Marketing Mix
The term
marketing mix was coined in an article written by Neil Borden called “The
Concept of the Marketing Mix.” He started teaching the term after he learned
about it from an associate, James Culliton, who in 1948 described the role of
the marketing manager as a "mixer
of ingredients"; the marketer, E. Jerome McCarthy, proposed a four Ps
classification in 1960, which has since been used by marketers throughout the
world
The marketing mix is a business tool used
in marketing products. The marketing mix is often crucial when determining a
product or brand's unique selling point (the unique quality that differentiates
a product from its competitors).
4 P’s of Marketing
When marketing their products firms
need to create a successful mix
of:
·
The right product
·
Sold at the right price
·
In the right place
·
Using the most suitable promotion.
Marketing
Mix is a combination of marketing tools that a company uses to
satisfy their target customers and achieving organizational goals. McCarthy
classified all these marketing tools
under four broad categories:
·
Product
·
Price
·
Place
·
Promotion
These
four elements are the basic components
of a marketing plan and are collectively called 4 P’s of marketing. 4 P’s pertain more to physical products than
services. Below is an illustration for marketing mix.
1.
Product
Product is
the actual offering by the company to its targeted
customers which also includes value added stuff. Product may be tangible
(goods) or intangible (services).
2.
Price
Price
includes the pricing strategy of the company for its products.
How much customer should pay for a product? Pricing strategy not only related
to the profit margins but also helps in finding target customers. Pricing
decision also influence the choice of marketing channels. Price decisions include:
ü
Pricing Strategy (Penetration, Skim,
etc)
ü
List Price
ü
payment period
ü
Discounts
ü
Financing
ü
Credit terms
3.
Place
(Placement)
It not only includes the place where the product is placed, all
those activities performed by the company to ensure the availability of the
product tot he targeted customers. Availability of the product at the right
place, at the right time and in the right quantity is crucial in placement
decisions.
4.
Promotion
Promotion
includes all communication and selling activities to persuade future prospects
to buy the product. Promotion decisions include:
ü
Advertising
ü
Media Types
ü
Message
ü
Budgets
ü
Sales promotion
ü
Personal selling
ü
Public relations
Limitation of Marketing Mix
Marketing
mix (4 P’s) was more useful in early 19′s when
production concept was in and physical products were in larger proportion.
Today, with latest marketing concepts,
marketing environment has become more integrated. So, in order to extend the
usefulness of marketing mix, some authors introduced a fifth P and then seven P’s (People, Packaging,
Process). But the foundation of Marketing
Mix still stands on the basic 4P’s.
Example
with respect to Maruti's SWIFT
1. Product:
Initial launch version with basic
features in Lxi/Vxi/Zxi formats
2. Price:
At 4.84 lacs (on road Mumbai) much lower
than other competitors in the B + segment.
3. Promotion:
High decibel campaign kicked-off during the Football World cup 2006.The
campaign emphasized the curvy sports car hatchback design targeting sport lover
youth segment.
4. Place: Selective distribution initially
based on order-booking only in select cities and only through company dealerships. Dealers carry no
inventory. Long delivery cycle time
Extended P’s of marketing
Booms and Bitner
included three additional 'Ps' to accommodate trends towards a service or
knowledge based economy:
All people who directly or
indirectly influence the perceived value of the product or service, including
knowledge workers, employees, management and consumers.
Procedures, mechanisms and flow
of activities which lead to an exchange of value.
The direct sensory experience of a product or
service that allows a customer to measure whether he or she has received value.
