Marketing Aptitude Study Material – Marketing Mix
Contents
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Marketing mix is an important concept in modern marketing. It is the crux of marketing process. It refers to the set of actions or tactics, that a company uses to promote its brand or product in the market. It includes almost everything that a firm uses to affect consumers perceptions favourably towards its products or services, so that the consumer and organisational objectives can be achieved.
However, the 4Ps remain the most popular classification in terms of marketing mix. In 1990, Robert F Lauterborn proposed a 4Cs classification, which is a more consumer-oriented version of the 4Ps.
Elements of Marketing Mix
The elements or components of marketing mix may be grouped broadly under the following four heads
- Product
- Price
- Place
- Promotion
Product
Product refers to the goods and services offered by the organisation for sale to the consumer for a price. In other words, a product is a bundle of utilities consisting of various features and accompanying services.
Product can be broadly classified as follows
Based on Use
Based on use, the product can be classified a
1. Consumer Goods
Products that are purchased for personal consumption by the households or ultimate consumers are known as ‘consumer goods’. Clothing, food, automobiles and jewellery are all examples of consumer goods. Based on consumer’s buying behaviour, the consumer goods can be farther classified as
- Convenience Goods Goods which are brought frequently without much planning or shopping effort and are also consumed quick, are called convenience goods.
- Shopping Goods These are the goods which are purchased less frequently and are used very slowly and choice for these products are made considering its suitability, price, style, quality and products of competitors and substitutes, if any like clothes, shoes, household appliances.
- Speciality Goods Speciality goods have particularly unique characteristic and brand identification for which a significant group of buyers are willing to put generally special efforts to buy them.
2. Industrial Goods
These goods are meant for use as inputs in production of other products or provision of some service and include raw materials, machinery, components and operating supplies. These are meant for non-personal and commercial use.
Based on Durability
Based on durability, the products can be classified as
- Durable Goods
Durable goods are products which are used for a long period. Examples of such goods are captial goods such as refrigerator, car, washing machine, etc. - Non-durable Goods
Non-durable goods are products that are normally consumed in one go or last for a few uses. Examples of such products are soap, salt, pickles, sauce, etc.
Based on Tangibility
Based on tangibility, the product can be classified as
- Tangible Goods
Tangible goods have a physical form, that can be touched and seen e.g., groceries, cars, raw materials, machinery, etc. - Intangible Goods refer to services provided to the individual consumer or to the organisational buyers. Medical treatment, postal, banking and insurance services, after sales services, performance and goodwill of product.
Services
These are intangible, inseparable, variable and perishable products that normally require more quality control, supplier credibility, adaptability which satisfies wants and needs. Examples include haircuts, legal advice and appliance repairs.
Price
It is the amount charged for a product or service. In other words, price is the consideration in terms of money paid by consumers for the bundle of benefits, he derives by using the product or service. It is the exchange value of goods and services in terms of money.
Various factors that have to be kept in mind while fixing the price are demand for a product, cost involved, consumers ability to pay, prices charged by competitors for similar products, government restrictions, etc.
Price is the only element in the marketing mix of a firm that generates revenue. Rest of them generate only cost. Price and volume of sales together decide the revenue of any business.
The various factors affecting the pricing policies and decision are
1. Internal Factors
Internal factors are categorized as
- Organisation Factors The marketing manager’s role is to assist the top management in price determination and administer the pricing within policies laid down by top management.
- Marketing Mix Price is one of the important element of the marketing mix and therefore must be coordinated with the other elements: product, promotion and distribution.
- Product Differentiation The price of the product also depends upon the various characteristics offered by the product.
- Cost of a Product Cost and price of a product are closely related. The most impiortant factor is the cost of production. In deciding to market a product, a firm should also try to decide what prices are realistic, considering current demand and competition in the market.
2. External Factors
External factors are categorized as
- Product Demand The market demand for a product or service has a big impact on pricing. Since, demand is affected by the potential buyers, their capacity and willingness to pay, their preference, etc are taken into account while fixing the price.
- Competition The prevailing information about what price the competitors are charging for similar products and what possibilities lay ahead for raising or lowering prices, also effect pricing.
