Marketing Mix

1. It provides a valuable guide for resource allocation

2. It helps to allocate the responsibilities
3. It provides an opportunity to analyze cost benefit elasticity’s
4. It facilitates communication process
5. Develop strengths and avoid weaknesses
6. Strengthen the competitiveness and adaptability of enterprises
7. make the internal departments of the enterprise work closely together
 Product
A product refers to an item that satisfies the consumer's needs
or wants. Products may be tangible (goods) or intangible
(services, ideas or experiences).
Typical Marketing Decisions
Product design – features, quality
Product assortment – product range, product mix, product lines
Packaging and labeling
Services (complimentary service, after-sales service, service level)
Guarantees and warranties
Returns
Managing products through the life-cycle
 Choosing Products to Sell
Factors to Consider in Product Selection

Choosing a product for your retail store to sell may very well be the most
difficult decision you will need to make when starting a retail business.

The choices are limitless and the task may be overwhelming at first.

Not only should there be a demand for your products, but it must be
profitable and something you enjoy selling. Before you commit to a
product or product line, consider the following factors while deciding
what products to sell.
 Choosing Products to Sell
Marketability

“It won't matter what products you sell if your customers aren't buying.”

Before considering what product to sell, determine what market you want to sell to.

Once you know what kind of customer you want, then you'll be able to determine
their needs. If your products only appeal greatly to some people, it may not be
enough to sustain a business. Your product selection doesn't have to appeal to all
of the population but it should be something you can convince a large percentage of
shoppers they need.
 Choosing Products to Sell
Profit Margin

Selling big-ticket items is generally more profitable but can require more
credibility to sell. When you look at the price of the product, don't forget to
calculate direct and indirect costs (like overhead) of selling your goods. 
 Choosing Products to Sell
Consumable

Choose a product with recurring sales value. A consumable item that

needs to be replaced on a regular basis is one way a retailer can establish
long-term sales.
By establishing a customer base with recurring products, customers will
continue to come back to you to buy more as they use up the products.
Additionally, satisfied customers are more open to recommendations for
related products.
 Choosing Products to Sell
What's Popular

When it comes to selecting products to sell based on what's popular,

timing is extremely important. 
New trends and products can be a great boost to your business, but you'll
need to enter at the beginning of the product lifecycle in order to be
successful.
Learning to pick a hot product before it becomes hot is a valuable
skill that comes from knowing your market.
 Choosing Products to Sell
Competition

Competition is healthy and there are ways other than volume and price a
smaller store can compete with larger retailers.
On the other hand, the more unique the product, the less chance of
competition.
 Choosing Products to Sell
Private Label

One way to guarantee that you have a truly unique product line is to
make the item yourself.
Another way is to partner with a small business that makes a product you
would enjoy selling.
Also, consider private label products which will allow you to brand
an item made by another person.
 Choosing Products to Sell
Quality

When deciding which products to sell in your store, ask yourself the
following question. Is this product something I would give my dearest
friend? If not, you may want to keep looking. Product quality is
extremely important when your reputation is on the line.
 Choosing Products to Sell
Diversity
Keep your product offering simple in the beginning. If your product line
is narrow and focused, then your marketing efforts can be just as tightly
focused, which will bring you the best results for your marketing dollars.
As your business grows, so can your product line as long as you keep
new products compatible with the type of business, your location, and
your market.
 Price
Price refers to the amount a customer pays for a product.

Price may also refer to the sacrifice consumers are prepared to make to
acquire a product (e.g. time or effort).

Price is the only variable that has implications for revenue.

Price also includes considerations of customer perceived value.

 Price
Typical Marketing Decisions

Price strategy
Price tactics
Price-setting
Allowances – e.g. rebates for distributors
Discounts – for customers
Payment terms – credit, payment methods
 Retail prices are affected by internal and
external factors.

Internal factors that influence retail prices include the following:

Manufacturing Cost: The retail company considers both, fixed and

variable costs of manufacturing the product. The fixed costs do not vary
depending upon the production volume. For example, property tax. The
variable costs include varying costs of raw material and costs depending
upon the volume of production. For example, labour.
 Retail prices are affected by internal and
external factors.

Internal factors that influence retail prices include the following:

The Predetermined Objectives: The objective of the retail company

varies with time and market situations. If the objective is to increase
return on investment, then the company may charge a higher price. If the
objective is to increase market share, then it may charge a lower price.
 Retail prices are affected by internal and
external factors.

Internal factors that influence retail prices include the following:

Image of the Firm: The retail company may consider its own image in
the market. For example, companies with large goodwill such as Procter
& Gamble can demand a higher price for their products.
 Retail prices are affected by internal and
external factors.

