Analyse Additional Elements of the Extended Marketing Mix
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 2733 words||✅ Published: 13th Jul 2017|
This essay looks at the main elements of both the original and the extended marketing mix. This includes an introduction to the concept of the product life cycle, new product development, pricing strategies, distribution options and the promotion mix. Finally, the essay develops marketing mixes for Coca Cola to meet the needs of different target groups.
Explain how products are developed to sustain competitive advantage.
“Sustainable competitive advantage is the focal point of a corporate strategy” (E-Course, 2013). It allows the preservation and improvement of an organisational competitive position in the market. It is an advantage that allows business to stay alive against its competition. “A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices” (Teacher Republic, 2013). See Coca Cola Company’s competitors and positioning in (Appendix1)
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See Porter’s competitive advantage and cost advantage in (Appendix 2). When a company brings a new product into a market they must think about who is the product aimed at, what advantage will customers expect, how does the company plan to position the product inside the market and what benefit will the product proffer over their competitors. According to Kotler product have three levels, core product, actual Product and augmented product, see Coca Cola product levels in (Appendix 3)
Product life cycle is “the course of a product’s sales and profiles over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity and decline” (Kotler, et al, 2005). When companies introduce new product, it takes some time to be extensively accepted, at which point its sales and incomes will begin to rise. This will attract other competitors into the market, cause the market to mature. Finally, the market will decline as companies start to introduce the next product, and customers switch to that product. See Coca Cola product life cycle in (Appendix 4)
Coca Cola Company provides different type soft drinks like Coke Zero, Diet Coke, Fanta etc. There good image makes the organisation more strong. Coca Cola is providing good taste, quality products with qualified staff, good atmosphere and hygienic environment. They are specialised in soft and fizzy drinks. Coca Cola have created good image in customers mind, their image is reputable and reliable, and it has one of the most well-liked soft drinks available. They have well-known which is why customers feel comfortable in buying Coca Cola products. Coca Cola can market too many different segments. Coca Cola can market their product to teenagers much easier than older people, because teenagers are their target market. See Coca Cola’s mission statement in (Appendix 5).
Explain how distribution is arranged to provide customer convenience.
Distribution in marketing acts importantly to attract customer’s convenience and organisations use method of distribution to see their ability. Two types of channel of distribution methods are available. “Indirect distribution involves distributing product by the use of an intermediary. Direct distribution involves distributing direct from a manufacturer to the consumer” (Kotler, et al, 2005).
Distribution is underneath the group of place, therefore organisations create a precise distribution method so that it’s readily available to the customers and it can improve possible sales for an organisation. See Coca Cola distribution channels in (Appendix 6).
The Coca Cola Company sell its products with bottling and canning operations. The distributors get to the Coca Cola to the wholesalers and the wholesalers’ get it to retailers and at final the customers buy Coca Cola from retailer shop. If Coca Cola does not work on its distribution services then their bottles are just reachable at their factories then customers may not be keen to get them. It’s more appropriate for the customer to buy Coca Cola from a close seller as compared to getting it from factory. Therefore distribution system of an organisation can be both its weakness and strength. Companies should know that their products are available at retailer shops and stores where customers can easily buy it.
Explain how prices are set to reflect an organisation’s objectives and market conditions.
One of the parts in the marketing mix is pricing. This part of the 4P’s are the one making returns and which is also why it is important that an organisation chooses the right price. Pricing is one of the most significant parts of the Coca Cola Company marketing mix, which makes revenue for them. Coca Cola use different types of pricing strategies. The pricing strategies are standing much on what aims the company has put itself to achieve. See (Appendix 7).
Owing to the accessibility of wide variety products the pricing is complete according to the market and geographic segment. Each sub-brand of coca cola has different pricing strategy. Their pricing strategy is base on the competitors pricing, Pepsi is one of their competitor in soft drink industry. The Coca-Cola Company choose their pricing objective they believe will be most effective in dispensing their brand to customer, to do this Coca-Cola use market-skimming pricing.
