The marketing mix is often called the four Ps. What are the four elements?

Assessment 1
Questions
1. The marketing mix is often called the four Ps. What are the four elements?
The 4 p’s of marketing are product, promotion, place and price.
2. In services marketing there is also a fifth P. What does this P stand for?
The fifth p stands for people/personalisation.
3. When marketers refer to a “product”, they mean more than a simple set of tangible attributes,
for example a tennis ball. List at least five attributes including tangible and intangible
attributes that make up a product and identify whether each is a tangible or intangible
attribute.

4. Products and services are classified as being either consumer products or services or business
products or services. Identify 3 consumer and 3 business products and services.
ATTRIBUTE TANGIBLE/INTANGIBLE
Cars Tangible
Computers Tangible
Food items Tangible
Patents Intangible
Goodwill Intangible
Copyrights Intangible

CONSUMER PRODUCTS/SERVICES BUSINESS PRODUCTS/SERVICES
PRODUCTS PRODUCTS
Convenience products Installations
Shopping products Accessory equipment
Specialty products Raw materials
SERVICES SERVICES
Restaurants Computing
Travel Networks & communications
Media Software

5. What is the product lifecycle?
The product life cycle is the length of time from when a product is introduced to
consumers and put into the market until it’s removed from the shelves. The life cycle of a
product is generally separated into four stages; introduction, growth, maturity, and decline.
The product lifecycle is most commonly used by management and by marketers as a factor
in deciding when it is appropriate to increase advertising, reduce prices, expand to new
markets, or redesign packaging.
6. List three strategies that can be used to extend the life of a product at the end of its lifecycle.
1) new advertising campaign.
2) altering the channel of distribution, i.e. online shops.
3) lower prices to maintain interest in the product.
7. Name four characteristics of business markets that are different from consumer markets
1) market structure and demand
2) nature of buying unit
3) decisions and decision process
4) more transactions and more high-dollar transactions
8. Pricing is one of the most difficult aspects of a marketer’s role. What is the four-stage process a
marketer may use to establish price?
The four stage process a marketer may use to establish price is:
1) calculate your costs
2) determine your pricing objectives
3) determine your pricing strategy
4) legislation and regulation

9. When deciding on pricing, it is important to establish whether expenses can be covered by the
price being charged.
A manufacturer of promotional products is considering selling a range of ballpoint pens with the
customer’s company name engraved on them for $135.00 for 30. The manufacturing costs are
$1.50 per pen. Annual expenses including selling and administrative costs except advertising are
estimated at $9, 500 (i.e. total company costs amortised over the product range). How many units
of 30 pens must they sell annually to cover their expenses plus a merchandising campaign of
$8,000?
They must sell at least … units of 30 pens to cover their expenses.
10. What is the difference between fixed costs and marginal costs?
a) Fixed costs are business expenses that are not dependent on the level of goods or services
produced by the business. They are usually time-related, such as interest, salaries, business costs
or rents being paid per month, and they are often referred to as overhead costs. For example, the

rent of a building is a fixed cost that a small business owner negotiates with the landlord based the
square footage needed for its operations.
b) Marginal costs are the change in the total cost that arises when the quantity produced is
increased by one unit; it is the cost of producing one more unit of a product or service. the cost
added by producing one additional unit of a product or service. For example, if a company needs
to build an entirely new factory in order to produce more goods, the cost of building the factory is
a marginal cost.
11. Explain what is meant by the cost of ownership and what is its importance in the marketing
mix?
The cost of ownership is used to calculate the total cost of purchasing and operating a technology
product or service over its useful life. The cost of ownership is important in the marketing mix
because it is used for evaluating technology costs that aren’t always reflected in upfront pricing.
12. Explain the relationship between price and demand.
The relationship between price and demand is most commonly referred to as the law of demand.
The law of demand is when the price of a good increases, the demand of the good falls, and when
the price of a good decreases, the demand of the good rises. Therefore there is an inverse
relationship between price and demand.
13. Give an example of a common psychological element in pricing.
An example of a commonly used psychological element in pricing is when prices are often
expressed as just-below numbers (prices just lower than a whole number). For example an item
that is $3.99 and the consumer sees that as 3 dollars not 4, treating $3.99 as a lower price than
$4.00.
14. There are many methods of distributing products. Name four methods and the features and
benefits of each.
1) direct distribution: the features of direct distribution are, it is a direct to consumer approach
and the manufacturer controls all aspects of distribution. The benefits to this method are the
companies get more control over the whole process, you get your products to consumers faster,
you can collect valuable data on customer buying habits, avoid sharing profits with a third-party
distributor and you can build relationships with your customers.
2) indirect distribution: the features of indirect distribution are they add costs, vendors and
bureaucracy. It tends to increase the cost to the consumer, slow down delivery and take control
out of the manufacturer’s hands. The benefits of indirect distribution are that it could bring in new
levels of expertise, an increased consumer base without the challenge of acquiring the customer,
more time to focus on their product, and could increase the range of their target audience.

