Page 557 - Business Principles and Management

Unit 6

price, sell it through retail stores, and advertise it
on the radio. Or it could be to produce a medium-
priced item to be advertised on television and sold
door-to-door to senior citizens. Can you identify
the marketing mix for one of the businesses that
Tony Taylor thought about in the chapter-opening
scenario?
Several companies marketing the same product
PHOTO: © GETTY IMAGES/PHOTODISC. must review their decisions frequently, because con-
may use very different marketing mixes, because
they made different decisions. Furthermore, they

ditions change constantly. Changes in general eco-
nomic conditions, changes in consumer needs, and
the development of new or improved products by
competitors are factors that may require a change
in the marketing mix. Next, you will learn about
the decisions involved in each marketing mix
element.

Coffeehouses are a popular PRODUCT
place for people to meet and
socialize. Which elements of The first marketing mix element is the product. Product can be defined as all
the marketing mix should a attributes, both tangible and intangible, that customers receive in exchange for
new competitor focus on to the purchase price. For example, when consumers buy a computer, they are also
attract customers? buying the company’s customer service and technical support as well as other
intangibles, such as the prestige of the brand name. All of these attributes are
part of the product. Products include services as well as physical goods. A criti-
cal question relating to the product is: What do customers want? Product plan-
ning and development deal with finding answers to that question.
By identifying the target market for a product and knowing what customers
in that market want, the company can design a product to fit those customers.
Market information can help marketers develop a product strategy that includes
decisions such as:
1. The number of items to produce.
2. The physical features the product should possess, such as size, shape, color,
and weight.
3. The quality preferred by the target market.
4. The number of different models and the features of each model needed to
Ethics tip 5. The packaging features of the item, such as the color and the shape of the
serve the various markets the company wants to attract.
package, as well as the information printed on it.
6. The brand name.
Marketing may have one 7. Product guarantees and services the customers would like.
of the worst ethical reputa- 8. The image to be communicated to customers by the product’s features,
tions in business, often packaging, and brand name.
because marketing is seen
as pushing products on PRICE
people who may not need
them, promoting products The second mix element around which marketing decisions are made is price.
with half-truths, and pricing Price is the amount of money given to acquire a product. The many decisions a
products unfairly. Today company makes during product development influence the price. First, the price
marketers concerned about must be high enough to cover the costs of producing and marketing the product.
maintaining long-term rela- If the company decides to manufacture a high-quality product, it would likely have
tionships must act ethically. to set a higher price to cover its costs than it would for a low-quality product.

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