Marketing is a continually evolving discipline and as such can be one that companies find themselves left very much behind the competition if they stand still for too long. One example of this evolution has been the fundamental changes to the basic Marketing mix. Where once there were 4 P’s to explain the mix, nowadays it is more commonly accepted that a more developed 7 P’s adds a much needed additional layer of depth to the Marketing Mix with some theorists going even going further.
THE MARKETING MIX
Simply put the Marketing Mix is a tool used by businesses and Marketers to help determine a product or brands offering. The 4 P’s have been associated with the Marketing Mix since their creation by E. Jerome McCarthy in 1960 (You can see why there may have been some need to update the theory).
Neil Borden in the year 1953 introduced the term Marketing mix, an extension of the work done by one of his associates James Culliton in 1948.
Marketing Mix – A mixture of several ideas and plans followed by a marketing representative to promote a particular product or brand is called marketing mix. Several concepts and ideas combined together to formulate final strategies helpful in making a brand popular amongst the masses form marketing mix.
The marketing 4Ps are also the foundation of the idea of marketing mix.
Product: A product is an item that is built or produced to satisfy the needs of a certain group of people. The product can be intangible or tangible as it can be in the form of services or goods.You must ensure to have the right type of product that is in demand for your market. So during the product development phase, the marketer must do an extensive research on the life cycle of the product that they are creating.
A product has a certain life cycle that includes the growth phase, the maturity phase, and the sales decline phase. It is important for marketers to reinvent their products to stimulate more demand once it reaches the sales decline phase. Marketers must also create the right product mix. It may be wise to expand your current product mix by diversifying and increasing the depth of your product line. All in all, marketers must ask themselves the question “what can I do to offer a better product to this group of people than my competitors”.
In developing the right product, you have to answer the following questions:
- What does the client want from the service or product?
- How will the customer use it?
- Where will the client use it?
- What features must the product have to meet the client’s needs?
- Are there any necessary features that you missed out?
- Are you creating features that are not needed by the client?
- What’s the name of the product?
- Does it have a catchy name?
- What are the sizes or colors available?
- How is the product different from the products of your competitors?
- What does the product look like?
Price: The price of the product is basically the amount that a customer pays for to enjoy it. Price is a very important component of the marketing mix definition. It is also a very important component of a marketing plan as it determines your firm’s profit and survival. Adjusting the price of the product has a big impact on the entire marketing strategy as well as greatly affecting the sales and demand of the product. This is inherently a touchy area though. If a company is new to the market and has not made a name for themselves yet, it is unlikely that your target market will be willing to pay a high price.
Although they may be willing in the future to hand over large sums of money, it is inevitably harder to get them to do so during the birth of a business. Pricing always help shape the perception of your product in consumers eyes. Always remember that a low price usually means an inferior good in the consumers eyes as they compare your good to a competitor. Consequently, prices too high will make the costs outweigh the benefits in customers eyes, and they will therefore value their money over your product. Be sure to examine competitors pricing and price accordingly.
When setting the product price, marketers should consider the perceived value that the product offers. There are three major pricing strategies, and these are:
- Market penetration pricing
- Market skimming pricing
- Neutral pricing
Here are some of the important questions that you should ask yourself when you are setting the product price:
- How much did it cost you to produce the product?
- What is the customers’ perceived product value?
- Do you think that the slight price decrease could significantly increase your market share?
- Can the current price of the product keep up with the price of the product’s competitors?
Place: Placement or distribution is a very important part of the product mix definition. You have to position and distribute the product in a place that is accessible to potential buyers. This comes with a deep understanding of your target market. Understand them inside out and you will discover the most efficient positioning and distribution channels that directly speak with your market.
There are many distribution strategies, including:
- Intensive distribution
- Exclusive distribution
- Selective distribution
- Franchising
Here are some of the questions that you should answer in developing your distribution strategy:
- Where do your clients look for your service or product?
- What kind of stores do potential clients go to? Do they shop in a mall, in a regular brick and mortar store, in the supermarket, or online?
- How do you access the different distribution channels?
- How is your distribution strategy different from your competitors?
- Do you need a strong sales force?
- Do you need to attend trade fairs?
- Do you need to sell in an online store?
Promotion: Promotion is a very important component of marketing as it can boost brand recognition and sales. Promotion is comprised of various elements like:
- Sales Organization
- Public Relations
- Advertising
- Sales Promotion
Advertising typically covers communication methods that are paid for like television advertisements, radio commercials, print media, and internet advertisements. In contemporary times, there seems to be a shift in focus offline to the online world. Public relations, on the other hand, are communications that are typically not paid for. This includes press releases, exhibitions, sponsorship deals, seminars, conferences, and events. Word of mouth is also a type of product promotion. Word of mouth is an informal communication about the benefits of the product by satisfied customers and ordinary individuals. The sales staff plays a very important role in public relations and word of mouth. It is important to not take this literally. Word of mouth can also circulate on the internet. Harnessed effectively and it has the potential to be one of the most valuable assets you have in boosting your profits online. An extremely good example of this is online social media and managing a firm’s online social media presence.
