MARKET ANALYSIS The 4 P’s of Marketing. The Importance of a Marketing Mix If an organization is to be successful with a new product, they must consider.

MARKET ANALYSIS

The 4 P’s of Marketing

The Importance of a Marketing Mix

If an organization is to be successful with a new product, they must consider a variety of variables

Truly successful companies/products ensure that they cover all the areas that are important, just doing one well will not be good enough

Having a great priced product but always out of stock

Covering all the areas is known as the marketing mix

The 4 P’s of the Marketing Mix

The marketing mix is usually divided into 4 major categories

These 4 categories are known as the 4 P’s

Product Price Place Promotion

Real World Example

The marketing failure example we will look at using the marketing mix is McDonald’s McPizza

Although it lasted several years, it was not profitable for McDonalds and was eventually dropped from the menu

Many people wonder why, as they enjoyed these mini-pizzas. We will discover why!

Product Mix

Includes research, product development, packaging, and branding

Branding For the McDonalds pizza, it was given the “Mc”

prefix They had had success with McChicken and Egg

McMuffin, other non burger items Problem started as customers associated

McDonalds with burgers, not pizza Began to blur the company’s identity

Product Mix

Packaging Packaging was a miniature pizza box, protecting the

pizza and establishing the pizza look for the customerResearch

Research showed that pizza was their biggest competitor

Developed technology to create pizza relatively quick (match fast food)

Test markets liked the taste

Promotion Mix

Consists of advertising, sales promotion, and publicity Magazines, TV, and newspaper articles covered

the launch Media gave owners opportunity to explain the

change and reassure customers that they still did hamburgers

TV ads explained the new ovens and attempted to generate excitement

Promotion included free samples, launch parties and store banners and signage

Pricing Mix

Pricing seemed accurate for McDonalds Consumer could buy a

small pizza for same as burger and fries

Large pizza priced competitively with Pizza Hut and Dominoes

Marketing team thought that they could make back the extremely high start-up costs in a couple years but sales slowed

Place Mix

Includes physical distribution, storage, inventory management, and channel selection

This is where the largest problems with the McPizza occurred

Place Mix

Space behind counter is small, area is designed for efficiency with machines close together

Hard to find room for new pizza ovens and ingredients

Employees were trained in the use of the ovens, the pizza prep, and pizza sales with goal of maintaining high customer service

Place Mix

McDonalds had spent $ Billions convincing customers it was a fast-service hamburger place Customers in drive-thru lines were asked to park

for 10 min for pizza If mixed order, hamburger and fries were cold by

the time the pizza came Large pizza box wouldn’t fit through the drive-

thru window, so had to be hand delivered by employees

Pizza tended to be a product that customers developed loyalties too (specific restaurant)

McDonalds Now

McDonalds continues to adjust its marketing mix Local stores are encouraged to develop products for local

markets McBrat (bratwurst with sauerkraut and onion) is popular in

Wisc. and Minn. McLobster popular in tourist season in Atlantic Canada New healthy choices menu following recent trends