Principles of Marketing – The Marketing Mix

One of the fundamental principles of marketing is the marketing mix. The marketing mix consists of four different factors which businesses need to get
right in order to successfully sell their goods and services. The marketing mix is also known as the four p’s, and is as follows.

 Product – This is the first step of the marketing mix. Without a product,
there is nothing to market! The product should aim to fill a gap in the market in some
way or fulfill some type of consumer need. The product should be designed according to consumer need and desire.
 Price – The price of a product should be one which consumers are
prepared to pay while simultaneously allowing the manufacturers to generate profit.
Price is dependent upon the cost of product production, the desired level of profit, and
also the price of competing products.
 Promotion – This refers to the methods a company uses to make consumers aware of
and attracted to a particular product or service. The promotion should be one which show
the product in its best light and also reaches the consumer. Different target markets are
likely to respond to different types of promotion and this should be kept in mind when
designing a promotional campaign. Examples of promotional methods include television
commercials, radio commercials, internet advertising, introductory prices, PR events and so forth.
 Place – This refers to the method of distribution for a product, or the place where consumers will
 be able to purchase it. Considerations relating to place include whether a particular product should
 be sold in all markets or is more suitable for a particular region or nation, the choice of retailers for a certain product, and so on. For example, if
the product is a toy, it should be available to consumers in
 toy stores, as this is where people expect to find toys.

Principles of Marketing – Targeting Particular Consumers

It is essential that a company bringing a product or service to market is aware of who they believe the target market to be. Without a clear target consumer
in mind it will be difficult to decide upon the correct marketing strategy to implement. Some products target a specific, or niche market, while others may
target multiple markets.

Principles of Marketing – Branding

Branding a product in a certain way is essential for its success. Consumers tend to identify with products based on their branding and many consumers stay
loyal to their favored brand. These factors make branding an essential part of the principles of marketing. It is important that a particular product has a
coherent brand identity. This should be reflected through its logos, descriptions, advertising and so on. The brand should convey the identity of the product
and should be something that consumers can relate to. For example, a luxury, high-end product should have branding which gives a luxury, high-end
impression. Incorrect branding is a key reason why products fail to win over consumers.

Emirates Airline Marketing Mix (4Ps) Strategy

Marketing Mix of Emirates Airline analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the
Emirates Airline marketing strategy. The article elaborates the pricing, advertising & distribution strategies used by the company.

Let us start the Emirates Airline Marketing Mix:

Product:

The product strategy and mix in Emirates Airline marketing strategy can be explained as follows:

Emirates airlines serve to its customers through mixed fleet in their product portfolio like Boeing and Airbus. It has always maintained the
legacy of operating with the aeroplanes of biggest sizes. Emirates airlines caters to its consumers at both personal as well as professional
level offering flying services in terms of first class, business class and economy class. First class offers all the premium comforts that
includes the adjustable seats that can be converted into minibars, beds, for privacy and security reasons. Emirates airlines is the first
company to provide shower on flights and private suits. In business class it provides partitions for privacy and also offers USB and laptop
charging point. Emirates airlines offers great deal of entertainment inside the flight and wide range of choice for food items keeping its
customers satisfied with its services. It also offers excellent internal services by means of better housekeeping and healthcare for its
customers. Hence, this gives an overview in the product strategy in the marketing mix of Emirates airlines.

Price:

Below is the pricing strategy in Emirates Airline marketing strategy:

Since Emirates airlines has its hub in Dubai, it serves low cost tickets to its consumers compared to other airlines. Emirates airlines has a
varying pricing strategy in its marketing mix. It has developed shorter and low cost routes without any layover. Although the prices of these
routes is lower, the company generates revenue through volumes. Due to direct flights, Emirates airlines has adopted effective price policy
for the shorter routes. In order to attain flexible pricing for the seats and extract the maximum profits the company also adopts dynamic
pricing policy levying the highest cost per seat. In general company identifies the needs of the customers with different needs and belonging
to differential financial statuses. Emirates airlines also uses premium price policy for its premium customers who demand luxurious and
customised services at fights.

Place:

Following is the distribution strategy of Emirates Airline:

Emirates airlines carries out its operation from Dubai strategically occupying the central hob for all the international routes connecting
eastern and western cities in the world. Being well known for its long routes, Emirates airlines has also introduced new short routes
benefiting its customers. It links various one hundred forty cities across seventy-eight countries and six continents across the globe. Its
distribution strategy involves sale of tickets through travel agents and tour operators.

