The marketing mix provides us with a useful way of looking at the marketing of products. Businesses will need to create a successful mix including the right product or service, to sell it in the right place, at the right price and using the most suitable form of promotion. All successful businesses follow the four P’s format and Converse is a good example of a company that successfully uses this marketing strategy.We already know that the simple mix is often referred to as the four P’s of product, promotion, price and place.
This is a very easy way of looking at what has become a very difficult business environment and has at times been felt too simplistic and restrictive in terms of the real mix and what should be the fullness of our understanding. In recent times, therefore, it has been expanded to include three more P’s with the additional elements of people, provision of customer service and process management.PeoplePeople have been known as the greatest advantage of a modern business. The main thing is that everybody who works for my business is a customer, either the internal or external customers. Both sets of customers expect to be supplied with the service they need if it’s on time or specified. This principle holds well for everyone in the company, whatever their level of skill and experience, whether what they do is answer a telephone or mastermind a key new project.
It works to everyone’s benefit. In doing so it provides the individual with genuine responsibility and scope for initiative and it guarantees that my businesses performance will be much betterProvision of customer serviceThe Customer service has become very important in a swiftly changing market place. It has been linked more with the centre product. Customer service is connected with developing a bond with my customers in order to create long-term relationships that lead to advantages for all groups.
It does not just happen. It is a process which involves pre transaction, transaction and post transaction considerations. importance upon customer service will change from one product to another.Process managementThis will involve all of the procedures, tasks, mechanisms and activities through which my service will be given to the customers. In my business the processes are a key part of the marketing mix, concerning on initial priorities and ways of meeting customer need.
A process involves key decisions about the customer involvement and employee judgment. In today’s quickly changing business environment, in order to meet consumer needs more closely, it is marketing that should determine the processes that link manufacturing with the customer. The marketing mix is therefore a series of controllable variables that I can use in order to best meet the customer needs and ensure that an organisation is successful in the markets in which it serves.The four P’sPrice:* Allowances and deals* Distribution and retailer mark-upsProduct:* Packaging* Brands* Service* QualityPromotion:* Advertising* Sales promotion* Personal selling* PublicityPlace:* Channels of distribution* Outlet location* Sales territories* Warehousing systemPricePrice will be the only element of the marketing mix that will directly generate me income, other elements of the marketing mix are costs. The importance of price in the marketing mix varies.
In the fashion markets, such as clothing and shoes, the one I am going to try break into, it is not that important. My service will be designed to suit a particular segment while others perform a precise purpose regardless of price. For consumers with limited budgets, price is a key purchasing criterion, while for those whom money is no object is less important. This is good for me because I have a big budget available at which is not at a precise figure.
My first pricing task is to create an overall pricing goal for my business which is in line with my marketing strategy, and then determine objectives for each of the product lines. The price charged for a service/product is associated with a given level of sales.A good way to express customer sensitivity to price changes is through a measure known as price elasticity of demand. This is the measure of how much quantities purchased will alter in response to given price changes. Demand is said to be elastic if the change in quantity demanded is of a greater proportion than the change in price that initiated it.If the price of a converse trainer fell by 10% and there was an increase in sales of 20% the demand for the product would be said to be elastic, the changes in price led to more than proportionate response in quantity demanded.When a relative change in the quantity sold is less than the relative change in price, demand is said to be inelastic. For example if a price increase of 10 percent results in a 5 percent fall in sales price elasticity will be -0.
5. Price elasticities vary with the level of competition. The more competition in the market, the more likely it is that the demand for a product/service will be elastic.
Price elasticity also varies during the product life-cycle. In the early days, when there is little competition, price inelasticity will be the rule within a sensible price range. However as products mature elasticity will increase in the competitive price range.target profit or return on capital employed, prices fair to firm and customers, prices similar to those of competitors, stable prices,Penetration pricingPenetration pricing is appropriate when the seller knows that demand is likely to be elastic.
A low price is therefore required to attract consumers to the product. Penetration pricing is normally associated with the launch of a new product/service for which the market needs to be penetrated. Because the price will start low the product/service will initially make a small loss until the consumer awareness is increased.
I think I should start my prices at very low price and then when it is going well I should raise my pricesCost plus pricingInformation about cost is usually easier to put together than information about other variables such as likely revenue. I am going to will add a margin to the unit cost. The unit cost is the average cost of each item produced.
For example if a business produces a total cost of $24,000, the unit cost will be $30. Talk to many owners of small businesses and they will simply mark up each item sold by a certain percentage. Shoes like the ones I am doing will usually be marked up by 100 to 200%..For large businesses unit costs will fall rapidly at first as the overheads are spread over a larger output. It is therefore a relatively simple calculation to add a fixed margin to the unit cost. A business is able to produce a price which will be 20% higher than the unit cost of production.
