Key Idea: The marketing mix is every decision that shapes how customers meet a product. This topic is the seven Ps and how to fit them together for a particular product and customer.
Product, price, place
- Product: the life cycle, the portfolio (BCG), and extension strategies to stretch maturity.
- Price: cost-plus, penetration, loss leader, predatory, premium: each fits a situation.
- Place: direct to customers, or through retailers and wholesalers, or online.
Promotion
- Above the line: mass media such as TV, radio and posters.
- Below the line: targeted methods such as loyalty cards, offers and events.
- Social media: cheap, fast, two-way, but hard to control.
Services and fit
- People: how staff treat customers, and how that differs between cultures.
- Processes and physical evidence: how the service is delivered and what customers can see.
- An appropriate mix: every P pointing at the same target market.
The words to know
| Word | Means | Do not confuse with |
|---|---|---|
| Product life cycle | the stages of a product's sales over time: introduction, growth, maturity, decline | the product's physical life |
| Extension strategy | a way to lengthen the maturity stage, such as a new flavour or a new market | a new product |
| Cost-plus pricing | adding a mark-up to the unit cost | premium pricing, which sets a high price for a high-quality image |
| Penetration pricing | a low price to enter a market and win customers quickly | predatory pricing, which aims to drive rivals out |
| Loss leader | a product sold below cost to bring customers in to buy other things | a product that is failing |
| Below the line | promotion aimed at chosen groups, not the mass media | cheap promotion |
| Physical evidence | the tangible things customers see that show the quality of a service | the product itself |
Name the P and the method, say what it does, then show it in the case and its effect on the target market. For an appropriate mix, check that the Ps agree: a premium price needs premium physical evidence and promotion.
Exam-style question
Lena's Bakery Ltd sells its loaves at $3, while Goldcrust's bakery near Market Square sells a loaf at $2.20. Explain one advantage and one disadvantage for Lena's Bakery Ltd of premium pricing.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.
Important: A premium loaf sold at a discount, or a luxury brand promoted with cheap flyers, sends mixed signals. Judge each P against the target market and against the other Ps. And penetration pricing wins customers; predatory pricing tries to remove rivals.
Tap each card to check yourself.
Lena's crackers: 16,000 packets in 2024, 18,000 in 2025, 17,500 forecast. Which stage? Maturity. Sales have levelled off and are starting to dip.
One extension strategy for the crackers? Any one: a new flavour, a new pack size, selling them in new outlets or abroad, a new use such as a gift box.
Crackers cost $1.00 to make. With a 150% mark-up, the price? $1.00 + 150% = $2.50.
Above or below the line: a loyalty card? Below the line. It targets existing customers, not the mass market.
Name one piece of physical evidence at a bakery. Any one: the shop's look and smell, clean counters, a hygiene certificate by the till, the branded bag.
Zero-level or one-level: crackers sold through Harvest Lane Foods to delis? Two-level: Lena's to a wholesaler, to delis, to the customer.
Exam tips
- Name the P and the specific method, then apply it to the case.
- Pricing: say why the method fits this product and market, not only what it is.
- Extension strategies belong to maturity; say how each would lift sales.
- Above the line reaches everyone; below the line reaches chosen people.
- An appropriate mix is one where every P fits the target market and the others.