Marketing Mix, Food and Beverages Field - Dominos Pizza - Essay Example

Marketin Mix Marketing mix is one of the most important concepts and frameworks which help managers to develop effective product development and implementation process. Marketing mix refers to the adjustment of productive capacity and technology to consumer demand. Technically, it encompasses both product planning and product development, which in reality are synonymous (Marketing Mix 2009). In consequence, managers shall rely on the term product development in its broadest sense. Product development is concerned with offering the right goods at the right time, at the right price, in the right quantities, in the right place. Referring to the process of evolving new products, it is closely associated with market development (Boone and Kurtz 2002). Marketing Mix Product The concept of a product defines uniqueness nature and qualities of goods proposed to the market. Decisions in this area determine the products to be produced and stocked, as well as details concerning their appearance, form, size, package, quantities, timing of production, price lines, and anticipated market segments. Product combines the function of analyzing, classifying, and organizing information into commercially feasible new products, and the marketers function of assessing unsatisfied wants and needs and identifying profitable market opportunities. Usually this activity necessitates compromise among the engineering, production, marketing, and accounting departments. For instance, the high specifications stressed by engineering may push costs above market acceptance. Effective product development adopts a critical but positive posture. Management cannot be satisfied with current products, regardless of how good they are. Such an attitude and expression of expectations achieve an even better match of corporate offerings with consumer expectations (Lim and Rusetski 2006). The role of the sales force should be geared to company and marketing department objectives. The starting point of the sales program is company goals. Volume, profit, industry, territory, product, image, and rateof-return goals influence the direction and scope of sales activities. The practical range of sales alternatives for a company may vary from the companys own sales force, to the use of a variety of wholesalers including sales agents and manufacturers agents, to the elimination of salesmen by such techniques as mail order. Procedures for selecting salesmen vary from simple informal interviews to interviewing committees aided by batteries of psychological tests (Boone and Kurtz 2002). Price Price is accorded more attention than any other marketing factor. In an economy of abundance, non-price principles assume increasing marketing importance and products are differentiated on other bases than price. Style, color, symbols, and brands become more significant, and higher rather than lower prices may actually increase sales. For abundance brings widespread discretionary income, and price becomes a less significant component of the marketing mix than the economic literature might lead one to believe. Non-price competition and price confusion, rather than price clarity, now seem to be the rule. Buyers are concerned not only with price, in their purchases, but also with service, status, and image. Low price alone does not result in a transaction. Consumers are not mechanical price calculators and price reactors, as so much theory leads one to believe (Boone and Kurtz 2002). They do not know all the prices, for in reality, discounts, trade-ins, special deals, and premiums cloud the actual price. Prices are limited by direct and indirect competition, costs, and consumer reaction. Pricing is a sensitive and complex decision area affecting sales, costs, and profits for both industrial and consumer goods. For consumers, price reductions and increases have symbolic meanings. A customer may associate a price reduction with a reduction in quality, the anticipation of new models, or even lower prices or poor market acceptance. Higher prices may indicate better quality, a good image, and good value. Customer perceptions of price are important (Lim and Rusetski 2006). Place For many companies, the concept of place determines geographical location of production and distribution centers. These decisions should be based on information from market research, sales analysis, distribution cost accounting, standard costs, surveys, experiments, sales forecasts, simulations, and statistical techniques. The information required concerns competitive prices, cost data, demand estimates, product profitability, salesmen and customer reactions, and middlemen needs. But information about future demand schedules, future competitive reactions, and future costs is incomplete at best. Thus prices must be based on guesses and assumptions, yet they should be determined logically. Businessmen tend to rely more on an average cost approach to pricing than on a marginal approach. Average costs, which are rarely pertinent to an optimal decision, satisfy the desire to "cover our costs and make a profit." In reality, this reliance on average costs can lead to a decision that can actually reduce sales, increase costs, and reduce profits. However, some executives advocate that sunk costs (costs that cannot be revoked and that are not part of the current pricing decision) should be ignored (Boone and Kurtz 2002). They are not affected by current decisions -- nothing can be done about them. Yet it is also recognized that over the long run, they must be covered. The area may be a geographic territory, a list of customers, part of a product line, or a shelf in a retail store. This approach recognizes that salesmen are faced with problems of goal determination, longer and shorter-run plans and strategies, and market development in their own market areas. The creative and innovative powers of the sales force are tapped under the market-area manager concept. Promotion Promotion helps companies to reach target audience and inform potential consumes about the new product or brand. Promotion may be used as complementary or supplementary market-communications