In creating an effective product promotion strategy, you need to answer the following questions:
- How can you send marketing messages to your potential buyers?
- When is the best time to promote your product?
- Will you reach your potential audience and buyers through television ads?
- Is it best to use the social media in promoting the product?
- What is the promotion strategy of your competitors?
Your combination of promotional strategies and how you go about promotion will depend on your budget, the message you want to communicate, and the target market you have defined already in previous steps.
Marketing Mix 7P’s
The 7Ps model is a marketing model that modifies the 4Ps model. The 7Ps is generally used in the service industries.
Here is the expansions from the 4Ps to the 7Ps marketing model:
People: People refer to the staff and salespeople who work for your business, including yourself.When you provide excellent customer service, you create a positive experience for your customers, and in doing so market your brand to them. In turn, existing customers may spread the word about your excellent service and you can win referrals.
Give your business a competitive advantage by recruiting the right people, training your staff to develop their skills, and retaining good staff.
Process: Process refers to the processes involved in delivering your products and services to the customer. It is also about being ‘easy to do business with’. Having good process in place ensures that you:
- repeatedly deliver the same standard of service to your customers
- save time and money by increasing efficiency.
Learn more about business processes, procedures and standards.
Physical evidence: Physical evidence refers to everything your customers see when interacting with your business. This includes:
- the physical environment where you provide the product or service
- the layout or interior design
- your packaging
- your branding.
Physical evidence can also refer to your staff and how they dress and act.Consider how your store’s layout, fixtures and signage can build your brand and increase your sales.
An example of a company using the 7Ps strategy
Take a look at HubSpot as an example, which was founded in 2006; Hubspot has 8,000+ customers in 56 countries and sells software. What does their marketing mix look like?
This is a top level overview; you would take this into greater detail and ask the following questions:
1. Products/Services: Integrated toolset for SEO, blogging, social media, website, email and lead intelligence tools.
2. Prices/Fees: Subscription-based monthly, Software-As-Service model based on number of contacts in database and number of users of the service.
3. Place/Access: Online! Network of Partners, Country User Groups.
4. Promotion: Directors speak at events, webinars, useful guides that are amplified by SEO and effective with SEO. PPC Social media advertising, e.g. LinkedIn.
5. Physical Evidence: Consistent branding across communications.
6. Processes: More sales staff are now involved in conversion.
7: People: Investment in online services.
4’Cs of Marketing
The 4Cs marketing model was developed by Robert F. Lauterborn in 1990. It is a modification of the 4Ps model. It is not a basic part of the marketing mix definition, but rather an extension. Here are the components of this marketing model:
- Cost – According to Lauterborn, price is not the only cost incurred when purchasing a product. Cost of conscience or opportunity cost is also part of the cost of product ownership.
- Consumer Wants and Needs – A company should only sell a product that addresses consumer demand. So, marketers and business researchers should carefully study the consumer wants and needs.
- Communication – According to Lauterborn, “promotion” is manipulative while communication is “cooperative”. Marketers should aim to create an open dialogue with potential clients based on their needs and wants.
- Convenience – The product should be readily available to the consumers. Marketers should strategically place the products in several visible distribution points.
Whether you are using the 4Ps, the 7Ps, or the 4Cs, your marketing mix plan plays a vital role. It is important to devise a plan that balances profit, client satisfaction, brand recognition, and product availability. It is also extremely important to consider the overall “how” aspect that will ultimately determine your success or failure.By understanding the basic concept of the marketing mix and it’s extensions, you will be sure to achieve financial success whether it is your own business or whether you are assisting in your workplace’s business success. The ultimate goal of business is to make profits and this is a surefire, proven way to achieve this goal.
All the elements of the marketing mix influence each other. They make up the business plan for a company and handled right, can give it great success. But handled wrong and the business could take years to recover. The marketing mix needs a lot of understanding, market research and consultation with several people, from users to trade to manufacturing and several others.
Source
http://www.managementstudyguide.com/marketing-mix.htm
Bitner, M. J. and Booms, H. (1981). Marketing Strategies and Organization: Structure for Service Firms. In Donnelly, J. H. and George, W. R. (Eds). Marketing of Services, Conference Proceedings. Chicago, IL. American Marketing Association. p. 47- 52.
McCarthy, E. J. (1964). Basic Marketing. Richard D. Irwin. Homewood, IL.
http://www.managementstudyguide.com/marketing-mix.htm
http://economictimes.indiatimes.com/definition/marketing-mix