Whilst cost plus pricing is very popular there are many dangers associated with it. If the price is set way to high, sales may fall short of expectations and if the price is too low then potential revenue could be sacrificed. There is a strong link between value and price.
Delivery of value is an important ingredient of an exchange. If the seller does not provide customers with a significant value proposition then the goods may be returned or customers will not come back.Competition based pricingThe nature and extent of competition is frequently an important influence upon the price. If my service is faced with direct competition then it will compete with other similar services in the market place. This will constrain my pricing decisions so that the price setting will need to be kept closely in line with rivals actions. When a product is faced by an indirect competition there will be more scope to vary the price. This will open the possibility for a lot of strategies. I will choose a high price strategy to give a product a quality feel but I could also charge a low price so that consumers see the product as a bargain.
My business will seek to reduce competition and make my service better than my rivals, the development of monopolistic powers enables them to push up prices and make larger profits. The level of competition is therefore a key determinant of price. Where there are a lot of competitors it is a bit stupid to charge a price over the market priceProductThe product/service is the most important element of the marketing mix. The product/service is the business itself.
Customers as a rule do not buy features, they buy what features can do for them, the problems they solve, the money and time they save and more. A product would be a bundle of benefits. A key part of marketing is to make sure that products create the benefits that a consumer desires in a particular product and that the product is offering more than one of the competitors. When we understand the benefits the customers are looking for in a product, we are best placed to know where we they will buy it and so focus our market accordingly.
In buying trainers the benefits that customers may be looking for include:* Appealing brand name and confidence in the brand* Price value for money* Product appearance* Product performance* Unique pair of trainersKnowing what the customer requires from my questionnaire it enables the business to focus its efforts on creating products that will produce one or more of them, and then promotion can be used to highlight the businesses ability to create these benefits.Generic dimensionsThe key benefit of my particular service is how good and unique the customers trainers look. That is what I am basically trying to do make the my target group 14-35 look cool, trendy and unique.
Sensual dimensionsThe sensual dimensions have an impact upon the senses. Which include the design, the colour and the texture. This is very important for me because I need to have a lot of different designs to make my customers feel unique.Designs- I will have loads of designs which I am going to put on peoples trainers if they want it from peoples names to different kinds of animals like dragons and tigers. We will also be doing different designs in graffiti which I believe will be a must have for the younger generation.Colour – I will use any colour that the customer asks me for.
But my recent evaluation from my questionnaire shows that the customers tend to go with three main colours blue, black and red.Texture – The texture will obviously change with the material they ask me to put on their trainer. I can put for them a leather outside for the converse trainer which will feel smooth, or denim that could match and feel like your jeans and many more materials.Extended DimensionsThese are additional benefits that we include.
There will be credit card facilities, maintenance contracts, guarantees, servicing agreements and many moreDepthThis is the number of variants of each brand. For example the amount of different sizes or models within a product line. I have a lot of different designs, colours and materials I can use. If I deepen the product/service would mean adding more lines within my existing range which would be very difficult on my budget.LengthThis will be the amount of items I have to offer. In my service this will be a good thing because then there are a lot more designs or colours that they can use to make their trainer look and feel unique. I have a huge range of different colours, designs and materials to customise the trainer including lots of different spray paints.
ConsistencyThis is the closeness of relationship between each product line. To create the best product/service I will need to mix means having the right balance in terms of depth, length and consistency.It is very important to have the right service and I believe I do have it because of the wide range of different colours, materials and designs on show to make the customers look unique.I also do believe that the product I have chosen to customise on converse all star trainers are the correct ones to use because they are easy to customise and probably one of the biggest trainers in fashion at the moment.
PlaceThe place element within the marketing mix is probably the most underestimated element. It provides the basic structure for the customer needs to be satisfied. Physical distribution management is an important part of the place process. It will help my business to meet customer needs profitably and efficientlyA good product makes its marketing by itself because it gives benefits to the customer. We can expect that you have right now a clear idea about the benefits your product can offer.
It will enable my manufacturers and distributors to provide goods for customers at the right time, place and in the condition required. Physical distribution must balance the need for customer service against the need to minimise cost. To maximise customer service I may need a lot of warehouse and stock space, the efficient staffs and rapid transport mechanisms. To minimise my costs I will need to lower my stock levels, I need to limit my storage space, have fewer staff and slower the transport.Having a physical distribution system involves me trading off costs against service like inputs against outputs. My inputs will include the distribution costs like freight costs, inventory costs and warehousing costs.The physical distribution system which I am going to select has to depend on how big my businesses market is and how big my business is.If I want to maximise my customer service then I will have the biggest inventory costs because I will have to be able to hold stock.