activities. Their respective roles depend on company products, customers, and markets. Often they are used in a complementary manner, with advertising paving the way for personal-selling activities. In other situations, such as in making industrial sales, personal selling is usually the most important component, while advertising may be a supplementary activity that helps create awareness. In either case, both should be coordinated by marketing managers (Boone and Kurtz 2002). Salesmen should be aware of advertising plans and programs, and advertising compaigns should be developed within the boundaries of sales tasks, both of which should be viewed as mutually supporting functions. What is the nature of sales tasks? They include the diverse range of activities from making calls on old customers, calling on new prospects, merchandise stocking activities, placement of sales material and literature, handling complaints, preparing call and sales reports, and providing service and maintenance, in addition to making sales. Salesmens activities range over a wide spectrum of situations from maintaining accounts and taking orders to the development and creation of customers (Lim and Rusetski 2006). Companies are placing increasing reliance on promotion results, and many industries and firms have developed special psychological tests. To develop valid and reliable tests is a demanding activity. The benefits of a good sales-control system should be lower selling costs, increased sales effectiveness, better balance of sales effort, more effective adjustment to trends, good target planning, and more time for managing sales personnel. The basic data source for controlling sales activities is sales reports. The most widely used of these is the call report, in which salesmen report on sales calls made. It includes such information as the time and date of the call, time spent with the customer, sales results, competitive information, and information for subsequent calls (Boone and Kurtz 2002). Food and Beverages Field The industry selected for analysis is fast food restaurant chain. Domino’s Pizza is one of the most popular fast food chains attracting millions of customers daily. The main product of this fast food chain is pizza. Today, they propose more than 20 different types of pizza and more tan 30 salads. Price is the main strategic goal which helps Domino’s pizza to attract new customers. Whereas pricing is usually perceived as a short-run action, its implications can be long-run, even to the point of shaping industry structures. Markets that may be viewed as systems of information on cost and demand determine the appropriateness of prices. They contain signals that businessmen must decode. But market information is ambiguous, fragmentary, and imperfect; it contains much uncertainty and is interpreted differently by various executives. To those who can read the signals properly, increased profits are the results. But invariably, pricing decisions are wrong and must be altered, as is evidenced by changing list prices (Boone and Kurtz 2002). Thus, pricing is a process of adjustment in which incomplete data are used for important decisions. No single pricing program is suitable for all firms, since the complexity of pricing situations varies by product, cost, demand, and industry structure, and prices must relate to objectives, information, knowledge of alternative policies, and strategies and adjustments. mation, the dynamics of the market, and the problems of measuring both costs and demand make it a difficult task. Yet, estimates must be made of what management expects demand, cost, and competition to be under various conditions. Then it can develop pricing programs that affect survival, profits, growth, volume, market share, R & D, and image.A distinction is often made between price determination and price administration. The activities and focus of each are different. Price determination refers to the processes and activities employed to arrive at a price for a product. It includes consideration of relative prices of products within the same line, and differences in price for similar products of differing grades and qualities. In Domino, price administration refers to the activities involved in fitting basic prices to particular sales situations (Lim and Rusetski 2006). In order to expend its business, Domino’s pizza selects diverse geographical locations around the country. Its restaurants can be found in business regions and in suburbia. The strategic intent is to reach middle class families who value healthy life style and prefer pizza products proposed by Domino’s pizza. Advertising and promotion are used as complementary or supplementary market-communications activities. Their respective roles depend on Domino’s products, customers, and markets (Boone and Kurtz 2002). Often they are used in a complementary manner, with advertising paving the way for personal-selling activities. In either case, both should be coordinated by marketing managers. Salesmen should be aware of advertising plans and programs, and advertising campaigns should be developed within the boundaries of sales tasks, both of which should be viewed as mutually supporting functions (Marketing Mix 2009; Domino’s Pizza Home Page 2009). In sum, the practical range of sales alternatives for a company may vary from the companys own sales force, to the use of a variety of wholesalers including sales agents and manufacturers agents, to the elimination of salesmen by such techniques as mail order. Procedures for selecting salesmen vary from simple informal interviews to interviewing committees aided by batteries of psychological tests. Companies are placing increasing reliance on marketing mix, and many industries and firms have developed special marketing programs for a single product or brand. References Boone, L.E., Kurtz, D.L. (2002) Management, McGraw-Hill, New York. Domino’s Pizza Home Page. (2009). Available at: www.dominos.com Lim, Lewis K.S , Rusetski, A. (2006). Development of Archetypes of International Marketing Strategy Journal of International Business Studies, 37 (4), 499. Marketing Mix. (2009). Available at: http://www.netmba.com/marketing/mix/ Read More