The marketing mix
The principles of marketing revolve around the governance of the major components of the marketing mix concept. The marketing mix is the process by which organisations promote and market different products simultaneously (Jonathan 2008). Furthermore, the marketing mix is made of product, price, promotion, and price. However, these “4 Ps” of marketing mix are replaced by the concept of the “7 Ps”, which include product, price, place, promotion, people, packaging and positioning (Jonathan 2008). All these concepts are directed towards satisfying the specific targeted market or the demographic target in the market world.We will write a custom Marketing Principles Concept in Business specifically for you
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The product design and structure target specific groups via televisions and other media platforms and distributed in supermarkets and stores with the aim of creating the utility form of the product in the marketplace. The utility creation of a product takes the form of form, place, time, image, and possession utility (Campbell 2005). Moreover, the product design and structuring involves complementarily works with the exchange process in the marketing and promotion environment.
The product exchange process is the process of valuable exchanges to both parties, which represents the customer and the organisation. The consumers receive the satisfactory benefits of the goods/services, while the organisation receives value in the form of money.
For a successful exchange process to occur, the involved parties must meet some conditions, and they include being in a position to offer something valuable, having a reliable communication channel, willing to exchange, and at least two parties’ presence for a successful product exchange process. Ultimately, the product designing, structuring, development, distribution, packaging, labelling, and quality concepts must be considered in a bid to meet the consumer/customer preferences and tastes.
With the evolving technology, global competition has gone up to the extent that many firms find themselves struggling to keep up mainly because they lack clear business objectives. The main objective should be deciding on the product mix to apply. Kotler and Armstrong (2014) define product diversification as the expansion into product areas, which are new to the industry through innovation.
This aspect ensures that the new assortment of goods and services has the capability to meet all emerging customer demands. After providing a balanced product mix, the firm can find and communicate a hook that offers the target market’s awareness to see how that particular product is unique from the rest. Through evaluating three metrics like awareness, sales, and advocacy, firms can easily ensure that their brands are widely known and accepted.
International diversification is also necessary when a firm aims at reaching new global regions outside the organisation’s home market (Finch 2012). An appropriate approach to international markets requires first building a narrow market focus within the home market. This strategy of initially operating on a niche market helps in identifying the dynamics in the business environment and it facilitates the possibility of becoming the dominant player after which the firm can seek bigger challenges in global markets.Get your
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This aspect is facilitated via marketing materials that educate the prospects to the extent of appreciating the products. In a bid to improve the customers’ perception on the firm’s products, the company has to ensure a strong online presence since decision-making about a product today relies on online research. This assertion means that a website is paramount coupled with social media engagement. In addition, participating in multiple geographies with people posing diverse needs facilitates the transfer of learned marketing knowledge from one location to another since it enhances learning and efficacy.
Product management through innovation ensures that customers can get improved products depending on the present market needs. This aspect also ensures that the firm’s products remain useful since they keep on recreating utility. Thorson and Duffy (2012) define utility as the ability to meet diverse needs of the customers at the desired time. Innovation teams are dedicated to identifying emerging opportunities and integrating them into the products as a viable tactic to attain sales.
For example, the current advertising by the Coca-Cola Company including the nametag aimed at sharing a coke drink is creating a social utility among customers. This element reflects image utility, which creates satisfaction from the emotional meaning linked to that brand. Some people prefer to share a coke drink, as it is perceived to create social satisfaction and identity with that brand.
Pepsi’s pricing aspect
Pepsi is a carbonated soft drink manufactured by the Pepsi Company. Over the years, there has been a wide array of products manufactured by PepsiCo in different countries. For a company of this size, it needs an elaborate plan to come up with its pricing strategy in a bid to ensure consistency and competitive advantage against close competitors such as Coca-Cola. This report evaluates the pricing strategies with reference to PepsiCo. PepsiCo aims at providing high-quality goods at the least possible price.
The HRM strategic practices towards cutting the cost of production whilst maintaining efficacy include the expanded use of affordable and recyclable plastic bottles. This aspect ensures that very little costs are incurred during production, which is reflected in the affordable prices attached to Pepsi drinks. In PepsiCo, pricing of soft drinks is based mainly on cost, demand, and competition. Demand-oriented pricing is linked to the customers’ willingness to pay.