Internal factors that influence retail prices include the following:

Product Status: The stage at which the product is in its product life
cycle determines its price. At the time of introducing the product in the
market, the company may charge a lower price for it to attract new
customers. When the product is accepted and established in the market,
the company increases the price.
 Retail prices are affected by internal and
external factors.

Internal factors that influence retail prices include the following:

Promotional Activity: If the company is spending high cost on

advertising and sales promotion, then it keeps product price high in order
to recover the cost of investments.
 Retail prices are affected by internal and
external factors.

External prices that influence retail prices include the following:

Competition: In the case of high competition, the prices may be set low
to face the competition effectively, and if there is less competition, the
prices may be kept high.
 Retail prices are affected by internal and
external factors.

External prices that influence retail prices include the following:

Buying Power of Consumers: The sensitivity of the customer towards

price variation and purchasing power of the customer contribute to the
setting price.
 Retail prices are affected by internal and
external factors.

External prices that influence retail prices include the following:

Government Policies: Government rules and regulation about

manufacturing and announcement of administered prices can increase
the price of the product.
 Retail prices are affected by internal and
external factors.

External prices that influence retail prices include the following:

Market Conditions: If the market is under recession, the consumers

buying pattern changes. To modify their buying behaviour, the product
prices are set less.
 Retail prices are affected by internal and
external factors.

External prices that influence retail prices include the following:

Levels of Channels Involved: The retailer has to consider a number of

channels involved from manufacturing to retail and their expectations.
The deeper the level of channels, the higher would be the product prices.
 Pricing Strategy Vs.
Tactics
These are adopted in the short run to suit particular situations. Tactics
have only limited impact beyond short-term sales of the product itself. It
may also be that the pricing strategies a business can implement are
constrained by the competitive position of the business.
 Retail Pricing Strategy
Cost Plus Pricing Mechanism
Manufacturer Suggested Retail Price (Also called List Price or
Recommended retail price)
Competitive Pricing
Psychological Pricing
Multiple Pricing
Discount Pricing
 Cost plus pricing
mechanism
Every organization runs to earn profits and so is the retail
industry.

Cost plus pricing works on the following principle:

Cost Price of the product + Profit (Decided by the retailer) =

Final price of the merchandise.

According to cost plus pricing strategy the retailer adds some

extra amount to the actual cost price of the product to earn his
share of profits. The final price of the merchandise includes the
profit as decided by the retailer.
 Cost plus pricing
mechanism
Cost-plus pricing is often used by retail companies (e.g.,
clothing, grocery, and department stores). In these cases,
there is variation in the items being sold, and different
markup percentages can be applied to each product.
 Cost plus pricing
mechanism
Cost Plus Pricing
• Cost plus pricing strategy takes into account the profit of the retailer.
• Cost plus pricing is an easy way to calculate the price of the
merchandise.
• The increase in the retailer price of the merchandise is directly
proportional to the increase in the cost price.
• The customers however do not have a say in cost plus pricing.
Manufacturer Suggested Retail
Price (Also called List Price or
Recommended retail price)
According to manufacturer suggested retail pricing strategy the retailer
sets the final price of the merchandise as suggested by the manufacturer.
 Competitive Pricing
The cut throat competition in the current retail scenario has prompted the
retailers to guarantee excellent customer service to the buyers for them
to prefer them over their competitors.

• The price of the merchandise is more or less similar to the

competitor’s but the retailers add on certain attractive benefits for the
customers. (Longer payment term, gifts etc.)
• The retailers ensure that the customers leave their store with a smile
to have an edge over the competitors.
• He tries his level best to offer better services to the customers for a
better business in future.
 Competitive Pricing
Pricing Below Competition
According to pricing below competition policy

• The price of the merchandise is kept lesser than what is being offered
by the competitors.
 Competitive Pricing
Prestige Pricing (Pricing above competition)
According to prestige pricing mechanism, the price of the merchandise is set slightly above
the competitors.

The retailer can charge higher price than the competitors only under the following
circumstances:

• Exclusive Brands at the store.

• Brand image of the store
• Prime location of the retail store
• Excellent customer service
• Merchandise not available at any other store
• Latest Trends
 Psychological Pricing
Certain price of a product at which the consumer willingly purchases it is
called psychological price.
The consumer perceives such prices to be correct.
• A retailer sets a psychological price which he feels would meet the
expectations of the buyers and they would easily buy the
merchandise.
 Multiple Pricing
• According to multiple pricing, the retailer sells multiple products
(more than one) for a single price.
• The retailers combine few products to be sold for a single fixed price.
• 3 Shirts for $100/- or 3 Perfumes for $20/- and so on.
 Discount Pricing
• According to discount pricing, the retailer sells his merchandise at a
discounted price during off seasons or to clear out his stock.
 Place
Refers to providing customer access
Considers providing convenience for consumer.

