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Marketing mix

Extracts from this document...

Introduction

Task 1(c) Marketing Mix- Price Price Pricing is an important planned issue because it is related to product positioning. Also, pricing affects other marketing mix elements such as promotion, product features, and channel decisions. The importance of price in the marketing mix differs. In low cost, old markets price can be very important, for instance, in the sale of white mix and gloss paint. However, in modern markets, such as clothing, it could be one of the least appropriate issues. Certain products are designed to equal a particular section. For consumers with limited budgets, price is a major- purchasing condition, whereas for those to whom money is no object price is less important. The opening pricing task is to form a general price target for an organisation which is in line with the marketing aims, and then decide objectives for each of the product lines. Penetration pricing Penetration pricing is the pricing method of setting a fairly low initial entry price, a price that is often lower than the general market price. The expectation is that the first low price will secure market acceptance by breaking down existing brand loyalties. Penetration pricing is most commonly linked with a marketing aim of increasing market share or sales volume, rather than short term profit maximization. The advantages of penetration pricing are that it creates cost control and cost decrease pressures from the start, leading to better efficiency; it also can reach high market penetration rates quickly. However, one of the main advantages is that it creates long term price expectations for the product; meaning that it makes it difficult to eventually increase the prices. The reason for this is because many customers will complain about increasing the price of the product. As the price starts low, even though a product will be developing market share, the product may at first make a loss until consumer awareness is increased. ...read more.

Middle

Advantages: Good for building awareness, effective at reaching a wide audience, repetition of main brand and product positioning helps build customer trust. Disadvantages: Impersonal - cannot answer all a customer's questions, it's not good at getting customers to make a final purchasing decision. (2) Personal Selling Personal Selling is a useful way to run personal customer relationships. The sales person acts on behalf of the organization. They tend to be well trained in the approaches and techniques of personal selling. However sales people are very expensive and should only be used where there is a real return on deals. For example salesmen are often used to sell cars or home improvements where the margin is high. Advantages: Highly interactive - lots of communication between the consumer and seller, Excellent for communicating complex / detailed product information and features, relationships can be built up; important if closing the sale make take a long time. Disadvantages: Costly - employing a sales force has many hidden costs in addition to wages; this is not suitable if there are thousands of important consumers. (3) Sales Promotion Sales promotion tend to be thought of as being all promotions apart from advertising, personal selling, and public relations; for example the BOGOF promotion, (Buy One Get One Free). There are many different types of sales promotion: * Dealer loads, are in between the inducements to attract orders from retailers and wholesalers. They may include a free case with so many cases bought. For example, thirteen for the price of twelve is known as a breaker's dozen. * Competitions, may interest dealers and consumers. For dealers they may be linked to sales with attractive prizes for the most successful dealer. Scratch cards, free draws and bingo cards are popular promotional methods for consumers. * Promotional gifts such as bottle of spirits, clocks, watches or diaries are considered as being useful to encouragement dealers. ...read more.

Conclusion

Coca Cola Company spends millions on advertising each year. Its campaigns are legendary. John Pemperton, the inventor of coca cola, advertised it in the Atlanta journal 29th of May 1886. He labelled it as "delicious" "refreshing" "exhilarating" and "invigorating". Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines internationally. In an oligopoly, there are at least two firms controlling the market. Coca cola is one of the companies that dominate the same market. Such as Pepsi, coca cola zero, Pepsi max. The world's soft drink market is dominated by two players; Pepsi cola and coca cola. The image below indicates that coca cola is more popular and is sold more in markets than Pepsi. They have been successful throughout their existence because of their names and their ability to promote their products. Pepsi is usually second to Coke in sales, but outsells Coca-Cola in some markets. Around the world, some local brands compete with Coke. New Coke Coca Cola is responsible for one of the biggest blunders in marketing - New Coke. In 1985 New Coke came out because in blind taste tests, people preferred Pepsi to Coke. The revelation was startling and Coca Cola decided that it was time to change their formula to make it sweeter like Pepsi. After months of tweaking the formula, doing blind taste tests, research and changing their packaging, New Coke was launched. In taste testing a new Coke method, Coca Cola Company used three different methods, which it tested against traditional Coke and Pepsi.200, 000 consumers took the test, however, only 30,000 or 40,000 actually tasted the new formula which was at last introduced. In addition, most consumers were not informed what they tasted; meaning that most consumers simply had no idea that their preferences were helping the Coca Cola Company to decide whether it should introduce a new formula for Coke. ...read more.

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