10-minute guide on the
Marketing Mix
General Marketing
“In order to cater to
the needs of an
identified market
segment, an
appropriate
combination of the
4P’s has to be
developed.”
The marketing mix is probably the most common marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing mix elements are price, place, product, and promotion. Getting the marketing mix right or wrong can make or break a business. This 10 minute guide provides you with a basic overview of the Marketing Mix, which will help you get your marketing mix right to achieve your business objectives. Marketing Mix The concept is simple. Think about another common mix ‐ a cake mix. Most cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar. It is the same with the marketing mix. The offer you make to your customer can be altered by varying the mix elements. So for a high profile brand, increase the focus on promotion and desensitise the weight given to price. In order to cater to the needs of an identified market segment, an appropriate combination of the 4P’s has to be developed. 4P’s 1. Product The first element of the marketing mix is product. A product is anything which can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include physical objects, services, events, persons, places, ideas or mixes of these. This element involves decisions concerning product line, quality, design, brand name, label, after sales services, warranties, product range, etc. An appropriate combination of features and benefits can provide the product with a USP (unique selling proposition). For luxury goods for instance, quality is often the most important to customers. This will enhance the customer loyalty in favour of its products and give it a competitive edge. 2. Price The second element is the price, which affects the volume of sales. It is one of the most difficult tasks of the marketing manager to get the price right. The variables which significantly influence the price of a product are: demand of the product, cost, competition, brand equity, and government regulation. Other variables of price to consider include: determination of unit price of the product, pricing policies and strategies, discounts and level of margins, credit policy, terms of delivery, payment, etc. Pricing decisions have direct influence on the sales volume and profits of the firm. For commodity products, price is, for instance, the key determinant of success. Price, therefore, is an important element of the marketing mix. The right price can be determined through pricing research and by adopting test‐marketing. 10-minute guide on the
Marketing Mix
General Marketing
3.
Place This is another key marketing mix tool, which stands for the various activities the company undertakes to make the product available to target customers. Place mix or delivery mix is the physical distribution of products at the right time and at the right place. It refers to finding out the best means of selling, sources of selling (wholesalers, retailers, and agents), inventory control, storage facility, location, warehousing, transportation, etc. This includes decisions about the channels of distribution, which make the product available to target customers at the right time, at the right place and at the right price. By selecting wrong distribution channels or by using the ones it has traditionally used, a brokerage could be depriving itself of new market opportunities. The difference between online distribution and retail distribution, for instance, is eminent and each has advantages as well as disadvantages compared to the other. You should select the distribution channel that best fits the rest of the marketing mix. 4.
Promotion Promotion refers to the various activities undertaken by the enterprise to communicate and promote its products to the target market. The different methods of promoting a product are through advertisement, personal selling, sales promotion and publicity. Promotion plays an essential role in the success of your brokerage. It raises customer awareness, boosts sales and builds your brand and reputation. But marketers must be creative and wise enough to promote their products with the proper marketing tactics. For more information on what marketing can do for your brokerage, have a look at the other 10‐minute guides. Some have argued to increase the marketing mix to the Five P's, to include people. 5.
People People are the most important element of any service or experience. Services tend to be produced and consumed at the same moment, and aspects of the customer experience are altered to meet the 'individual needs' of the person consuming it. Most of us can think of a situation where the personal service offered by individuals has made or tainted a tour, vacation or restaurant meal. Remember, people buy from people that they like, so the attitude, skills and appearance of all staff need to be first class. This is especially true when it comes to complaint handling. Studies have shown that where people in a company handle a complaint exceptionally well, the customer can come away more satisfied than they originally could have. Others would increase the mix to Seven P's, to include physical evidence (such as uniforms, facilities, or equipment) and process (i.e. the whole customer experience e.g. a visit the Disney World). 10-minute guide on the
Marketing Mix
General Marketing
6.
Physical Evidence Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues such as: •
Packaging •
Internet/web pages •
Paperwork (such as invoices, tickets and despatch notes) •
Brochures •
Furnishings •
Signage (such as those on aircraft and vehicles) •
Uniforms •
Business cards •
The Premises (such as the importance of a clean or prestigious premises for a restaurant) 7.
Process For the purposes of the marketing mix, process is an element of service that sees the customer experiencing an organisation's offering. It's best viewed as something that your customer participates in at different points in time. Variables which can affect a customer’s enjoyment of a service during a process may include; the greeting, the waiting periods, the booking system and the payment process. Hence, process is the intangible experience that also influences customers’ perception of your product or service.
Consistent Marketing Mix A marketing mix must be consistent for any product. Pricing, for example, must be consistent with packaging and perceived product quality. If one of these is not in line with others, then sales might suffer as a consequence. Each knows through experience that there is no ‘one best way’ to mix the ingredients. Different combinations may be used depending upon one’s needs and objectives. In marketing, there is no standard formula for a successful combination of ingredients. Marketing mixes vary from company to company and from situation to situation. The right marketing mix is important for any product to have a long life cycle. Further readings 10 minute guide on What is Marketing 10 minute guide on What Marketing can do for your Brokerage 10 minute guide on Marketing Research References www.marketingteacher.com http://en.wikipedia.org/wiki/Marketing_mix