Typical Marketing Decisions

Strategies such as intensive distribution,
selective distribution, exclusive distribution
Franchising;
Market coverage
Channel member selection and channel member
relationships
Location decisions
Inventory
Transport, warehousing and logistics
 Place
The availability of the product
should be close to the place of
consumption so that the prospects
and the customers can buy it easily. 

Retailer has to make sure the

availability of the product so that
the customers can buy it whenever
they require — the major
components of place, in the retail
marketing mix:
Physical distribution and marketi
ng channels.
 Place
Distribution

Distribution is defined as the act of

spreading the product throughout the
market, as large and wide as possible
so that many people can buy it.

A company needs distribution so that

it can sell its products in the market.
A proper Distribution channel can
become a huge competitive
advantage for the company.
 Place

The sharing of a product or service

amongst several recipients is understood as
Distribution.
With the help of a distribution channel, a
manufacturer or creator enables its products
to reach the end-users.
 Place
There are two kinds of distribution channels
that are functional – Direct Distribution and
Indirect Distribution.
In direct Distribution, the manufacturer sells
products directly to the end-users while in in-
direct Distribution, products reach the users
through different hands such as wholesaler,
distributor, dealer, retailer, consultant,
representative of manufacturer and catalog.
 Place
When a company has an active distribution
channel, there are higher chances of the
company selling more products than its
competitors. It is because when a company
has an extensive distribution network, the
products are sold in more platforms and at
a cheaper cost.
 Place
Components of Distribution
• There must be geographical diversity while setting up your distribution
channel so that the product has a broad reach.
• An effective tracking system must be in place, especially if the company is
involved in e-commerce so that the company can check if the goods have been
delivered in the right place with the correct specifications.
• The packaging of the product must be done well so that there is no damage to
the goods while transporting and storage.
• Distribution involves tracking of places so that the placement can be done in
such a manner that includes maximum profits.
• If the product faces a slump in the market, the distribution channel must also
allow taking back products from the market.
 Place
Different Approaches to Distribution

1) Mass distribution approach (also known as an

intensive distribution)
For mass-market Distribution, businesses opt for those
intermediaries who can cover the whole market base. You
may understand this with the examples of cold drinks that
are distributed by using a different variety of outlets such
as vending machines, supermarkets, shopping stores, and
so on.

Here those distribution channels come in play that can

serve the purpose of mass-market Distribution affordably.
 Place
Different Approaches to Distribution

2) Selective distribution approach

There are some of the specific kinds of products
that need special handling and for this, selective
distribution approach is followed. For instance, if
you talk about some of the electronic goods, they
must be handled by expert hands, and for them,
businesses opt for their trained employees to take
part in the Distribution.

Some of the top cosmetic brands also opt for this

kind of distribution approach such as Jurlique,
Estee Lauder, Clinique, etc.
 Place
Different Approaches to Distribution

3) Exclusive distribution approach

In this kind of distribution approach, a business or manufacturer
would prefer to deal with one specific type of intermediary. For
having better control in the distribution process, this kind of
distribution approach is considered quite useful.

In an exclusive distribution approach, the distributor would be

working quite closely with the manufacturer by offering a more
personalized service. The distributor is responsible for paying
heed upon specific requirements and instructions of the
manufacturer.
 Place
Marketing Channels

Marketing Channels can be defined as

the set of people, activities, and the
intermediary organizations that play
a crucial role in transferring
the ownership of the goods from the
point of production or manufacturing
to the point of consumption. 

Basically, they are the various

channels or platforms through which
the products reach to the consumers or
the end-users. They are also known as
the distribution channels. 
Place
 Place
4 types of Marketing Channels :

1) Manufacturer to Consumer

This is one of the most simple and effortless

types of the Marketing Channels as the goods
produced reach to the consumers directly
from the house of manufacturer. It works as
cost-effective and profitable for both the
parties involved as there is no further
involvement of the middlemen such as
retailer, wholesalers, and agents that charge
their commission increasing the overall price
of the products.
 Place
4 types of Marketing Channels :

