AVCE Business
Unit 3: Marketing
The Marketing Mix: The Four P’s, PEST and SWOT Analyses
The Marketing Mix: (The 4 P's of Marketing)
Marketing decisions generally fall into the following four controllable categories:
Product
Place (distribution)
Price
Promotion
The term "marketing mix" became popularized after Neil H. Borden published his 1964
article, The Concept of the Marketing Mix. Borden began using the term based on a
description of the marketing manager as a "mixer of ingredients".
The ingredients in Borden's marketing mix included product planning, pricing, branding,
distribution channels, personal selling, advertising, promotions, packaging, display, servicing,
physical handling, and fact finding and analysis. These ingredients were later grouped into the
four categories that today are known as the 4 P's of marketing, depicted below:
The Marketing Mix
These four P's are the parameters that the marketing manager can control, subject to the
internal and external constraints of the marketing environment. The goal is to make decisions
that centre the four P's on the customers in the target market in order to create perceived value
and generate a positive response.
Product Decisions
The term "product" refers to tangible, physical products as well as services. The following are
examples of some of the product decisions to be made:
Brand name
Functionality
Styling
Quality
Accessories and services
Safety
Packaging
Repairs and Support
Warranty
Price Decisions
Some examples of pricing decisions to be made include:
Pricing strategy (skim, penetration, etc.)
Suggested retail price
Volume discounts and wholesale pricing
Cash and early payment discounts
Seasonal pricing
Bundling
Price flexibility
Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of distribution
decisions include:
Distribution channels
Market coverage (inclusive, selective, or
exclusive distribution)
Specific channel members
Inventory management
Warehousing
Distribution centers
Order processing
Transportation
Reverse logistics
Promotion Decisions
In the context of the marketing mix, promotion represents the various aspects of marketing
communication, that is, the communication of information about the product with the goal of
generating a positive customer response. Marketing communication decisions include:
Promotional strategy (push – the product is
pushed onto the customer by encouraging
distributors to take extra stock and pass these
on to the consumer; pull – e.g., a heavy
advertising campaign where customers
approach the reseller and pull the product)
Advertising
Personal selling & sales force
Sales promotions
Public relations & publicity
Marketing communications budget
Constraints on Marketing (PEST)…
Government
Taxation,
complying
with
regulations (e.g., health & safety).
Competitors
Responding to new product lines,
price changes.
Environment
Pressure groups (e.g., anti-smoking;
NIMBY protestors).
Customers
Customer demands for changes in
product line, pricing or other
services.
These external influences are commonly referred to as PEST factors…
P
E
S
T
Political/Legal – Government regulations/law.
Economic – Cashflow (competition, monetary exchanges, stock market prices).
Social/Cultural – Customer demands (changes in product line, pressure groups).
Technological – Production possibilities.
Limitations of the Marketing Mix Framework
The marketing mix framework was particularly useful in the early days of the marketing
concept, when physical products represented a larger portion of the economy.
Today, with marketing more integrated into organisations and with a wider variety of
products and markets, some authors have attempted to extend its usefulness by proposing a
fifth P, such as packaging, people, process, etc. However, the marketing mix is still most
commonly based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the
use of this framework remains strong and many marketing textbooks have been organised
around it.
Task:
(1) Make some product, pricing, placement and promotional decisions for your
marketing plan. You should already have identified the product/s you will be marketing.
How much will you be selling your product for?
Has your market research identified a realistic price band? If so, what is it?
The marketing plan should also detail where you will be selling your product in order to reach
your designated market.
What promotional strategies have you identified in order to sell your product, or simply
communicate an awareness of it to your target market?
Task:
(2) Carry out a PEST analysis for your product…
Identify the political/legal requirements for marketing your product.
What economic factors would affect your plan?
What social/cultural issues could affect the demand for your product/service?
Are there any technological issues which would affect you marketing plan? One of the best
sources for information here is the trade and specialist press for your product. You will need
to scan for your competitors and suppliers. Concentrate on those changes that affect
marketing such as methods of distribution and new products. Pay particular attention to the
use of the internet in terms of relations with suppliers and customers.
Analyse how these issues could affect your marketing strategy and show how important each
of these changes are by giving a ‘weight’ or priority to each.
SWOT Analysis – What is a SWOT analysis
Quite simply, a SWOT Analysis is perhaps the most effective, and objective way for you to
determine how capable your company/organisation is, when it comes to surviving ‘threats’
and capitalising on ‘opportunities’. It is essentially a review of the Strengths, Weaknesses,
Opportunities and Threats as they relate to your business or organisation.
Typically, a SWOT Analysis would be undertaken prior to the establishment of a business
(during the business plan phase), or at any other time when a substantial/major expenditure
may be required e.g. when deciding whether or not to expand the premises, in the case of
increasing your product range/line, or prior to embarking on a major marketing project.
Through a SWOT Analysis you will gain an increased understanding not only of your
business/organisation, but an indication of any critical and remedial action necessary on your
part. The four elements of the analysis need careful consideration and are as follows…
1. Strengths… What is it that your business/organisation does well? Why do your customers
buy from you? What differentiates your business/organisation in the market? What are the
things that are going well for you?
2. Weaknesses… What are the areas of your business/organisation that cause you concern?
What areas or issues do you need to work on? What are the areas/things in your business that
are not right or going well? What areas need improvement?
3. Opportunities… What opportunities are available, which can be taken advantage of…both
now and in the future? Are there new markets that could be tapped with your existing
products and services? What opportunities exist to improve the way you perform your current
activities, and what efficiencies could be gained? What are the new products and services that
can be developed and added? What could you do, that you’re not doing now?
4. Threats… Have there been any significant changes in the industry in which you operate?
What are the issues your business/organisation facing that threaten business? Are there any, or
do you anticipate new competitors in your market?
A thorough and careful analysis of these elements will help you to determine what steps you
need to take to:

Build on the strengths of your business/organisation.

Protect, and correct where necessary areas of weakness.

Highlight and take advantages of opportunities.

Assist you in devising contingency plans to counter possible threats.
On a final note, have the 4 P’s of the Marketing Mix… Product, Price, Place (distribution),
and Promotion…in the back of your mind when assessing each of the elements within the
SWOT Analysis.
Task:
Carry out a SWOT analysis for your product, prioritise those factors you consider most
important.
Link this with the PEST analysis to identify and assess possible marketing opportunities for
your product/business.
NOTE:
The tasks for this assignment will form the basis of your marketing plan and project – do
these thoroughly and the rest of your project will follow fairly easily.