- Behaviour and Nature of Buyers The nature and behaviour of the consumers and users, for the purchase of a particular product or services, do affect pricing, particularly if their number is large.
- Government Rules and Regulations The regulatory pressures, anti-price rise and control measure effectively discourage companies from cornering too large a share of the market and controlling prices.
Place
Goods and services are produced to be sold to the consumers. They must be made available to the consumers at a place where they can convenietly make purchase. Place is concerned with various methods of transporting and storing goods and then making available for the customer.
Getting the right product, to the right place, at the right time, involves the distribution system and the choice of distribution method depends on a variety of circumstances.
Making the products available, it involves a chain of individuals and institutions like distributors, wholesalers and retailers who constitute company’s distribution network.
Promotion
Promotion is an important ingredient of marketing mix as it refers to a process of informing, persuading and influencing a consumer to make choice of the product of the company in question.
Promotion is done through personal selling, advertising, publicity and sales promotion. It is done mainly with a view to provide information to prospective consumers about the availability, characteristics and uses of a product.
7Ps of Marketing: In case of services, the producer-oriented model of marketing mix consist of 7Ps.
Including the above 4PS, there are additional 3Ps and they are
- People People refers to the employees of the organisation who comes in contact with
the customers in the process of marketing. - Process Process refers to the systems and processes followed within organisation.
- Physical Evidence It refers to all tangible, visible touch point that the customer will encounter before they buy, elements like uniform of employees, signboards, etc.
Factors Affecting Marketing Mix
Factors affecting marketing mix are
1. Uncontrollable Factors
- Consumer’s behaviour
- Competitor’s behaviour
- Intermediaries behaviour
- Government’s behaviour
2. Controllable Factors
- Product policy
- Branding policy
- Packaging policy
- Pricing policy
- Promotion policy
- Distribution policy
- Other factors
4Cs of Marketing
4Cs consumer-oriented model of marketing mix are as follows
- Consumer In this model, the products replaced by consumer. Marketers focuses more on consumer satisfaction.
- Cost Price is replaced by cost. Here the cost refers to the total cost of owing a product. It includes cost to use the product, cost to change the product and cost of not choosing the competitor’s product.
- Communication Promotion is replaced by communication. Communication includes advertising, public relation, personal selling and any method that can be used for proper, timely and accurate communication between marketer and consumer.
- Convenience Place is replaced by convenience. It focuses on ease of buying, convenience in reaching to the store/product and convenience in getting product information.
Tit-Bits
- AIDS awareness campaign is an example of non-profit marketing
- Planned cost service means extra profit on the same cost.
- In case of price sensitive goods, the demand is not price sensitive at all.
- Product mix means various products designed by the company.
Check Your Skills
1. Which of the following is the element of marketing mix?
- Selling
- Costing
- Creating
- Product
- All of these
2. Capital goods market deals with
- non-durable goods
- goods
- products
- durable goods
- All of these
3. Convenience goods are those which
- consumed easily
- distributed easily
- purchase frequently
- All of these
- None of these
4. Service market is related with
- tangible
- intangible
- Both ‘1’ and ‘2’
