What is the marketing mix?
The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing mix elements are price, place, product, and promotion. Read on for more details on the marketing mix.
The concept is simple. Think about another common mix - a cake mix. All cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So, for a sweet cake add more sugar! It is the same with the marketing mix. The offer you make to you customer can be altered by varying the mix elements. So, for a high-profile brand, increase the focus on promotion and desensitize the weight given to price. Another way to think about the marketing mix is to use the image of an artist's palette. The marketer mixes the prime colours (mix elements) in different quantities to deliver a particular final color.
Every hand painted picture is original in some way, as is every marketing mix. If you'd like to see the marketing mix applied to a real business - then take a look at our Ryan air marketing mix.
Some commentators will increase the marketing mix to the Five P's, to include people. Others will increase the mix to Seven P's, to include physical evidence (such as uniforms, facilities, or livery) and process (i.e., the whole customer experience e.g., a visit the Disney World). The term was coined by Neil H. Borden in his article The Concept of the Marketing Mix in 1965.
Characteristics of Marketing Mix
- 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 would 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.
- Marketing mix has to be reviewed constantly in order to meet the changing requirements: The marketing manager is required 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 complexion of the market.
- Changes in external environment necessitate alterations in the mix: Changes keep on taking place in the external environment. For many industries, customer is the most fluctuating variable of environment. Customers’ tastes and preferences change very fast. Brand loyalty and purchasing power to change over a period of time the marketing manager has to carry out market analysis constantly to make necessary changes in the marketing mix.
- Changes taking place within the firm too necessitate changes in marketing mix: Changes within the firm may take place due to technological changes, or changes in the product line, or changes in the size and scale of operation. Such changes call for correspondent changes in the marketing mix.
The major marketing management decisions can be classified in one of the following four categories: Product, Price, Place (distribution) and Promotion.
These variables are known as the marketing mix or the 4 Ps of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market. The marketing mix is portrayed in the following diagram:
- Product - The product is the physical product or service offered to the consumer. In the case of physical products, it also refers to any services or conveniences that are part of the offering. Product decisions include aspects such as function, appearance, packaging, service, warranty, etc.
- Product Decisions - The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made:
- Brand name
- Functionality
- Styling
- Quality
- Safety
- Packaging
- Repairs and Support
- Warranty
- Accessories and services
- Price - Pricing decisions should take into account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing.
- 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
- Price discrimination
- Place - Place (or placement) decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers. The distribution system performs transactional, logistical, and facilitating functions. Distribution decisions include market coverage, channel member selection, logistics, and levels of service.
- 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 centres
- Order processing
- Transportation
- Reverse logistics
- Promotion - Promotion decisions are those related to communicating and selling to potential consumers. Since these costs can be large in proportion to the product price, a break-even analysis should be performed when making promotion decisions. It is useful to know the value of a customer in order to determine whether additional customers are worth the cost of acquiring them. Promotion decisions involve advertising, public relations, media types, etc.
- 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, pull, etc.)
- Advertising
- Personal selling & sales force
- Sales promotion
- Public relations & publicity
- Marketing communications budget
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 organizations 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. Today however, the marketing mix most commonly remains 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 organized around it.