I will have to think about where and how much I will need to order. Another big decision to make is where I will put my warehouses, I have decided that it should be near the country side because then the Lorries can get in and out of the warehouses with no problem because there aren’t a lot of cars about or traffic. They should also be near a port and an airport so when my products are flown here or shipped here it will be easy to get them. I will also need to take into mind the load size. Should I take the whole thing at once or break them down for smaller units for delivery???. I probably think the best thing to do is to take it all at once because then delivery will be much faster and so easier.
It is important for me to develop a very good and efficient information processing and involving system which will help with communications. This will help me to communicate better with my manufacturers.I am going to use telemarketing to sell some of my designs on trainers. Also now there are satellite TV channels it has prompted the introduction of home shopping where you can buy products at drop down prices, I think this would also be a good place to sell my designs on trainers because It would be promoting the business to. I will also need to get a physical shop to sell my service but finding a place will depend on ownership, range of merchandise, pricing policy, location and size.I believe that the best place to sell my product will be in central London this is because this is where the capital is the heart of the fashion scene in England and the biggest teenage, young and trendy population is in London to.There are many different ways I can use to meet the customer needs through different forms of distribution.
The ones I am going to concentrate on are catalogue shopping and home shopping.Catalogue shopping- I am going to design a catalogue listing of all of the designs, materials and textures on offer in my store. The Argos catalogue has been a success over the years. This could also work for me if a lot of people pick up the catalogue and word gets round that my designs are great.Home Shopping- Interactive television, the internet and television shopping channel have a massive potential sell my products. People no longer need to leave their homes to buy a Christmas present they can just go on to a shopping channel and buy it from thereI think the next thing that I should be focusing on doing is to make a website, this will help us increase our sales in the long run and will also promote our company.PromotionPromotion includes all the techniques that an organisation uses to communicate with the other organisations and individuals. The businesses are the senders in the communication process and the consumers are the receivers.
To raise the probability of the message getting through to our consumers we need to think a lot about our target audience. I already know what my target audience is because of the information I got when I asked people my questionnaire. My target audience will be 14-35 year olds, so the young and trendy. I will need to channel my message about my business through the most appropriate media.AdvertisingAdvertising is paid or sometimes free communication through a medium in which the sponsor is recognized and the message is controlled. Every main medium is used to deliver these messages, including: television, radio, movies, magazines, newspapers, the Internet.
Advertising campaigns may be sent through different kind of media forms like tv, radio, cinema, posters and newspapers. I will be using print media because the print media is the largest media in the UK which includes magazines and newspapers. This media will allow me to accurately target and position my customers, I can do this through the magazines because if I put my business for example in a trainer magazine or a fashion magazine more people will look at it because that’s why they bought the magazine to look at fashion or shoes. The benefit of me doing print media for my business is that I can send my message across and the customers will see my messages repeatedly because the message is durable. I think it is very important for me to promote my service in the newspapers and magazines because of the major advantages.I believe that another way of promoting my service will be to use broadcast media, TV and radio. TV is the most powerful medium but it is very expensive and my message could be short lived.
With that information I don’t believe that it would be a good way to promote my service.I think a great way to advertise my service will be by using direct mail. This is personally addressed advertising which will be delivered through the post. If I do this then I can have a direct relationship with my customers.I will also be doing charitable donations and community relations. I think I should do this because I believe that it will be a good way of helping the image of my business. It will provide me with good publicity and will help me to promote my product by helping a good cause.I will also be sponsoring a children’s football tournament in Belgium.
This will be a useful way of promoting my product because over 1000 people will be at the event and if they are impressed with it they can see that it was all down to us which will help the image of our business.Sales PromotionsSales promotion is techniques which are used to persuade the customer to make a purchase.I think sales promotions are very important because the customers will immediately be drawn to me if they see that I have given them free discounts. This is also a good way to keep my existing customers happy by giving them offers.
These are some of the sales promotions which I am going to use:* Promotional giftsI am going to use promotional gifts for example like watches or diaries which are cheap but look expensive. If I give my customer promotional gifts they might want to stay on with my business because they might want more or people might be able to see that I am giving free gifts which might attract new customers.* Special offersThese are very popular with consumers because in our modern day life everyone is always looking for the best bargains around. I think I should do this because this will attract a lot of new customers to my business.BrandingA brand is a particular product or characteristic that identifies a particular producer because my brand is well known people will see it and think the service must be good because it is converse.