3) Wholesaler: the features of a wholesaler include buying in bulk quantities from producers and
resells them to retailers in small quantities, usually deals in a few types of products, assembling
and dispensing a product or function in marketing, and they deal in large quantities of goods. The
benefits of a wholesaler is they are able to sell their products for a lower price as they are selling in
bulk, which reduces the handling time and costs involved.
4) Retailer: the features of a retailer are they purchase in bulk from the wholesalers and sell the
products to the customers in small quantities, they sell to the ultimate final consumers, they
usually maintain a variety of merchandise, personal contact, shop display, and they are generally
the last link. The benefits of a retailer is it allows customers to see what they are buying up close
unlike online stores, the customer walks away with their purchases immediately, and a friendly and
helpful staff also helps to build customer loyalty, in the hopes that customers return again and
again.
15. Many Australian companies look overseas to expand their market. What are the six most
common methods of expanding geographical reach?
1) exporting
2) licensing and franchising
3) partnering and strategic alliance
4) acquisition
5) greenfield venturing
6) foreign direct investment
16. Name the five traditional methods of promotion.
1) personal selling
2) advertising
3) sales promotion
4) direct marketing
5) publicity

17. As a not-for-profit, Save Our Penguins is concerned that they measure the success of
every direct-mail campaign. If they send out 50,000 letters and receive 800 donations what
is their response rate?
Their response rate is 1.6%
18. If it costs Save Our Penguins $0.60 per letter to mail out, and $5,000 for the printing on the
above campaign, what would they need as an average donation to break even?
They would need an average donation of … to break even.
19. The Trade Practices Act (Section 5) contains a number of provisions against deceptive
promotion. Provide two examples of what marketers need to be aware of when
advertising.

1) The first example of what marketers need to be aware of when advertising is
misleading and deceptive conduct which is when promoting your products or services
you must make sure any branding, statement, quote or any other representation is not
false or misleading. One of the most deceptive forms of advertising is not using
component pricing which is when the price of a product or service is advertised in
separate parts. For example, when the price of a car is shown and additional on road
costs are shown separately. When you advertise using component pricing you must
always provide the full price including additional costs in a more bold way.
2) Another example of what marketers need to be aware of when advertising is when
handing out brochures, flyers or promotional materials on public property it usually
requires a permit from your government. For example is some cases under state
environment protection legislation, it could be illegal to put advertising material on a
vehicle.
Assessment 2
Scenarios and Activities

Activity 1:
A friend of yours has decided to start his own business in real estate sales and property
management. He has visions of it growing this into a business that his two sons can join in ten
years’ time. His name is Mark and has come up with the name Markansons for the new business.
He asks your advice on whether this is a good brand name. What would you explain to him about
the characteristics of a good brand and what suggestion would you make about the name he has
chosen?
Well firstly a brand name doesn’t have much value if no one can remember it. Most people
suggest keeping things “short and sweet,” and making sure that whatever name you choose can
be easily spelled and searched for online. The main characteristics of a good brand name is it
should be unique and distinctive, it should be easy to pronounce, identified and memorised, and it
should give an idea about the service or product’s qualities and benefits. I believe Mark has
chosen a great name for his company. The name is short and sweet and you get that it is referring
to ‘Mark and sons’ first glance at it. It is unique, its short and sweet, it tells you that the company is
run by him and his sons, it is easy to remember, and it is easy to pronounce. Of course there is
always room for improvement and one of the only suggestions I would make is when reading it, it
does not really give a clear indication as to what sort of company it is and doesn’t really give an
idea about the service or product’s qualities and benefits; maybe change it to Markansons Real
Estate or something along the lines of that just to give a clear indication as to what sort of
company it is other than that I believe it is an excellent name.