Marketing mix

Marketing
Key concepts
Product marketing · Pricing Distribution · Service · Retail Brand management Account-based marketing Ethics · Effectiveness · Research Segmentation · Strategy · Activation Management · Dominance Marketing operations
Promotional contents
Advertising · Branding · Underwriting Direct marketing · Personal sales Product placement · Publicity Sales promotion · Sex in advertising Loyalty marketing · SMS marketing Premiums · Prizes
Promotional media
Printing · Publication · Broadcasting Out-of-home advertising · Internet Point of sale · Merchandise Digital marketing · In-game advertising In-store demonstration · Word-of-mouth Brand ambassador · Drip marketing · Visual merchandising

The marketing mix is a business tool used in marketing products. The marketing mix is often synonymous with the 'four Ps': 'price', 'promotion', 'product', and 'place'. However, in recent times, the 'four Ps' have been expanded to the 'seven Ps' with the addition of 'process', 'physical evidence' and 'people'.^[1]

1 History
2 Four 'P's
3 Four 'C's
4 See also
5 References
6 External links

History

The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing Association presidential address. However, this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients", who sometimes follows recipes prepared by others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe from immediately available ingredients, and at other times invents new ingredients no one else has tried.

The term became popular in the article written by Neil Borden called “The Concept of the Marketing Mix.” He started teaching the term after he learned about it with an associate. ^[2]

The prominent marketer, E. Jerome McCarthy, proposed a Four P classification in 1960, which has since been widely used by marketers throughout the world.

Four 'P's

The 'four Ps' consist of the following:^[1]

Product - A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry & the hotel industry or codes-based products like cellphone load and credits. Tangible products are those that can be felt physically. Typical examples of mass-produced, tangible objects are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. ^[1]

Every product is subject to a life-cycle including a growth phase followed by a maturity phrase and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage.^[1]

The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line's depth or by increase the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources and how to configure the product mix so that each product complements the other. The marketer must also consider product development strategies. ^[1]

Price – The price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often, it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.^[1]

When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, marketing penetration pricing and neutral pricing. The 'reference value' (where the consumer refers to the prices of competing products) and the 'differential value' (the consumer's view of this product's attributes versus the attributes of other products) must be taken into account.^[1]

Promotion - represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion. ^[1]

Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations (see 'product' above).^[1]

Place - refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. Various strategies such as intensive distribution, selective distribution, exclusive distribution, franchising can be used by the marketer to complement the other aspects of the marketing mix.^[1]

Four 'C's

Robert F. Lauterborn proposed a four Cs classification in 1993.^[3] The Four Cs model is more consumer-oriented and attempts to better fit the movement from mass marketing to niche marketing.

Product part of the Four Ps model is replaced by Consumer or Consumer Models, shifting the focus to satisfying the consumer needs. Another C replacement for Product is Capable. By defining offerings as individual capabilities that when combined and focused to a specific industry, creates a custom solution rather than pigeon-holing a customer into a product.
Pricing is replaced by Cost reflecting the total cost of ownership. Many factors affect Cost, including but not limited to the customer's cost to change or implement the new product or service and the customer's cost for not selecting a competitor's product or service.
Promotions feature is replaced by Communication which represents a broader focus than simply Promotions. Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the firm and the consumer.
Placement is replaced by Convenience. With the rise of internet and hybrid models of purchasing, Place is becoming less relevant. Convenience takes into account the ease of buying the product, finding the product, finding information about the product, and several other factors.

References

^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j Needham, Dave (1996). Business for Higher Awards. Oxford, England: Heinemann.
^ Banting, Peter; Ross, Randolph E.. Journal of the Academy of Marketing Science (SpringerLink) 1 (1). http://www.springerlink.com/content/mn58860185200184/. Retrieved 2010-11-12.
^ Don E. Schullz, Stanley I. Tannenbaum, Robert F. Lauterborn(1993)“Integrated Marketing Communications,”NTC Business Books, a division of NTC Publishing Group.

"Marketing, The Core". 4th Edition. Kerin, Hartley and Rudelius. McGraw Hill Publishing 2001. http://businesscoaching.typepad.com/the_business_coaching_blo/2009/02/marketing-mix-how-many-ps-in-marketing.html

External links

Marketing Mix (bitesize 4P's) British Broadcasting Corporation (BBC) Schools.
[1] The Marketing Mix of IMC.
[2] Four P’s, Four C’s And The Consumer Revolution.
Marketing Mix Theory The Times 100 Business Case Studies.