- All of these
- None of these
5. Personal selling is a part of
- Promotion
- place
- price
- product
- All of these
6. Which of the following is intangible features of a product?
- After sale services
- Performance of product
- Goodwill of product
- All of the above
- None of the above
7. First ‘P’ of 4Ps is
- product
- rice
- place
- romotion
- None of these
8. Retailer is a sub-element of
- place
- product
- price
- promotion
- All of these
9. Distribution is also known as
- product
- place
- promotion
- All of these
- None of these
10. DSA of a bank is a sub-element of
- price mix
- distribution mix
- promotion mix
- All of these
- None of these
11. Effective marketing helps in
- developing new products
- creating a competitive environment
- building demand for products
- All of the above
- None of the above
12. Promotion in marketing means
- passing an examination
- elevation from one grade to another
- selling the products through various means
- selling the product in specific areas
- None of the above
13. Which among the following can be an example of non-profit marketing?
- Disney setting up a park in Hong Kong
- Setting up an Ayurvedic massage centre
- AIDS awareness campaign
- All of the above
- None of the above
14. The correct 4Ps of marketing are
- product, place, promotion, profit
- product, price, place, promotion
- product, promotion, price, place
- All of the above
- None of the above
15. Who among the following is not a part of the marketing mix?
- Wholesalers
- Retailers
- Customers
- All of these
- None of these
16. Which of the following is the crux of marketing process?
- Marketing planning ‘
- Marketing mix
- Marketing research
- Market expansion
- Market scanning
17. Which of the following comes under the decisions concerning the products?
- Product attributes
- Branding and packaging
- Product mix
- AH of the above
- None of the above
18. A product is referred to as
- tangible and intangible item
- tangible item
- anything
- All of the above
- None of the above
19. A product represents a market’s offering as it is preceived by
- present customers
- potential customers
- company
- All of the above
- None of the above
20. Which of the following is/are tangible product?
- House and TV
- Car or scooter
- Furniture
- All of these
- None of these
21. Which of the following is consumable item?
- Cold drink or milk
- Newspapers
- Petrol
- Gas
- All of these
22. Which of the following is intangible service?
- Entertainment
- Unsought product
- Shopping product
- Speciality product
- All of the above
23 … is a raw material for a sugar industry.
- Machine
- Paper
- Coal
- Sugarcane
- None of these
24. The characteristics of product includes
- product mix
- price
- packaging
- All of these
- None of these
25. … .is bundle of utilities consisting of various features and accompanying services.
- Planning and development stage
- Cost
- Risk
- Plan
- Product
26. Planned cost service means
- costly products
- extra profit on the same cost
- extra work by seller
- All of the above
- None of the above
27. In case of prestige goods, the demand is
- price sensitive
- not price sensitive
- not price sensitive till a level
- All of the above
- None of the above
28. If you are a marketing manager of a firm, you would prefer the customers who are
- less price sensitive
- more price sensitive
- depends upon the marketing mix
- All of the above
- None of the above
29. Which among the following is a component of customer satisfaction?
- Fair price
- Profitability
- Brand
- All of these
- None of these
30. With pricing the products are priced below list price for a temporary period to create buying urgency.
- preference
- by-product
- promotional
- market penetration
- None of these
31. Promotion mix includes
- direct marketing
- ales team
- advertisement
- Public relation
- All of the above
32. Marketing mix can be changed due to
- law and regulation of government
- economic policies of respective country’s government
- climate
- All of the above
- None of the above
33. Direct mail includes
- letter heads
- printed envelops
- folder and catalogues
- All of the above
- None of the above
34. 4Ps of marketing means [SBI Clerk 2008]
- primary marketing techniques
- person, place, product and promotion
- promoting authority
- purpose, place, passion and product
- None of the above
35. Product mix means [SBI Clerk 2008]
- distributing a mix of products
- collecting ideas to sell better
- satisfying the customers
- bundle of product required by the customer
- various product designed by the company
36. Non-product selling means [SBI Clerk 2009]
- selling variety of products ‘
- selling only one products
- selling seasonal products
- selling service
- All of the above
37. The best promotional tool in any marketing is [SBI PO 2010]
- e-promotion
- public relations
- viral marketing
- word of mouth publicity
- advertisements
38. One of the following is not included in the 4 Ps of marketing. Find the same. [SBI PO 2010]
- product
- rice
- production
- Promotion
- None of these
39. Customisation is useful for [SBI PO 2011]
- designing customer specific products
- call centers
- public relation
- motivating the staff
- None of the above
40. One of the following is not included in the 7 Ps of marketing. Find the same [SBI PO 2010]
- product
- price
- production
- promotion
- None of the above
41. The best promotional tool in any marketing is [SBI PO 2010]
- pamphlets
- newsletters
- word of mouth publicity
- egional advertisements
- Viral marketing
42. Who has proposed a four ‘cs’ classification of marketing mix?
- Philip Kotler
- R F Lauterborn
- Albert Frey
- William Layzer
- None of these
43. A company’s product mix refers to certain
- width
- ength
- depth
- consistency
- All of these
44. The internal factors affecting the pricing decision is/are
- cost of the product
- marketing objectives
- stage of the product in its life cycle
- price elasticity
- All of the above
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