Coca Cola Company use marketing-skimming as there is a enough number of purchasers that have a high demand, also Coca Cola sets an primary high price and then lower the price to make the product available to a extensive market. Coca Cola Company use penetration pricing strategy as they want to hold maximum share of the market by maximum profit. Coca Cola use discount pricing, where their products prices are often become down during sale periods and special occasions, like Christmas, Easter etc. Also Coca Cola use competitor pricing, where to meet the competition pricing, their products pricing are set about the same level as it competitors.
Illustrate how promotional activity is integrated to achieve marketing objectives.
“Promotion being an element of marketing mix consists of communication among the customer and seller of that product” (Kotler, et al, 2005). Promotional activities are important element because, these activities are performed in order to inform customers about the product and it includes personal selling, adverting, public relations, sales promotion, direct marketing etc.
An advertisement, for instance helps a buyer to get to know about the company and it is products, this can be done by bill boards, banners or posters. The benefit of advertisement is that it informs people about different products and services, their utilities, cost and other requirements. The disadvantage is cost because advertising is more expansive.
In personal selling companies use their staffs to sell their product after face-to-face communication with the customer and seller efforts to convince a customer to purchase the product. Personal selling is one of the ways to keep good customers relationships, but this method is expensive.
“Sales promotion is short term incentives to encourage purchase or sales of a product or service” (Kotler, et al, 2005). Here are some examples of sales promotions activities and it includes buy-one-get-one-free, bonus points, free gift cards, vouchers and coupons, competitions and prize draws, etc. The advantage is that sales promotion can help companies to provide right information to customers, also it encourage repeat purchases and customer loyalty, but the advantages are that it increase price sensitivity and it is generally for a short duration
Public relations play an important role in promotion. It can be used to create a good image of the company for example magazines, TV or radio etc. PR is inexpensiveness of the cost, but it is hard to predict about the responses and it increase the risk.
Direct marketing is where a company selling their products directly to people such as fliers or street advertising. It allows targeting specific customer and it can be measureable, but it is difficult to get it is direct impact and it can be quite expansive.
Coca Cola use different methods of advertisement and the company spends a significant amount of money in order to be seen on billboards, radio, magazines, television, and on the internet. The Coca cola Company uses advertising as its key source of increasing buyer consciousness. It mostly uses the television; this source allows the company’s products to attract more customers.
Coca Cola uses the radio as another method of advertisement and this is a cheaper then TV. They use personal selling, where the company train their sales staffs, which they preform as a representative of the company to the shops. Newspapers and magazines are other forms of advertising that is extensively used by Coca Cola.
Moreover, Posters, signs and billboards are also broadly used as an important part of the Coca Cola promotion. Coca Cola billboards are normally placed at the city centres and their posters are usually displayed at the shops, public transport and restaurants like McDonald’s, KFC, etc.
In addition, Internet is another method where different forms of Coca-Cola advertisements are placed. Specially, the brand online advertisement is assumed through the wide use of banners, on-site sponsorships and several other formats of online advertisements.
Analyse the additional elements of the extended marketing mix
Marketing mix has three additional elements: People, Process and Physical Evidence
People are one of the elements of service marketing mix. People define a service. This mentions to the people who are in straight contact with the customer such as staff. One of the important parts in selling a product is the company’s staff because most customers rely on a decent service before purchasing a product. For example, the employees in Coca Cola Company have a standard uniform. The companies always focus on friendly and quick service to its customers from their staffs. The process of the product is essential in marketing. This determines the capability of the product to supply the demand of the consumers.
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The process at Coca Cola Company is transparent and hidden (the whole process is not visible to the customers). Coca Cola has two types of processes which is involves bottling and labelling solutions. The most important stage that Coca Cola consider is control of the company to get products at the agreed time and good quality, and the last step they consider is, the selling of beverage for target customers of distributors.
