique

used to enable a business to better target its

products or services at the right customers.

• It is about identifying the specific needs and

wants of customer groups and then using those

insights into providing products and services

which meet customer needs.


1.4 Review channels of distribution and estimate their significance in relation to marketing outcomes

CHANNELS OF DISTRIBUTION MAY INCLUDE:

• Dealers

• Delivery service

• Distributors

• E-business

• Franchisees

• Internet

• Mail order

• Podcasts

• Retail


1.5 Identify and analyse level of customer service provision to determine its significance to marketing outcomes

LEVEL OF CUSTOMER SERVICE MAY INCLUDE:

• After sales service

• Call centre support

• Electronic client service

• No customer service

• One-on-one personal service

• Sales assistance for problems or queries only

IDENTIFY AND ANALYSE LEVEL OF CUSTOMER SERVICE

• An opportunity to measure how your performance compares to

that of your competitors.

• Benchmarking anything, including your customer service support

teams, requires that you collect data on it.

REVIEW CUSTOMER SATISFACTION

• Customer service satisfaction refers to how satisfied customers

are with the levels of service you are providing.

• The level of this satisfaction can be determined using several

methods, but the main objective in this method is to review the

information gathered.


1.6 Identify potential customer base and key pressure points for success

BUSINESS PROFILING WOULD LIKELY ADDRESS:• By identifying your business target market profile, its

demographics and its buying and spending habits, you will be able

to focus your marketing and advertising efforts more effectively.

• Be aware that in reviewing these profiles to describe the total

market and selected market segments you may likely identify

multiple potential markets for your product or service.

• Pinpointing the right market for you is essential in describing your

total market and then selected market segments.

CUSTOMER PROFILES

• These include demographics such as - age, income, gender,

ethnicity, education level, Psychographics (personality and

lifestyle) etc, but they may also exist within “clusters”.

• Some “clusters” are industry based which may identify interests,

lifestyles, purchasing behaviour, attitudes and more.

INDIVIDUAL CONSUMER CHARACTERISTICS

• Demographics: Age, gender, income etc.

• Psychographics: Personality and Lifestyle

• Consumer segments separated on the basis of

Demographics/Psychographics often differ in their consumer

behaviour

WHAT DO YOUR CUSTOMER PRESSURE POINTS LOOK LIKE?

• Available funding

• Influence by their senior or key decision makers

• Uncertainty? What happens after the decision to buy is made

• Uncertainty of making a bad decision

• Other external influences

• Personal restrictions

• Lack of vision


1.7 Analyse and test the effect of the components of marketing mix on each other, and establish their relative importance to customer base

MARKETING MIX MAY INCLUDE:

• Customer service variables

• Distribution variables

• Pricing variables

• Product or service variables

• Promotional variables

THE 4PS

• Product (or service)

• Place

• Price

• Promotion

LAUTERBORN'S 4CS

Another option in the marketing mix choice is the 4Cs which presents

the elements of the marketing mix from your customer’s perspective.

It refers to the needs of the customer including the:

• Customer needs and wants, which is related to products

• Cost or price points

• Convenience, which relates to place

• Communication or promotion

DETERMINE MARKETING MIX FOR SPECIFIC MARKETS

2.1 Identify and assess environmental factors for their impact on marketing mix

WHAT ARE ENVIRONMENTAL FACTORS AFFECTING THE MARKETING FUNCTION?

