Concept of Marketing Mix
Marketing mix is one of the major concepts in modern marketing. It is the combination of various elements which constitutes the company’s marketing system. It is the set of controllable marketing variables that the firm blends to produce the response it wants in the target market. Though there are many basic marketing variables, four factors are most important, called the four P’s of Marketing Mix: Product, Price, Place and Promotion. However, in recent times, the ‘four P’s’ have been expanded to the ‘seven P’s’ with the addition of process, physical evidence and people.
The “Four P’s”, which are still regarded by many theorists as the main ingredients in the Marketing Mix, were introduced by McCarthy.
Dividing the multitude of marketing variables or mix into four distinct categories makes it much easier to formulate a marketing strategy. The four categories are (1) product, (2) place, (3) price, and (4) promotion, and are commonly called the “four p’s.” Note also that the client is not part of, but rather is the target of the marketing mix (Perreault, Jr. & McCarthy, 2004, p. 38).
Before developing a marketing mix, the marketer usually has a target market in mind. Once the target market is determined, the decisions about each of the four P’s of marketing mix will be made with this target market in mind. The marketers will make product, place, price, and promotion decisions that meet this target market’s needs and wants. The marketers will develop a product that the target market needs, set a price the target market will pay, make the product available at stores convenient to the target market, and advertise the product where the target market will see the ads.
A detailed discussion on each of the four P’s of Marketing Mix follows now:
1. Product Component of Marketing Mix
Product stands for various activities of the company such as planning and developing the right product and/or services, changing the existing products, adding new ones and taking other actions that affect the assortment of products. Decisions are also required in the areas such as quality, features, styles, brand name and packaging.
A product is something that must be capable of satisfying a need or want, it includes physical objects, personalities, places, organizations and ideas.
The second aspect of product components is product planning and development. Product planning embraces all activities that determine a company’s line of products. It includes:
- Planning and developing a new product,
- Modification of existing product lines, and
- Elimination of unprofitable items.
Product development encompasses the technical activities of product research, engineering and decision.
The third aspect of product is, product mix policies and strategies. Product mix refers to the composite of products offered for sale by a company. The product mix is four dimensional. It has breadth, length, depth and consistency. The breadth of the product mix refers to how many different product lines are manufactured by a company. The product line is the group of products that are closely related either because they satisfy a class of need, are used together, are sold to the same customer groups, are marketed through same types of outlets, or fall within given price ranges. The depth of the product mix refers to how many items are found in each product line. The consistency of the product mix refers to how closely related the various product line are in end use, production requirements, distribution channels or in some other way.
Major product mix strategies are expansion of product mix, contraction of product mix and modification of existing product. Expansion of product mix means increasing the number of lines and/or the items. Contraction of product mix means either eliminating an entire line or a few items within a line. Alteration of product means modifying the existing product to suit the changing consumer requirements.
All products, like human beings, have certain length of life cycles during which they pass through different identification stages. Broadly, the stages are introduction, growth, maturity and decline. It is the responsibility of the company to identify the stage through which its product passes, so that it could evolve an appropriate marketing strategy to capitalize the opportunities and to overcome the problems.
The second major component of product is branding. A brand, brand name and brand mark are used synonymously. A brand is a name, term, sign symbol or design or a combination of them which is intended to identify the products or services.
Brands help identify the product and differentiate the product from those of competitors. It is an indicator of product quality. Further, brands increase the success of advertising and personal selling. Once the manufactures succeeds in creating brand loyalty for his products, then it would be easier for him to introduce new product it the market.
Yet another integral part of product is packaging. Packaging not only protects the contents, but also helps to identify the product, offers convenience in handling and promoters sales by inducing the customers to buy the product. It is common experience that consumers, sometimes, buy the product attracted merely by the containers.
2. Price Component of Marketing Mix
The second element of the marketing mix is Price. Price stands for the monetary value that customers pay to obtain the product. In pricing, the company must determine the right price for its products and then decide on strategies concerning retail and wholesale prices, discounts, allowances and credit terms.
