The marketing mix is a recipe for effective marketing. Using the marketing mix when planning the marketing for a product allows for a consistent approach.Getting a good balance of the 4 Ps will mean an effective marketing campaign.The main pricing strategies areCompetitive pricingCost plus pricingPenetration PricingPrice skimmingDestroyer pricingPrice discriminationCOST PLUS PRICINGThis is the simplest pricing strategy and is aimed at ensuring the business covers its costs and makes an acceptable profit. The total costs of producing one unit of the product are calculated to which is added the required profit margin. This gives the selling price.COMPETITIVE PRICINGWhere ...view middle of the document...
The price is usually raised later.PRICE SKIMMINGWhere a new product is likely to generate a high volume of initial sales (because it is a new product) a high price may be charged in order to maximise profits. The price will be reduced when the initial high demand has subsided.Eg. Apple, Xbox, PlaystationDESTROYER PRICINGA destroyer pricing strategy involves setting a price so low that competitors cannot match it. In this way they will lose customers and be driven out of the market. The price can then be raised without threat of competition.Eg. Woolworths, ALDI,PRICE DISCRIMINATIONSometimes it is possible to discriminate between types of customer for the same product, perhaps based on usage or quality. Car insurance companies, for example, commonly discriminate on the basis of age and perceived risk.PRODUCTA product is anything that is capable of satisfying customer needsA package of benefitsProducts are designed to match needsPhysical goodsQualityStylePackagingDurabilityInstallationAfter salesBandingWarrantyFeaturesA product is defined as"Anything that is capable of satisfying customer needs"The process by which companies distinguish their product offerings from the competition is called branding.For most companies, brands are not developed in isolation they are part of a product group.A product group (r product line) is a group of brands that are closely related in terms of their functions and the benefits they provide (e.g.) Dell's range of personal computers or Sony range of televisions)
