Marketing Mix

Marketing Mix Definition

Let's first take a look at the definition of the marketing mix. The marketing mix concept revolves around the 4Ps — product, price, place, and promotion (see Figure 1 below).

The marketing mix is an insightful tool marketers use to deliver customer value. It also helps marketers ensure that all elements of their marketing activities are integrated, optimized, and cohesive. As a result, it helps drive marketing strategy and foster long-term customer relationships.

Fig. 1. The 4Ps of the Marketing Mix

4 Ps of the Marketing Mix

Now that we have a basic idea of the marketing mix let's look at all four elements individually. Each aspect involves its own decisions, helping marketers form an integrated marketing mix.

Marketing Mix: Product

The first element is 'product'. After segmenting the market and finding the target group of customers, marketers have to make numerous product decisions.

Product decisions have to be made by marketers before producing and distributing a product. Important product decisions include:

• Analyzing the value of the product portfolio,

• Determining the position of the product on the product life cycle,

• Evaluating the influences and importance of new product development.

Marketing Mix: Price

The following mix element is price. The three major pricing strategies include customer value-based pricing, cost-based pricing, and competition-based pricing.

To set a fair price, marketers should match the product's actual value with its perceived value by the market. They also need to consider the supply costs, competitors' prices, and the customer's willingness to pay.

Common new product pricing strategies include:

Price skimming - The pricing strategy where the company starts with a high price and then lowers it over time. The idea is to increase the product's perceived value and generate higher profit margins.

Price penetration - The price strategy where the company starts with a lower price, then increases it over time to attract price-conscious individuals.

Marketing Mix: Place

The following marketing mix element is place. Companies can distribute their products directly through their own stores, websites, e-commerce platforms, mail order, or door-to-door. For wider distribution, they can reach out to a third party like a retailer or wholesaler, who then resells the products to customers.

Another aspect of 'place' is market coverage, which refers to how far and wide a company wants to distribute its product or service.

There are three types of market coverage:

• Intensive distribution,

• Selective distribution,

• Exclusive distribution.

Marketing Mix: Promotion

Companies can adopt various promotional tactics, both direct and indirect, to capture the audience's attention.

The five most common types of promotion are:

• Personal selling,

• Advertising,

• PR,

• Direct marketing,

• Sales promotion.

Marketing Mix Examples

To see the marketing mix in action, let's consider the example of Starbucks, one of the most prestigious coffee brands in the world. Figure 2 below outlines the primary product, price, place, and promotion decisions that Starbucks has made to integrate its marketing mix.

Fig. 2. Starbucks Marketing Mix Example

Marketing Mix Strategy

The marketer's main goal is to create an integrated marketing mix. An integrated marketing mix combines and harmonizes different elements of the marketing mix. This is the foundation of a marketing mix strategy.

Here's an example to help you understand this better.

All elements of an integrated marketing mix blend in well with one another to provide the customer with an enticing offer. From the company's perspective, it also helps with planning and executing the marketing strategy properly to maximize financial gains. Furthermore, an integrated marketing mix ensures harmonious cooperation between different departments within the company, such as production, research and development (R&D), accounting, and marketing.

Of all marketing mix elements, 'product' is often said to be the most important; if a product doesn't meet the customer's need, it doesn't matter if the company has the best price, promotional campaigns, or location in town.

Influences on an integrated marketing mix

It is essential to understand the various factors that impact a marketing mix. These include:

The product's life cycle

A product life cycle is the amount of time a product exists on the market, from the moment it is introduced to the end of life. There are four stages in a product life cycle: introduction, growth, maturity, and decline (see Figure 3 below). Knowing where it is on the product life cycle can help the business to implement the right marketing strategy at the right time.

Fig. 3. The Product Life Cycle

The Boston Matrix

This model allows a business to develop its product portfolio and branding. The matrix includes four categories of products: dogs, stars, cash cows, and question marks. Figure 4 below represents the Boston Matrix.

Fig. 4. The Boston Matrix

Product Marketing

Product marketing is a business function that bridges the gap between product management and communications. It is the foundation for an integrated marketing mix.

Marketing objectives

Marketers cannot make decisions about the product or its pricing, promotion, and distribution without an overall marketing objective.

The target market

Understanding the customer's needs and wants is crucial to designing a compelling marketing mix. Many businesses nowadays direct different products in their product portfolio to different customer segments to maximize revenues.

Competition

The market competition level can determine a company's marketing strategy. For example, in a highly competitive market, the business should focus more on differentiating itself through unique branding, original product ideas, and continuous innovation.

Brand positioning

The product's value proposition determines its pricing, promotional strategies, and distribution methods which form the marketing mix. It is one of the first steps to developing an integrated marketing strategy.

Extending the Marketing Mix – 7Ps

In service marketing, the 4Ps of the marketing mix are extended into the 7Ps. These comprise the original 4Ps, in addition to the process, people, and physical evidence elements.

Marketing Mix: People

The first addition to the 4Ps includes 'people'.

It includes the staff, customer service team, salespeople, and even customers. They not only help with selling the product but also contribute to the company's positive image. For example, customer service has a direct influence on customer satisfaction. If the customer service is positive, it will leave a good impression on the customer and entice them to return. Customers can also act as brand ambassadors who spread the word about the business and win referrals.

Marketing Mix: Processes

The next addition includes processes. Processes may include elements like service design or operational efficiency.

The standard process is developed to ensure customers receive the same quality product. The right processes also increase your business efficiency, thus saving time and money.

Marketing Mix: Physical evidence

The seventh P is physical evidence, which is especially important in the service sector.

This includes the business layout, interior design, branding, staff, uniform, etc. The physical evidence should convince the customer to invest their time and money in the service. It's also crucial to match reality with your promise to ensure high customer satisfaction.