Before fixing prices for the product, the company should be clear about its pricing objectives and strategies. The objectives may be to set low initial price and raising it gradually or to set high initial price and reducing it gradually or fixing a target rate of return or setting prices to meet the competition etc. But the actual price setting is based on three factors namely cost of production, level of demand and competition.
Regarding retail pricing, the company may adopt two policies. One policy is that he may allow the retailers to fix any price without interfering in his right. Another policy is that he may want to exercise control over the products. Discounts and allowance result in a deduction from the base price.
3. Place Component of Marketing Mix
The third element of marketing mix is place or physical distribution. Place stands for the various activities undertaken by the company to make the product accessible and available to target consumers. There are four different level channels of distribution. The first is-zero-level channel which means manufacturer directly selling the goods to the consumers.
The second is-one-level channel which means supplying the goods to the consumer through the retailer. The third is-two-level channel which means supplying the goods to the consumer through wholesaler and retailer. The fourth is-three-level channel which means supplying goods to the consumer through wholesaler-jobber-retailer and consumer.
It is the responsibility of the company to select the right channel through which the products will reach the right market at right time. The factors affecting the choice of channel are the nature of the product, supply, middlemen, customer, environment, the distribution policy of the company and the cost of the channel.
There are large-scale retail institutions such as departmental stores, chain stores, super-market, malls etc. and small-scale retail institutions such as small retail shop, automatic vending, franchising etc. The company must choose to distribute their products through any of the above retailing institutions depending upon the nature of the product, area of the market, volume of scale and cost involved.
The actual operation of physical distribution system requires company’s attention and decision-making in the areas of inventory, location of warehouses, materials handling, order processing and transportation.
4. Promotion Component of Marketing Mix
The fourth element of the marketing mix is promotion. Promotion stands for the various activities undertaken by the company to communicate the merits of its products and to persuade target customers to buy them. Advertising, sales promotion and personal selling are the major promotional activities. A perfect co-ordination among these three activities can secure maximum effectiveness of promotional strategy.
Advertising to marketing is that power to machinery. It is impersonal presentation and promotion of ideas, goods or services. It has a strong persuasion power. It is a common technique for mass selling.
The advertisement copy must be able to attract the attention of the audience, arouse interest, create desire and stimulate action. The advertisement media chosen should be able to reach maximum number of people at minimum cost.
The second element of promotional mix is the sales promotion. It includes all those marketing activities that stimulate consumer purchasing and dealer stocking the goods. Such activities include issue of free samples, coupons, gift-offer, conducting contest, demonstrations in exhibition etc. The distinct feature of sales promotional activities is that they are purely temporary in nature and are meant for short duration only.
The third element of promotional mix is personal selling. Personal selling involves oral presentation in a conversation with prospective purchases for the purpose or making sales. The purpose is to bring the right products into contract with the right customers and to make certain that sales takes place. The salesman should have right aptitude and qualities to be successful. Hence great care has to be taken in selection, training and compensating the sales people.
Conclusion
The marketing mix is arguably one of the most popular catch-phrases within the realms of marketing. It can be conceived as a recipe for effectively distributing a certain product or brand, or it could be compared to the primary colors that an artist uses to make a painting. The point is that different combinations of the marketing mix can be used to provide different results, or rather a different positioning for the brand. The marketing mix works like a recipe for developing a strong, cohesive marketing plan, and what’s usually referred to as the “Four P’s”, works like the ingredients to such recipe.
The following table summarizes the marketing mix decisions, including a list of some of the aspects of each of the 4 P’s.
For successful marketing, its the duty of the marketing manager to develop a best marketing mix for his product. The key to a successful marketing mix is choosing the right product, selling it at the right price, making it available at the right place, and promoting it in a way that will reach the target customers. Notice that the customer is not part of the marketing mix. The customer is the target of the marketing mix. The marketing mix decisions are made to satisfy the customer.