1) Manufacturer to Consumer

Example of this marketing channel : There

are many bakeries and handmade chocolatier
brands that directly sell their confections to
their customers through their shop, eating
joint, or home delivery through the orders
placed on the website or social media handles
of the bakery owners or chocolatiers.
 Place
4 types of Marketing Channels :

2) Manufacturer to Retailer to Consumer

This type of Marketing Channels is one of the
highly adopted and preferred channels in the
industry. The manufacturers who specialize in
the manufacturing of the shopping goods
such as shoes, furniture, and fashion apparels
amongst others opt for this Marketing
Channel.
 Place
4 types of Marketing Channels :

2) Manufacturer to Retailer to
Consumer
Example of this marketing channel : The
various items of furniture from the
manufacturers of China that are displayed
and sold through the local retailers are
marketed and distributed through the
above-mentioned channel. They procure
the furniture items directly from the
manufacturers in China and sell it to the
local market adding their profit margins
attaching the brand name of imported
furniture.
 Place
4 types of Marketing Channels :

2) Manufacturer to Retailer to
Consumer
The same case applies for the fashion
apparels having the name attached of
imported items from the countries such
as Bangkok, Hong Kong, and Korea.
The retail boutique owners regularly
visit the manufacturers in these
countries to purchase the items and
then come and sell to their local target
market.
 Place
4 types of Marketing Channels :

3) Manufacturer to Wholesaler to
Consumer
This category of Marketing Channel is
usually adopted by the consumers who are
looking out for bulk purchases of the specific
items and procuring the same from the
wholesaler works out quite easy and cost
effective for them owing to the economies of
scale factor plus no involvement of other
intermediaries. The wholesaler reduces the
cost to the consumer such as service cost or
sales force cost making the items available to
the consumer at cheaper rates.
 Place
4 types of Marketing Channels :

Example of this marketing channel :

Shopping from the factory outlets of the
brand or warehouse clubs where the
consumer has to sign for the membership
with the wholesaler in order to buy the
products at cheaper rates.
 Place
4) Manufacturer to Agent to Wholesaler to
Retailer to Consumer

This type of Marketing Channel involves

more than one middlemen or intermediary
making the goods reach to the consumers.
The agents or the middlemen helps and
assists with the sale of the goods and charge
their commission from the manufacturer.
They are quite helpful when the goods need
to reach the consumers in a short span of
time.
 Place
Importance of Marketing Channels
1) Information provider
The first and foremost aspect in the list of the
importance of the Marketing Channels is that the
middlemen such as agents provide the vital and
crucial market information to the manufacturer
that helps him to plan his production and other
related business strategies
accordingly. Developments in the market such as
the change in the preferences in the taste of the
consumer, entry of new manufactures in the
market, shift in the government policies, and the
various pricing points of the other manufacturers
are given to the manufacturer without any
additional cost owing to their relationship and
working association with the manufacturer.
 Place
2) Stability of the price
Yet another important function that is
performed by the middlemen is that they
maintain the stability of price by absorbing
the increment along with keeping the
overheads cost low and charge the consumers
with the old price of the products. Their main
motive behind this strategy is to have a strong
foothold in the market due to the completion
from the other middlemen in the market.
 Place
3) Promotion
Another aspect in the importance of
Marketing Channels is that the middlemen
perform the function of promoting the goods
of the manufacturer by planning and
designing their own sales incentive and
customer loyalty programs to attain
their sales targets and increased market
share objectives. This ultimately works for
the benefit of the manufacturer and all the
parties involved in the process.
 Place
4) Pricing strategy
As the middlemen and the agents are at the
sales field on a daily basis and have a
thorough knowledge about the marketing
dynamics and the customer preferences,
many manufacturers ask for their suggestion
whilst deciding on the pricing of the various
products. The pricing and the features of the
products are also customized for the different
set of target markets and consumers along
with the channel of distribution.
 Place
5) Matching the demand and supply of the
products
The main and significant function of the
middlemen and commission agents in the
Marketing Channels is to match the demand
and supply of the products in the target
market. They should provide the
manufacturers with the crucial information on
how to assemble the goods to match the taste
and preferences of the targeted consumers
that result in the ease of sales and attainment
of the sales objectives of the manufacturer.
Place
 Promotion
Promotion refers to marketing communications
May comprise elements such as: advertising, PR, direct marketing and sales
promotion.

Typical Marketing Decisions

Promotional mix - appropriate balance of advertising, PR, direct marketing

and sales promotion
Message strategy - what is to be communicated
Channel/ media strategy - how to reach the target audience
Message Frequency - how often to communicate
Promotional Mix
Promotional Mix
Promotional Mix
Promotional Mix
Promotional Mix
Promotional Mix