Marketing and the Marketing Mix

Marketing is not advertising

Advertising is one part of one of the four decisions. **Marketing** is the whole business of working out what people will buy and then giving it to them. It runs in an order. First **find out** what a market wants, through research. Then decide **who exactly** you are selling to. Only then make the four decisions of the **marketing mix**: what the product is, what it costs, where it is sold and how people hear about it. Businesses that skip straight to the last step are the ones with a great advert for something nobody wanted.

Two ways to find out

Research splits into information you gather yourself and information that already exists.

Which of these is primary research?

A cafe owner is deciding whether to add a lunch menu. Select the TWO activities that are primary research.

• Handing a short questionnaire to customers for a fortnight
• Running a trial lunch menu for a month and recording what sells
• Reading government figures on how much households spend eating out
• Looking at a competitor's published menu and prices

Which sources are secondary?

A different business, researching a new sports drink. Tap the TWO activities that are SECONDARY research.

• The team
• ran a tasting session with forty students
• ,
• read published trade reports on the drinks market
• ,
• interviewed twelve gym members
• , and
• looked back through their own sales records from last summer

Four decisions, not four topics

The marketing mix is often called the four Ps. Each one is a decision the business has to make.

Match each P to the decision it covers

What is wrong with this mix?

A company makes a hand-finished leather bag, charges very little for it, sells it only in a discount warehouse, and promotes it with a luxury magazine campaign. What is the problem?

• The four decisions contradict each other: the product and the promotion say premium while the price and the place say budget, so customers cannot tell what it is
• Nothing, as long as the price covers the cost of making it
• The advertising is in the wrong magazine and everything else is fine
• The product is too well made

You cannot sell to everybody

No business has the budget to reach everyone, and a message written for everyone persuades nobody. **Segmentation** is dividing a market into groups that have something in common: age, income, location, or how they spend their free time. The **target market** is the group or groups a business decides to aim at. This is why segmentation comes first. Each of the four Ps is only right or wrong relative to a chosen segment. A high price is wrong for a budget market and correct for a luxury one, and the same is true of every other decision in the mix.

Marketing in a paragraph

Research gathered first-hand for your own question is _____ research, while information that already exists is _____. Dividing a market into groups with something in common is called _____, and the group a business chooses to aim at is its _____ market. The four decisions of the marketing mix are product, price, promotion and _____, and they have to agree with each other.

Name a target market

A company is launching a cheap, hard-wearing rucksack. Build a statement of its target market that a business could actually use.

One segment, four matching decisions

**"A new bakery is targeting office workers on their lunch break. Explain the marketing mix it should choose. (8 marks)"** "**Product:** food that can be eaten quickly and carried, so filled rolls and boxed salads rather than sit-down meals. **Price:** competitive with the sandwich shops nearby, because this segment compares prices daily and has a fixed amount to spend. **Place:** premises within a short walk of offices, since a lunch break is the constraint the whole business is built around. **Promotion:** a loyalty card and signage on the walking route, rather than broadcast advertising, because the customers are a small group passing the same spot every day." Every decision is justified by the SAME fact about the segment. That is what makes it a mix rather than four separate answers.

What did selling online change most?

For a small business, which of the four Ps did e-business change most fundamentally, and how?

• Place, because a business can now reach customers anywhere without a shop or a wholesaler standing between it and them
• Product, because everything sold online is digital
• Price, because online prices are always lower
• Promotion, because advertising did not exist before the internet

A new business decides

Someone is launching handmade candles from home. Work through their marketing decisions in the right order.

• They have a small budget and want to know whether anyone will buy. What research should come first?
• The research suggests two possible buyers: people wanting cheap everyday candles, and people buying gifts. Which should they choose, and why does it matter?
• They choose the gift market. What follows for Place?

Your turn: launch something

A friend wants to sell a new sports drink aimed at teenagers who play team sports. Advise them on research and on the marketing mix.

• Recommend one primary and one secondary research method, and say what each would tell them
• Describe their target market more precisely than "teenagers"
• Make all four marketing-mix decisions, justifying each one by that target market
• Explain one way selling online would change one of those four decisions