Physical evidence is an important element of marketing mix where customers will base their decisions based on the service which intangible. Companies’ physical evidence is supported by signs, symbols and artefacts of the business itself. Examples of this would be the signage in Coca Cola which reassures the customer through branding.
Plan marketing mixes for two different segments in consumer markets.
Coca Cola Company is focusing on target market; when it markets a product it mainly consider on demographic and physiographic segmentations; where demographic segment before it markets it identify the consumer groups in: age, sex, education, race, and occupation, and in physiographic it divides the market into different levels as: lower class, middle class, and upper class to identify their customers. Coca Cola segments different ages. The company focus on whole population in the world, but young generation is the target marketed of the company. Also Coca Cola segments different income levels by packing. For example, customers who have small income, Coca Cola has small returnable glass bottle, for middle people it has small non returnable bottle and for rich and higher income people, the company has Coca Cola tin.
Marketing mix for Diet Coke:
Coca Cola developed a new product. This product is a diet drink by the name of Diet Coke. They have designed the marketing mix of product which is detail in below:
Product: Diet Coke is a very fresh and tasty diet drink. This new and fresh drink is made to provide the consumers with energetic feel with taste as well. Diet Coke is available in different sizes of which start from ‘330ml – 2L bottle’. This drink is mainly for the “female teenagers from age 16 – 24”. (Get Me Media, 2012)
Price: Price of Diet Coke is very reasonable as compared to its major competitors. According to Tesco price its 330ml bottle is for 65p and 2L bottle is for £1.98.
Place: placement has an important role to play in the products success and failure. That is why the company makes sure that the Diet Coke is place in such a way in market that it’s in reach of every customer. They have very strong distribution channel and their product is available on maximum stores in the city.
Promotion: For a product of such high standards like Diet Coke it requires good promotional activities. For this purpose the Coca Cola Company have chosen following promotional tools: for advertisement the company have use different types of media like television, newspaper, magazines, internet and radio.
Illustrate differences in marketing products and services to businesses rather than consumers
There are some characteristics to a service such as: lack of ownership, intangibility and inseparability. Each of these taken into account when marketing a service, see (Appendix 8). A product is something which is tangible where as a service is intangible. A product is much easier than the service because after marketing and selling a product there is something tangible to be seen by the customers for they are satisfaction but in services they cannot because it’s intangible. Basically, the marketing of product is particularly focused on 4P’s in marketing mix namely product, price, place, and promotion. The Coca Cola Company analyse the major demand of their customers in order to find out a product that can respond the market demand.
Firstly, Coca Cola Company focuses on the strength as well as eliminates the vulnerabilities of marketed products in order to improve products to meet customer’s demand as much as possible. Secondly, they focus on the pricing factor in product marketing because the price must be set to match with the purchasing power of a target group. The Coca Cola know the nature price of selling products. Thirdly, the Coca Cola focus on place because place of product marketing refers to distribution channels to deliver and sell the product to customers. Lastly, they create the promotion on the product in order to persuade customers and motivate the sale in a short term.
On the other hand, a service is the action that provide for customers. The service marketing is generally use 7P’s which is extended from 4P’s by adding people, process and physical evidence. It is important for any service industry to employ appropriate staffs or people. Employing and training of staffs have good impact that is why the Coca Cola Company gives training to their staffs because most of customers will judge the quality of their service from staffs. Therefore, Coca Cola employ staffs that have good and interpersonal skills.
The essay shows that marketing mix (4P’s and 7P’s) is a very important part of creating marketing strategy, also it is crucial for a company to implement their marketing concept successfully. The Coca Cola Company develops their product or service to meet the customer’s needs and wants; then they seem into determining how their consumer going to receive the product and they consider direct or indirect channels of distribution. The Coca Cola Company will decide a price for their products that ensures a profit. Finally, they promote their product by using different advertising methods to attract customers.
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