Some people will express the interest to get various Pepsi products, but if they find that the prices are high, they fail to buy. The nature of the target market and familiarity of the customer with price ranges for alternative products is also considered (Uggla & Nyberg 2014). The nature of the target market entails their perceptions about the Pepsi drinks. Pricing is one of the most fundamental elements of the marketing mix that is reflected in supply and demand.
Pepsi considers the cost of merchandise is a major consideration before setting prices. Since every firm aims at making profits and ensuring survival in the market, it is necessary to sum up all costs of production, distribution, marketing, and sales. After factoring all the expenditure, firms decide how much they need as profit after which they come up with their final pricing decision.We will write a custom
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In a case where a firm operates in a very fragile industry where costs keep on fluctuating often, it is difficult setting prices, and thus the firm has to keep updating prices with respect to the changing costs (Keillor 2013). This aspect is a safe approach when firms need to maximise profits. For instance, if PepsiCo needs a high-profit margin, then it prices its products at the highest possible price that it believes its customers will be in a position to pay.
PepsiCo uses penetration pricing when getting into new markets after which it can increase the prices once the market share has been attained. If the pricing is captivating, it will induce interest, create the desire to buy, and initiate the purchase (Thorson & Duffy 2012). For instance, when PepsiCo ventures into new regions, it offers its products at the lowest prices as possible to capture customers.
Once the customer base increases and customer generates loyalty to this brand, then the firm can gradually increase the price. Penetration pricing is also used when a new product is being introduced to the market to attract customers within the shortest time possible. This price consideration is more of promoting the business rather than making profits.
Skimming pricing strategy entails coming up with initial high prices before adjusting it to lower rates based on market conditions. The main business objectives in adopting this strategy include maximising short-run profits and stabilising production. This strategy is used in areas where there is minimal competition for market share. Organisations set initial high prices when they are establishing in new markets and especially when they have incurred high costs of establishment (Nardon & Steers 2014).
This strategy aims at catering for the expenditures especially when the firm is experiencing financial challenges. Another factor arises when a firm has limited products and the demand is high. Firms tend to hold their products by pricing highly to ensure that they do not run out of stock before they stabilise. This strategy is used in the short term and after recovering most of the investment, the firm shifts to other pricing strategies like penetration to gain wider market share.
The nature of competition and familiarity of the customer with different brand price ranges influence the pricing. Most firms including Pepsi use this pricing approach. This aspect entails setting prices after doing a comparative analysis on the competitors’ price for similar products and close substitutes. After making a comparison with competitors, a firm is presented with three options that include pricing lower, pricing the same, or pricing higher (Morgan & Rego 2009).
In most cases, if a firm is performing poorly as opposed to its competitors, it prefers to price low in a bid to attract customers. When the demand for its products is high and firms have won the customers’ loyalty, the same firms price the same as the competitors or higher. In addition, advances in technology and value addition can alter this flexible pricing by increasing the frequency of customer purchase.Not sure if you can write
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In a bid to foster healthy business competition, pricing of a product should take into consideration various factors such as products quality, availability of substitute products, quality of competing products, pricing of other alternative products, and the cost of producing that product. This element is useful to avoid a situation whereby a firm lowers prices to attract customers, but ends up making losses (Cateora, Gilly & Graham 2013). A firm should emphasise on low price image, while aiming at achieving future growth.
Product line pricing entails pricing different products based on their quality and customer demand. In other words, firms price products relating to the value they have for the customer. For instance, if customers want to buy products with the highest satisfaction, then they will be required to pay more as compared to the customers who purchase similar products, but of low quality.
If a certain PepsiCo product has more benefits and features, the higher the consumer will pay. If the new assortment meets the customers’ needs, then price increase may not be a concern since they can realise value addition to the product (Jobber 2010). This kind of pricing helps the firm in optimising profits because it offers affordable products to the people with low purchasing power as well as those who can buy high-priced products. In many cases, product line pricing is associated with the customers’ willingness to purchase.
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