The ‘P’ elements making up the marketing mix are Product, Price, Place and Promotion, the foundations of marketing, which will be discussed further during this report. In order for organisations to achieve high customer satisfaction, while still operating at a profit, a successful marketing strategy needs to be implemented and this is where the ‘toolbox’ of marketing becomes a very useful aspect to any marketer.
This report will include discussions on each of the four marketing mix elements and how each of these relates to organisations within the retail petrol outlet market.
PRODUCT A product is defined as “a good, a service, an idea, a place, a person – whatever is offered for sale in the exchange” (Soloman 2011, pg 22).
Every product will have three levels, the core, the actual and the augmented. As there are many different types of products, these three levels may not always be the same from market to market or organisation to organisation. These three levels, in regards to a retail petrol outlet, involve the ‘core’ or benefit that fuel provides to the customer, the ability to travel. In the 2011 Motor Vehicle Census there were 16.4 Million registered motor vehicles in Australia, travelling on average 14 100kms per year per vehicle, consuming in total over 31 186 Million litres of fuel in the year of 2010 (Figures from ABS 2011). This shows the large demand for the actual product of fuel and the large consumer base that is benefited from petrol outlets.
The ‘actual product’ is the types of fuel that a specific retail outlet has available for purchase, which may include petrol, gas and diesel. Lastly, the augmented product, or supporting products that the organisation offers for sale include, but are not limited to, food, beverages, magazines, car supplies, cigarettes and ATM facilities.
Through monitoring current market trends, these organisations have the ability to improve on or expand both the actual product and supporting product range. For example, as the population grows to become more environmentally aware, demand for ‘earth friendly’ products may incline, resulting in it becoming more economically reasonable to introduce into the product range.
PRICE Soloman (2011, p.221) states that product price is the value that customers give up or exchange in order to obtain a delivered product.
Due to the nature of petrol products and having little loyalty from consumers in relation to brand marketing of fuel, the best strategic pricing method would involve one which promotes high volume, short term sales. As there are high levels of competition within the petrol market, there are relatively small margins of difference between pricing from each outlet. It is due to this that organisations need to closely monitor changes in competition strategies and market trends.
There are many factors a retail petrol outlet needs to consider when revising the pricing structure of their actual product. According to the ACCC (Australian Competition & Consumer Commission, 2010), the factors outlined below all need to be considered in the pricing of retail fuel.
There are two classes of environments in which influences occur on the decision making strategies, including pricing, of marketing. Macro-environment, defined by Monash as the major uncontrollable, external forces (economic, demographic, technological, natural, social and cultural, legal and political). The macro-environmental factors influencing retail petrol outlets decisions and pricing strategies include that of:
The International price of refined fuel (makes up approximately 50%...