Marketing Mix

Marketing Mix

Marketing Mix

The process of marketing or distribution of goods requires particular attention of management because production has no relevance unless products are sold. Marketing mix is the process of designing and integrating various elements of marketing in such a way to ensure the achieve­ment of enterprise objectives.

The elements of marketing mix have been classified under four heads—product, price, place and promotion. That is why marketing mix is said to be a combi­nation of four P’s. Decisions relating to the product includes product designing, packaging and labelling, and varieties of the product. Decision on price is very important because sales depend to a large extent on product pricing.

Thus marketing mix is the combination of the product, the distribution system, the price structure and the promotional activities. The term marketing mix is used to describe a combination of four elements-the product, price, physical distribution and promotion. These are popularly known as “Four Ps.”

According to Philip Kotler, ‘marketing mix is the mixture of controllable marketing variable that the firm uses to pursue the sought level of sales in the target market’ (Figure 3.1).

Description: Marketing Mix

Characteristics/Features/Nature of Marketing Mix:

1. Marketing mix is the crux of marketing process: Marketing mix involves many crucial decisions relating to each element of the mix. The impact of the mix will be the best when proper weightage is assigned to each element and they are integrated so that the combined effect leads to the best results.

2. Marketing mix has to be reviewed constantly in order to meet the changing requirements: The marketing manager has to constantly review the mix and conditions of the market and make necessary changes in the marketing mix according to changes in the conditions and complexity of the market.

3. Changes in external environment necessitate alterations in the mix: Changes keep on taking place in the external environment. For many industries, the customer is the most fluctuating variable of environment. Customers’ tastes and preferences change very fast. Brand loyalty and purchasing power also change over a period. The marketing manager has to carry out market analysis constantly to make necessary changes in the marketing mix.

4. Changes taking place within the firm also necessitate changes in marketing mix: Changes within the firm may take place due to technological changes, changes in the product line or changes in the size and scale of operation. Such changes call for similar changes in the marketing mix.

5. Applicable to business and non-business organization: Marketing mix is applicable not only to busi­ness organizations but also to non-business organizations, such as clubs and educational institutions. For instance, an educational institution is expected to provide the right courses (product), charge the right fees (price), promote the institution and the courses, and provide the courses at the right place.

6. Helps to achieve organizational goals: An application of an appropriate marketing mix helps to achieve organizational goals such as profits and market share.

7. Concentrates on customers: A thorough understanding of the customer is common to all the four elements. The focus point of marketing mix is the customer, and the marketing mix is expected to provide maximum customer satisfaction.

Marketing Mix Elements: Product Mix, Price Mix, Promotion Mix, and Place Mix

The constituents of marketing mix are said as marketing mix elements. Elements are also referred as decision variables. Marketing mix consists of mainly four elements. Each element is also referred as mix, for example, product mix, price mix, promotion mix, and place mix. Each mix contains a set of decisions.

They are called as 4P’s. Some writers have sited more 4P’s, but other P’s are not very practical and popular. Additional P’s indicate duplication of one or more of basic 4P’s. Here, our discussion is limited to 4P’s only. Figure depicts four elements of marketing mix--

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1. Product Mix:

Product (mix) consists of various decisions relating to product. Product is the basic element of marketing mix because all other elements are required only when there is product. It is the center of all the marketing activities.

Here, product includes both goods and services. Marketer can satisfy needs and wants of consumers by product. Product is the vehicle, medium, or means by which consumers can satisfy their needs. Important and long-term marketing decisions on product may be termed as product strategies.

Product mix concerns with following decisions:

1. Development and introduction of new products

2. Matching the products with needs and wants of target consumers

3. Modifications (in term of qualities, features, and performance) on existing products

4. Product-related strategies including branding, packaging, labeling, colour, weight, grading, etc.

5. Product line decisions including different varieties or models, and product mix decisions including width, depth, length, and consistency

6. Product-related services like after-sales services, home delivery, guarantee, warrantee, and demonstration

7. Study of competitive (or comparative) advantages of products

8. Product life cycle, relevant strategies for each of the stages of product life cycle, and consumer adoption process

 

2. Price Mix:

Price mix is another important element of marketing mix. It is considered as very critical element. Price can be defined as the economic value of product normally expressed in form of money.

The price of product should be set in such a way that buyers can pay and company can earn adequate profits. In case of price-sensitive customers on one hand and the prestige-sensitive customers on the other hand, the pricing decisions become vital in marketing.

