Developing The Marketing Mix
Companies who follow the marketing concept will use the marketing mix to conduct their dealings with customers.
The "mix", as it is affectionately known, is really a combination of factors which can be amended or adapted to suit the requirements individual (or groups of) customers. It is the "toolbox" of the Marketer.
An effective marketing program blends all of the marketing mix elements into a coordinated program designed to achieve the company's marketing objectives by delivering value to consumers. The marketing mix constitutes the company's tactical tool kit for establishing strong positioning in target markets.
Once the company has decided on its overall competitive marketing strategy, it is ready to begin planning the details of the marketing mix, one of the major concepts in modern marketing. We define marketing mix as the set of controllable, tactical marketing tools that the company blends to produce the response it wants in the target market. The marketing mix consists of everything the company can
do to influence the demand for its product. The many possibilities can be collected into four groups of variables known as the "Four P's": Product, Price, Place and Promotion.
Product:
Product means the goods-and-services combination the company offers to the target market.Here are some examples of the product decisions to be made:
Price is the amount of money customers have to pay to obtain the product. Some examples of pricing decisions to be made include:
Place includes company activities that make the product available to target consumers. It is about getting the products to the customer. Some examples of distribution decisions include:
Promotion means activities that communicate the merits of the product and persuade target customers to buy it. 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:
However, the marketing mix has been extended! We now have the "Seven P's" to play with: the original four, plus People, Processes and Physical evidence.
These last three are sometimes referred to as the "soft elements" of the mix and are regarded as being relevant to internal rather than external aspects of the organization, although they are all relevant to the customers. Increase in the service industries, during the later half of the last century, has aided the importance of the "Seven P's" as People, Processes and Physical evidence play an important role in adding value and creating competitive advantage.
Although marketers have always considered these aspects, their importance was never formally acknowledged until the 1980's. It is now recognized that they are equally important to all types of marketing activities. This recognition is helping marketing professionals to give improved levels of customer service, thereby providing more and more customer satisfaction.
Companies who follow the marketing concept will use the marketing mix to conduct their dealings with customers.
The "mix", as it is affectionately known, is really a combination of factors which can be amended or adapted to suit the requirements individual (or groups of) customers. It is the "toolbox" of the Marketer.
An effective marketing program blends all of the marketing mix elements into a coordinated program designed to achieve the company's marketing objectives by delivering value to consumers. The marketing mix constitutes the company's tactical tool kit for establishing strong positioning in target markets.
Once the company has decided on its overall competitive marketing strategy, it is ready to begin planning the details of the marketing mix, one of the major concepts in modern marketing. We define marketing mix as the set of controllable, tactical marketing tools that the company blends to produce the response it wants in the target market. The marketing mix consists of everything the company can
do to influence the demand for its product. The many possibilities can be collected into four groups of variables known as the "Four P's": Product, Price, Place and Promotion.
Product:
Product means the goods-and-services combination the company offers to the target market.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 is the amount of money customers have to pay to obtain the product. 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 includes company activities that make the product available to target consumers. It 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 centers
- Order processing
- Transportation
- Reverse logistics
Promotion means activities that communicate the merits of the product and persuade target customers to buy it. 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 promotions
- Public relations & publicity
- Marketing communications budget.
However, the marketing mix has been extended! We now have the "Seven P's" to play with: the original four, plus People, Processes and Physical evidence.
These last three are sometimes referred to as the "soft elements" of the mix and are regarded as being relevant to internal rather than external aspects of the organization, although they are all relevant to the customers. Increase in the service industries, during the later half of the last century, has aided the importance of the "Seven P's" as People, Processes and Physical evidence play an important role in adding value and creating competitive advantage.Although marketers have always considered these aspects, their importance was never formally acknowledged until the 1980's. It is now recognized that they are equally important to all types of marketing activities. This recognition is helping marketing professionals to give improved levels of customer service, thereby providing more and more customer satisfaction.
There is another concern, however, that is valid. The concept of the "Seven P's" has developed from the marketer's viewpoint of what is required; Kotler considers marketing's role from the perspective of what customers and consumers need, and he has introduced a C concept. Kotler's "Four C's" cover the original "Four P's" (product, price, place, promotion) but it is relatively simple to add C's to People, Processes and Physical evidence.
When we do this we see that the marketing focus is made far clearer from the customers and consumers viewpoint. It follow that marketers should produce as P's only what customers and consumers value as C's.
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When we do this we see that the marketing focus is made far clearer from the customers and consumers viewpoint. It follow that marketers should produce as P's only what customers and consumers value as C's.
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"Seven P's" "Seven C's"
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Product Customer value
Product Customer value
Price Cost
Place Convenience
Promotion Communication
People Consideration
Processes Coordination and Concern
Physical evidence Confirmation
_________________________________________________________________________________Thus while marketers see themselves as selling a product, customers see themselves as buying value or a solution to their problem. Customers are interested in more than the price; they are interested in the total costs of obtaining, using, and disposing of a product. Customers want the product and service to be as conveniently available as possible. Finally, they want two-way communication. Marketers would do well to first think through the "Four C's" and then build the "Four P's" on that platform.
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