Emirates also has a website for cancellation of tickets, buying of tickets, rescheduling of the flight and drawing information about the various
periodical offers and discounts.

Promotion:

The promotional and advertising strategy in the Emirates Airline marketing strategy is as follows:

Emirates airlines engages itself in various promotional activities through advertisements in magazines, newspapers, television, radio,
websites etc. The company also sponsored ICC cricket world cup in 2011 as well as 2015 thereby increasing its reach to millions. Emirates
airlines often generates promotional discounts during the off season pricing the tickets at affordable rates attracting the tourists across the
world to Dubai. The company also runs innovative campaigns like “The Kids go free” wherein meals, tickets and accommodation of the kids
was free with two paid members which generated lot of business for the company. The Emirates Airline foundation is committed in providing
aid to various countries during difficult times.Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing
mix of Emirates airlines.

People:

Emirates airlines have a strategy of always focusing on customers. Emirates has got an employee force of more than 50,000 people
worldwide. This includes management, pilots, crew and other staff. The airline carries more than 50 million passengers worldwide.

Process:

Emirates focuses a lot on its services which becomes the backbone of its processes. The airlines has first class lounges, special services,
customer relations and additional services which have a stream-lined end to end process. Every global operation and service is looked after
by the management and priority is given to customer services.

Physical Evidence:

Emirates is one of the leading airline brands which focuses a lot on customer experience. Emirates has a dedicated terminal in Dubai, which
has state of the art facilities for the comfort and luxury of its passengers. Emirate airlines have a new fleet and are equipped with the latest in
entertainment for its customers. Emirates’ stylish offices, lounges at airports, in-flight entertainment all are the physical evidence depicting
luxury and quality. This covers the entire marketing mix of Emirates airlines.

PRICING
Figuring out how much the customer values your product or service and pricing it
accordingly is called value-based pricing.
 5 common pricing strategies
Pricing a product is one of the most important aspects of your marketing strategy.
Generally, pricing strategies include the following five strategies. 
1. Cost-plus pricing—simply calculating your costs and adding a mark-up
2. Competitive pricing—setting a price based on what the competition charges
3. Value-based pricing—setting a price based on how much the customer believes
what you’re selling is worth
4. Price skimming—setting a high price and lowering it as the market evolves
5. Penetration pricing—setting a low price to enter a competitive market and raising
it later

How do you arrive at a value-based price?

Dolansky provides the following advice for entrepreneurs who want to determine a
value-based price. 

 Pick a product that is comparable to yours and find out what the customer pays
for it.
 Find all of the ways that your product is different from the comparable product.
 Place a financial value on all of these differences, add everything that is positive
about your product and subtract any negatives to come up with a potential price.
 Make sure the value to the customer is higher than your costs.
 Demonstrate to customers why the price will be acceptable, which includes
talking to them.
 If there is an established market, the current price range will help educate you
about the customers’ price expectations.
You still have to make sure the value to the customer is higher than your
costs. Otherwise you will lose money with every product you sell.
Eric DolanskyAssociate Professor of Marketing, Brock University
Value-based pricing: Best for differentiated businesses
Dolansky says entrepreneurs often used cost-based pricing because it’s easier. They
may also copy the prices of their competitors, which, while not ideal, is a slightly better
strategy.
In an ideal world, all entrepreneurs should use value-based pricing, Dolansky says. But
entrepreneurs who sell a commodity-like service or product, for example warehousing
or plain white t-shirts, are more likely to compete on low costs and low prices. 
 For entrepreneurs offering products that stand out in the market—for example artisanal
goods, high-tech products or unique services—value-based pricing will help better
convey the value they offer. 
3 ways value-based pricing can provide an advantage
In value-based pricing, the perceived value to the customer is primarily based on how
well it’s suited to the needs and wants of each customer. Dolansky says a company can
gain an advantage over its competitors in the following ways. 

1. The price is a better fit with the customer’s perspective. 

2. Value-based pricing allows you to be more profitable, meaning you can acquire
more resources and grow your business.
3. When a price doesn’t work, the answer isn’t just to lower it, but to determine how
it can better match customer value. That may mean adapting the product to better suit
the market.
Pricing needs to match your target market
To sum up, pricing is one of the most important aspects of your market strategy, which
also includes promotion, placement (or distribution) and people. 

