Marketing Mix-Cleaning Services, Essay Example

Marketing Management: The Kindle

This paper gives an analysis of the four cardinal components of the marketing mix and looks at how these components can be put into use by my business in marketing their work and achieving desired market response.

The marketing mix is defined as a set of controllable variables and their levels that an organization uses to influence the market (BPP 2009). The variables are namely product, place, promotion and price. These variables have to give a favorable mix and interplay to secure customer interest and eventual customer satisfaction which is vital in achieving customer loyalty. These variables have to be exploited successfully to achieve favorable business record.

 The product is not just a mere thing with desirable features but also a package of benefits designed to meet needs or provide the desired solutions to a customer. Services can therefore be viewed as products in the perspective of the marketing mix. (Pride, W, Ferrell, O.C. 2007).  The service in our case is cleaning services. We will seek to develop a unique service protocol that will bestow upon the customer a lasting impression of quality and service delivery.

Pricing as a Strategy

This element of the marketing mix covers the basic prices, discounts as well as credit terms that a business offers to its customers (BPP 2009). The price is a key factor for the marketing mix as it determines how many of the consumers can afford the product or service on offer as well as how much the business is able to recoup as gross profit margin on the sales it makes. It also determines the profitability of the product for the producers business. Pricing also forms an integral part of the image. If the service is wrongly priced, it might be taken to be cheap hence substandard. The pricing of the Ipod and the Iphone has set a clear distinction between them and cheap end products. This has also influenced the way most people desire to have an apple product. The pricing of the Ultimate Cleaning Services has also put them within the affordable market range hence making their demand high and sustainable over a long time.

In determining the price the following three costs will be put into consideration.

The relevant unit costs of every extra unit of the services will be used to determine the basic cost of production. This will factor in all the man hours and materials used to deliver the service. This will include the cleaning detergents as well as the floor is that is to be covered during the cleaning.

The second part of the pricing will also depend on the general overheads incurred on the product such as administrative cost as well as the marketing and advertisement costs. Transport costs and advertisement costs that are incurred on periodic basis are also factored in determining the prices of the services.

Finally the intended margin will be factored in to determine the eventual selling price of the product. This will ensure that the target profits can be achieved.  This will be a core part in helping determine the eventual outlay.

Alternative methods in setting prices

Marginal cost-plus pricing.

Marginal cost-plus pricing involves adding a profit margin to the marginal cost of services. This involves making considerations to the gross profit contribution of the service.

Full cost plus pricing.

This is a method that involves calculating the full cost of a service and adding a percentage markup to arrive at the price.

Market skimming pricing.

This is a strategy that involves setting prices that target a specific part of the market to ensure that the service is taken up appropriately.  It involves market penetration pricing where prices are set to attract attention of potential buyers and price skimming where a product can have high initial prices to attract high end buyers as well as fetch high net profits.

Considering that the product being launched has other competitors in the market, the marginal cost plus pricing will not be appropriate as these cannot ignore the existing prices of the precursors as well as the existing market share. The full cost plus pricing is the best option in the current conditions since it will take care of the costs using the existing market knowledge about similar services.

Pricing promotions.

The use of pricing promotions is an option since the various competitors have services that are competing for the same spectrum the market and that the use of pricing promotions will be exploited once a feel of the market has been established.

Expected profits

By retailing a single man hour of service at $ 100 and ensuring that the cost of services and the overheads are minimized, we can target to maximize the gross profit margin per product. If the gross profit margin is 25% then the profit per unit

Then the profit per unit is

25% of $ 100 = $25

If 1 Million man hours are sold in a year – This includes all types of cleaning services.

Then the profit is $ 25× 1,000,000 = $25,000,000

This target is however dependant on the ability to market our services.

Conclusion

Ultimate Cleaning Services has to effectively use the marketing mix to achieve good sales and sustain a good market demand. Most important to them is their targeted market. By ensuring that their services are sold to a cross spectrum of consumers and used both at offices and in households. This will ensure that the services are well marketed and they are well accepted. There is also need to keep asking questions and constantly improving the services (Mindtools.com).

References

BPP Learning Media (2009). Marketing Management. London. BPP Publications.

Mindtools.com. Marketing Mix and 4Ps. Retrieved 16 march 2010. Available http://www.mindtools.com/pages/article/newSTR_94.htm.

Pride, W., Ferrell, O.C. (2007). Foundations of Marketing: Revised Second Edition. Boston: Houghton Mifflin.