Normally, pricing decisions involves:

1. Determining product development costs

2. Determining manufacturing (variable and fixed) costs the product

3. Studying pricing policies and strategies of the close competitors

4. Formulating appropriate pricing policies for the products

5. Deciding on level or margin of profits

6. Deciding on variable v/s fixed pricing, price discrimination, discounts, allowances, and seasonal effect

7. Identifying and analyzing of various relevant factors influencing pricing decisions

8. Pricing policies/strategies in different stages of product life cycle

9. Deciding on price-setting methods

10. Pricing decisions for direct and indirect distribution of products

3. Promotion Mix:

Promotion mix deals with those activities directed to increase sales volume. It is also known as market communication. In today’s marketing practices, market promotion has much vital role. Promotion mix involves all those efforts directed to increases sales of products on a continuous basis.

It includes providing information to customers, inspiring them to buy, and offering incentives. Note that market promotion is concerned not only with raising sales volume, but it is also a tool for establishing long-term relations with the parties involved and is a matter of image, reputation, and goodwill for the company.

Promotion mix consists of following elements or tools:

Advertising:

Advertising is a popular and powerful tool of market promotion. It is a paid form of non-personal presentation and promotion of ideas, goods, and services by identified sponsor. It is a tool for mass communication.

It includes following aspects:

i. Setting advertising objectives.

ii. Deciding on advertising message, copy, media, schedule, agency, and budget

iii. Evaluating social aspects and advertising effectiveness

iv. Coordinating advertising efforts with other tools of market promotion

 

Personal Selling:

It is also known as salesmanship and management relating to personal selling is sales force management.

Personal selling decisions consist of followings:

i. Setting personal selling objectives

ii. Deciding on sale force size

iii. Recruitment, selection, training, transfer, and promotion of salesmen

iv. Remunerating and motivating, and controlling salesmen

v. Associating personal selling efforts with other market promotional tools

 

Sales Promotion:

Sales promotion involves offering short-term incentives to prompt buying and increase sales. It includes temporary efforts to attract customers and induce them to buy. Most popular forms of sales promotion are free gifts, discounts, exchange offer, free home delivery, after-sales services, guarantee, warrantee, various purchase schemes, etc.

 

Sales promotion covers following decisions:

i. Sales promotion objectives

ii. Sales promotion methods – consumer level, salesmen level, and dealer level

iii. Timing of sales promotion

iv. Assessing costs and effectiveness of sales promotion

v. Associating sales promotion efforts with other elements of market promotion

 

Publicity:

It is a non-person stimulation of demand for the product, service, or business unit by placing commercially significant news in mass media or getting a favourable presentation on radio, television, or stage that is not paid by the sponsor. It is also a part of public relations.

It includes:

i. Deciding on objectives of publicity

ii. Deciding on indirect expenses of publicity

iii. Determing types of efforts to get publicity

iv. Assessing impact of publicity on sales and reputation of company

v. Coordinating publicity with other promotional tools

 

4. Place Mix:

Place mix is related to distribution of product. This element of marketing mix basically concerns with physical distribution and channel of distribution. This is the last element of marketing mix but very important as marketing goals can be achieved only if the products reach the hand of consumers conveniently.

This element concerns with making the products available to the customers effectively. That means, the right products can be made available to the right consumers, in the right way, at the right time and at the right place, and in the right form.

Place decisions involve:

i. Studying geographical concentration of customers

ii. Studying types of distribution channels and channel members

iii. Analyzing various relevant factors affecting channel decisions

iv. Selecting suitable channel of distribution.

v. Strategic decisions related to distribution activities

vi. Physical distribution including transportation, communication, warehousing, inventory control, insurance, banking, etc.

vii. Balancing distribution costs and selling price

viii. Designing a suitable distribution network, and long-term distribution strategies

ix. Developing and adopting logistics management for effective distribution of products
Other 3 P’s

5. Process:

Process is a series of actions necessary to provide products or services with the best service to consum­ers. A process can contain methods or procedures applied to obtain the products needed by consumers. A service process has to be fast, easy and friendly to give more value to consumers of a product.

6. People:

People are all the persons involved in the activities of producing products and providing services and products to consumers. People who produce and market a product also have a rating in the eyes of consumers.

7. Physical Evidence:

Physical evidence is a device needed to support the appearance of a product, thus directly showing the quality of products and services provided to consumers.