“It’s important when you are considering your price that you realize it is not for yourself,
but for your target customers,” says Dolansky.

All pricing strategies are two-edge swords. What attracts some customers will turn off
others. You cannot be all things to all people. But, remember you want the customer to
buy your product, which is why you must use a strategy that’s appropriate to your target
market.

FACTORS TO CONSIDER WHEN SETTING PRICES (INTERNAL)

1. Marketing Objectives
- Market positioning influences pricing strategy
- Other pricing objectives:
A) Survival
B) Current profit maximization
C) Market share leadership
D) Product quality leadership
2. Marketing Mix Strategies
- Pricing must be carefully coordinated with the other marketing mix elements.
- Target costing is often used to support product positioning strategies based on price.
- Non-price positioning can also be used
3.Costs
- Types of costs:

 Variable
 Fixed
 Total costs

- How costs vary at different production levels will influence price setting
- Experience (learning) curve affects price
4. Organizational Considerations
Who sets the price?
- Small companies: CEO or top management
- Large companies: Divisional or product line managers
Price negotiation is common in industrial settings where pricing departments may be
created

EXTERNAL FACTORS

Nature of Market and Demand

a) Types of markets:

 Pure competition: A market that has a broad range of competitors who are selling the same
products.
 Monopolistic competition: An industry in which many firms offer products or services that
are similar, but not perfect substitutes.
 Oligopolistic competition: A market structure in which a small number of firms has the
large majority of market share.
 Pure monopoly: One firm has the large majority of market share.

b) Consumer perceptions of price and value

Value-based pricing is the setting of a product or service's price based on the benefits it provides to
consumers.

c) Price-demand relationship

 Demand curve: A graphical representation of the relationship between the price of a good
or service and the quantity demanded for a given period of time.
 Price elasticity of demand: A measure of the relationship between a change in the quantity
demanded of a particular good and a change in its 

2. Competitors’ Costs, Prices and Offers

- Consider competitors’ costs, prices, and possible reactions
- Pricing strategy influences the nature of competition:
1. Low-price low-margin strategies restrict competition
2. High-price high-margin strategies attract competition
- t is good practice to compare your pricing strategies against your competitors’. That is called
“benchmarking your pricing/costs against the competition.
3. Other Environmental Elements
  Economic conditions:

- Affect production costs

- Buyer perceptions of price and value

 Reseller reactions to prices must be considered

 Government may restrict or limit pricing options
 Social considerations may be taken into account

TYPES OF PRICING APROACHES

1. COST-PLUS PRICING is the approach of which simply calcucating

your costs and adding a standard markup cost. It ignores demand
and competition. This is a popular pricing technique because:
- It simplifies the pricing process
- Price competition may be minimized
- It is perceived as more fair to both buyers and sellers.
2. BREAK- EVEN ANALYSIS & TARGET PROFIT PRICING
-Break-even charts show total cost and total revenues at different levels of unit volume. The
intersection of the total revenue and total cost curves is the break-even point
-Companies wishing to make a profit must exceed the break-even unit volume
3. VALUE BASED PRICING
- Uses buyers’ perceptions of value rather than seller’s costs to set price
- Measuring perceived value can be difficult, because consumer attitudes toward price and
quality have shifted during the last decade
- Value pricing at the retail level, eg. everyday low pricing (EDLP) vs. high-low pricing

5. Competition based pricing

- Also called going-rate pricing
- May price at the same level, above, or below the competition
- Bidding for jobs is another variation of competition-based pricing, eg. Sealed bid pricing
(where bid prices are not known by the bidders)
Competitor-based pricing
If there is strong competition in a market, customers are faced with a wide choice of
who to buy from. They may buy from the cheapest provider or perhaps from the one
which offers the best customer service. But customers will certainly be mindful of what
is a reasonable or normal price in the market. 
Most firms in a competitive market do not have sufficient power to be able to set prices
above their competitors. They tend to use "going-rate" pricing – i.e. setting a price that
is in line with the prices charged by direct competitors. In effect such businesses
are "price-takers" – they must accept the going market price as determined by the
forces of demand and supply.
An advantage of using competitive pricing is that selling prices should be line with rivals,
so price should not be a competitive disadvantage.
The main problem is that the business needs some other way to attract customers. It
has to use non-price methods to compete – e.g. providing distinct customer service or
better availability.