I will need to show the customers that I am working with converse because if they see this they will be impressed because they know the brand and so will probably be one of my customers.PackagingPackaging is the science, art, and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of design, evaluation, and production of packages. Package labelling is any written, electronic, or graphic communications on the packaging or on a separate but associated label.I will also design the boxes that I put the converse trainers in. This will show them that we try to show quality wherever and whatever it is. I will also do this on our bags and put designs of customised trainers because people might see someone with one of our bags and if they like what they see they ask what shop they went to this could attract us a lot of customers.
EvaluationI believe that I need to advertise my service much more than I have. I think that a very good way to do this is to make a website. A good website will attract customers not just locally but also globally. A lot of people will see my business on the internet and if they like it can make purchases online. I think this will help me sell much more stock and so will increase my profits.
People nowadays stay at home to make purchases mainly from the internet.I think that I did the right thing to try and focus my advertising in the print media. This is the biggest media of them all and if I do put my service in fashion magazines then I can make a lot of new customers. A lot of people are able to see these magazines and hopefully some of them will be interested in my serviceI also think that I should have used a merchandising strategy because it will grab the attention of the consumers.
Merchandising can help my business to keep the consumer’s attention and shop in their stores. Merchandising is increasingly important in promoting my service because it is intended to grab the customer’s attention which will attract them to my service.I think that my current marketing strategy for my service is very good. I believe that I should target my service to the younger generation 14-25 because I believe that its definitely the right age group.
I also believe that I should definitely try to hire some celebrities to wear some converse trainers designed by my business to attract new customers.There are a few issues in competitors analysis my business might need to address in order to improve my businesses performance and regain their image as a very good business. I believe that I need to make a big decision about who my target group are.I know that my main customers are the 14-35 year olds but recently I have seen a lot more people over the age of 35 wearing converse trainers.If my business decides to follow the move towards trying to get more customers over the age of 35 I will need to see exactly what they want and so I will do another questionnaire asking questions about if they are really interested in it and what they are interested in. If they are interested in converse trainers I will bring out a new range of designs which they might want.
.I will also need to see who my competitors are round the location I am going to have my customising shop. To beat my competitors I will also do something completely different have a cafï¿½ section next to the shop so people can buy a quick snack and drink when their trainer is getting customised so they don’t get bored.
I think this will attract a lot of new customers and will make the other customers come back because they know that they won’t be bored while waiting for their trainer to be customised.I also think that I should have a lot more designs on offer that I can put on my trainers to look good.I also believe that I should definitely have my shop near central London, even though there will be a lot of competitors for me there because that is where the most amount of my competitors will be. There is a huge advantage because a lot of consumers will be down there because London has the biggest population in England. I think that there is a lot of the younger generation that go and buy their clothes and trainers from there.AnalysisPopulation TrendsI will have to sell my products where a lot of young people hang out because they are my target market.
GovernmentThe government can interfere if the workers of my company are not treated equally such as not being in terms of the legislation of National Minimum Wage Act. The National Minimum Wage is a legal right which covers almost all workers in the UK. It became a law on 1 April 1999 to prevent unduly low pay and also to help create a level playing field for all employers.
The number of hours for which you have to pay your workers the minimum wage is calculated differently according to the types of work they do.World AffairsI will need to see if it will affect wars and the world affairs at the moment.Legislation ; RegulationThere are two main laws that can affect the consumers and the business, they are the consumer protection act 1987 and the trade description act 1968.The Consumer Protection Act 1987 makes it a criminal offence to sell harmful or defective goods. This act creates strict liability for damage or injury caused by defective products. A defective product is one where the safety of it that people are generally entitled to expect.
Under the current law it is not necessary to prove negligence and the Act is another remedy for justice in addition to actions for negligence. The Act covers almost all goods and components or raw materials and legal action can be taken against the producer of the product which includes the manufacturer, abstracter.The Trade Descriptions Act 1968 is an Act of the Parliament of the United Kingdom which prevents manufacturers, retailers or service industry providers from misleading consumers as to what they are spending their money on.CompetitionI think that the biggest external factor of affecting a business is competition. This is because if there is heavy opposition against your company, obviously the company that has been running the longest would already have gained most of the market share and this could mean closure of your company before it has even taken off due to the fact that you cannot compete with your rival and barely any chance of reaching the break-even target. TConsumersThe eternal aim of your company is to provide a service to the customers, if this is not done then the customers will take their business opportunities elsewhere such as a rival or an online company.
The company faces losses if the customer base slowly decreases and virtually left with none and be forced to close the business and if you have debts you might get a call from the bailiffs and if nothing is handed over you could possible get a criminal record on your name.