To further identify environmental factors, it is useful to divide

them into two categories:

• Internal environment

• External environment

THE MOST COMMON INTERNAL FACTORS AFFECTING THE MARKETING

• Senior levels of management

• The Structure of Boards

• The culture of the organisation

• The degree by which employees support management

• Amount of support given by shareholders or stakeholders in the

organisation

INTERNAL ENVIRONMENT FACTORS INCLUDE FINANCE AND ACCOUNTING

• The amounts of budget allocation to marketing

• The methods by which the revenues and costs of marketing are

perceived

• The marketing plan

• Polices

• Liquidity of the organisation

• Asset and capital structure

COMPANY IMAGE AND ACCEPTANCE IN THE MARKETPLACE

• Brand

• Acceptance and ability to say, raise finances

• Partnerships or equity positions

• Sales contracts

• Launching new products

• Marketing resources

EXTERNAL FACTORS ARE OFTEN GOVERNED BY YOUR ORGANISATION’S ABILITY TO:

• Exert sufficient bargaining power

• Address any monopoly environment situations by suppliers

• Address properly the options of substitute products

• The threat of goods or services not being available at all

COMPETITORS

• Do they share the same market?

• Do they only represent a small percentage?

• Do they have similar goods and services?

• Are they more price competitive or just discounters?

• Are they competing on product or service differentiation?

FACTORS AND FORCES

• Social and cultural factors

• Economic factors

• Political and legal external environmental forces

• Physical Forces


2.2 Identify consumer priorities, needs and preferences that affect marketing mix

CUSTOMER PRIORITIES, NEEDS AND PREFERENCES MAY INCLUDE:

• Required or preferred products/services

• Preferred price point

• Preferred purchase volume in units and in dollars

• Preferred method of payment

• Preferred time and place for responding

• Preferred time and place to take delivery

• Preferred medium to respond to direct response

offers


2.3 Consider product, pricing, promotional, distribution and service variations, and evaluate these against marketing objectives, target market characteristics and desired positioning

HAVE YOU A CURRENT MARKETING PLAN THAT YOU CAN REFERENCE?

• Marketing objectives

• Target market characteristics

• Desired positioning

• Marketing mix

MARKETING OBJECTIVES

• Do you know how your marketing objectives are going?

• Do you know how they are going to be achieved?

CONSIDER A SWOT ANALYSIS

• Identify the key opportunities and threats with pricing, promotion,

distribution and service variations within your marketing plan.

• Evaluate these against existing and future marketing objectives.

• Establish your desired positioning and importantly the areas you

want to work on.

• Remember to include a description of what success will look like,

and add some of your enthusiasm and passion here too.


2.4 Select marketing mix that best satisfies target market and meets marketing objectives

SELECTING A MARKETING MIX

• Making an informed decision involves presenting your findings as

either a business or marketing case and possibly detailing the

reasons why or why not.

• It involves considering each and every factor involved with your

previous assessments and understanding of the marketing plan.

• It also involves comparing the benefits that will be generated

through your decision and the costs that your business will incur.


2.5 Ensure marketing mix decision meets organisational, strategic and operational marketing objectives

MONITOR AND ADJUST MARKETING MIX

3.1 Monitor marketing mix against marketing performance and isolate components for testing3.2 Evaluate implications of altering one or more components of marketing mix in relation to market factors and consumer response 3.3 Adjust components of marketing mix in response to test results and evaluation of market response 3.4 Ensure adjusted marketing mix meets budgetary requirements 3.5 Ensure adjusted marketing mix continues to meet organisational, strategic and operational marketing objectives, and desired positioning

WHEN DO YOU MONITOR YOUR MARKETING MIX?

• From the outset

• After a reasonable time, e.g. months

• As a result of a financial report

• Other?

EXAMPLES

• You will need to make adjustments to your selected marketing mix

if it is perceived as being outdated or costs are escalating beyond

the budget.

• This analysis and corrective action may mean revaluating those

engaged with the marketing (both internal and external) to find

improvements or strategy correction.

• The marketing process.

CUSTOMER RESEARCH

• Research of customers’ needs and expectations to identify any

opportunities for change

• Make informed assessments for possible changes in your market

• Do you need to look at new opportunities?

• Should you and the marketing team further develop current or

new strategies?

CONGRATULATIONS!

You have now finished the unit…

BSBMKG502B

‘Establish and adjust the marketing mix’

bsbmkg502b

Marketing

sales service

better service

service characteristics

customer service supportteams

sales of products

component of themarketing

marketing factors

price of products orservices