2-2-5-Using-The-Marketing-Mix-To-Make-Business-Decisions

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How the elements of the marketing mix work together

The interaction between the elements of the marketing mix is crucial for the success of any marketing campaign
A change in one element can have a significant impact on the others
The marketing mix will change as a product moves through different stages of its product life cycle (see sub topic 2.2.1)

How changes to one element can change the entire mix

Changes to product	Changes to price
The product/service is the heart of the marketing mix as it is what the customer is buying and all other elements are based on it The product determines the price, the target audience, and the promotion strategy If the product changes then all other elements of the mix will likely need to change E.g. if a business decides to launch a premium version of its product, it may need to increase the price, target a different audience and use a different promotion strategy to reflect the new product’s value	The price of a product is closely linked to its perceived brand value If a product is priced too high it may be perceived as too expensive by the target audience leading to lower sales If a product is priced too low it may be perceived as low quality leading to lower sales Increasing the price may require changes to the promotion strategy which are aimed at convincing consumers of the products value
Changes to promotion	Changes to place
The promotion strategy can affect the price and distribution channels E.g. If a business decides to launch a high-end promotion strategy, it may need to increase the price to reflect the product’s value	The distribution/sales channels can affect the price and promotion strategy E.g. if a business decides to use exclusive distribution channels, it may need to increase the price to reflect the exclusivity of the product

Using the marketing mix to build competitive advantage

The marketing mix is a powerful tool that businesses can use to build a competitive advantage
Competitive advantage refers to the features of a business and its products that are perceived as superior to its rivals by customers
It is how a firm’s product is made both distinctive and defensible
- Distinctive means that it is different from the competitors
- Defensible means that the business can prevent competitors from copying it

Sources of competitive advantage

Some of the main sources of competitive advantage include customer service, quality and design

There are many ways a firm can gain competitive advantage including innovation, reputation (branding), and building strong relationships with stakeholders, adding value, differentiation, market segmentation and price leadership
Examples of the source of a business’s competitive advantage include:
- Quality
  - Audi is well known for the exceptional quality of the finishing inside their cars
- Delivery times
  - Amazon Prime delivers products within 24 hours of ordering
- Low Price
  - Primark is considered to provide the best value/low price combination
- Reliability
  - Apple Macs have an excellent reputation for long life and reliability
- Ethical stance
  - Tony’s Chocolonely only uses cocoa in their chocolate, which is 100% free of slave/child production
- Design
  - Dyson vacuum cleaners stand out from the crowd with their original design

An integrated marketing mix

An integrated marketing mix is one which correctly combines each element in the best possible way
It can help to build a competitive advantage by creating a cohesive marketing strategy that resonates with customers and sets the business apart from its competitors

Nike: an example of an integrated marketing mix

Product	Price
The company’s products are known for their high quality and innovative design This has helped to create a perception of exclusivity and quality	Nike’s pricing strategy is focused on premium prices that reflect the value of the product This reinforces the brand’s premium positioning
Promotion	Place
Nike’s promotion strategy is focused on creating a unique brand image and messaging that resonates with its target audience E.g. The company’s “Just Do It” campaign is focused on celebrating athleticism and determination This aligns with the brand’s reputation for being a leader in sports apparel	Nike’s distribution strategy is focused on creating a seamless online and offline shopping experience This makes it easy for customers to purchase the brand’s products

Examiner Tips and Tricks

You should be able to discuss which element or elements of the marketing mix are critical in determining competitive advantage and be able to make judgements about which parts of the marketing mix are the most important in different business contexts.

Business GCES EDEXCEL