Everything you need to know about elements of marketing mix. The elements of marketing mix are fundamentally four namely product, price, promotion and place though the experts have thought of additional Ps.
Irrespective number, these constitute the heart of marketing decisions from the angle of marketer. Since, it is based on the marketing concept, consumers can not be forgotten. If ‘Ps’ are for marketers, consumers have C’s and A’s.
Therefore, marketing mix is the master mix of sub-mixes namely, product mix, price mix, promotion mix and place mix. These elements of marketing decisions over which firm has control.
Hence, marketing were signifies internal controllable forces. The marketing strategic decisions are there in case of each segment and the variables that make.
Learn about the elements of marketing mix, they are:- 1. Product Mix 2. Price Mix 3. Place Mix 4. Promotion Mix.
4 P’s of Marketing Mix: Product, Price, Place and Promotion Mix
Elements of Marketing Mix – 4 P’s of Marketing Mix: Product, Price, Promotion and Place Mix
The elements of marketing mix are fundamentally four namely product, price, promotion and place though the experts have thought of additional Ps. Irrespective number, these constitute the heart of marketing decisions from the angle of marketer. Since, it is based on the marketing concept, consumers can not be forgotten. If ‘Ps’ are for marketers, consumers have C’s and A’s.
Therefore, marketing mix is the master mix of sub-mixes namely, product mix, price mix, promotion mix and place mix. These elements of marketing decisions over which firm has control. Hence, marketing were signifies internal controllable forces. The marketing strategic decisions are there in case of each segment and the variables that make.
The product is the focus of marketing and marketing efforts. Product is the sum total of physical and psychological satisfaction it provides to the buyer. For instance, a car, in a physical sense, is a fabricated conveyance powered by gasoline engine which with comfortable seating array, moving people from place to another.
To a teenager, with its driving licence, it is a sign that he is no longer a boy-but a fully grown up man, to his father, a particular make is an indication of success in life as a status symbol.
Thus, a product is the sum total of parts like materials used in its construction and its ability to perform, its packaging, its brands and intangibles associated with it—all speak about its personality or image.
The product-mix is the composite of products offered for sale by the firm, over a period of time.
Price is a major marketing tool and helps in directing the product to a specific consumer segment. Price is the value of a product expressed in terms of money. Price in a powerful instrument in which both the buyers and sellers are keenly interested. It is the price of a product or a service that ensures a decent return on investment, guarantees stable economic structure, creates, maintains and extends market and market share.
Price is equal to consumer expectations and expectations imply product, installation, credit, after sale services and so on. Hence, pricing constitutes one of the major problems of marketing management. Every marketing manager is very much particular about his pricing policy, its determination and implementation.
Promotion mix is the communication mix which deals with the personal impersonal persuasive communication about the product or service of the manufacturer. Though companies communicate with their present and potential customers in a wide variety of ways, the most distinguishable categories are two, namely, personal and impersonal.
Personal is direct contact with the customers while impersonal stands for indirect ways namely advertising, sales promotion and public relations.
Place or distribution mix stands for physical distribution system and its matching with consumer needs and to assure safe and timely supply of goods to the consumers wherever they are located. It also includes the institution of middle men or channels of distribution. These two institutions play significant role in marketing as they create place, time and possession utilities.
Elements of Marketing Mix – Production, Price, Distribution and Promotion Mix
In the simplest manner, the basic marketing mix is the blending of four inputs or sub-mixes which form the core of the marketing system:
(1) Product mix,
(2) Price mix,
(3) Distribution mix, and
(4) Promotion mix.
The outputs are optimum productivity and satisfaction.
(1) Product Mix:
Product is the thing possessing utility. It has four components- (a) Product range, (b) Service after sale, (c) Brand, and (d) Package. The product management evolves product mix in consultation with marketing manager.
(2) Price Mix:
Price is the valuation placed upon the product by the offerer. It has to cover pricing, discounts, allowances and terms of credit. It deals with price competition.
(3) Place (Distribution) Mix:
Distribution is the delivery of the product and right to consume it. It includes channels of distribution, transportation, warehousing and inventory control.
(4) Promotion Mix:
Promotion is the persuasive communication about the product by the offerer to the prospect. It covers advertising, personal selling, sales promotion, publicity, public relations, exhibition and demonstrations used in promotion. Largely it deals with non-price competition.
Some marketing experts indicate seven ingredients in the formula of marketing mix. Additional three ingredients are- (1) Packaging, (2) Perception, and (3) Persistence — in all 7 P’s of the marketing formula. Plastic package has assumed new importance in self-service retailing. Perception is a faculty of insight enabling to discover and seize the hidden marketing opportunity, e.g., the ‘hook’ of clove in promise tooth paste, tea bags, ayurvedic ingredients in cosmetics.
Persistence is the necessary attitude to assert one’s strong will against all odds. The entire marketing team must be self-motivated team to demonstrate persistence. For instance, a small company marketing Promise tooth paste adopted a will to do or die and in spite of high pressure selling, advertising onslaught and legal hurdles from multinational (Colgate) it could come up to No. 2 position in matter of five years. So without perception and persistence marketing mix of a new product can only be a failure.
Elements of Marketing Mix – Product, Pricing, Place and Promotion Mix
One of the important requirements for marketing efficiency is a proper product planning. It is essential for a firm to sell the products, which is the choice of potential consumers, who decide the products’ marketing range or production range. In fact, it is an ambiguous state of affairs. In a practical sense, the scope of production and marketing of products are decided by the marketeer, based on its profitability and consumer recognition.
However, the consumers influence the products which stay in the range of marketing. The decision of products on a firm’s marketing range is complex, difficult and always risk averse. It is observed that introducing such products which customers do not buy soon and those products which the customers buy only in small amounts incur financial losses. Therefore, it is essential to plan for products in the market in a way to optimise the profit of the firm and the efficiency too.
An appropriate pricing policy has a positive impact on profit making and sales realisation. The pricing is a directly related factor to the profit and sale of products under different market conditions. The pricing policy adopted will reflect the positioning of the product in the market. These issues may be viewed as either high-price or low-price policies. The effective pricing strategies may be considered according to product age in the market – embryonic, mature and aging.
The case analyses the marketing segmentation approach, considering the demand-line for pricing, allowing discounts and other related matters.
There are three basic elements – (i) product recognition, (ii) price structure and (iii) the distribution planning which are required to develop an effective marketing-mix. The relative importance of these three elements varies from product to product and from time to time. Distribution is often the key to a successful sales and marketing policy. The objective of distribution planning is to make the product available to the consumers at a more convenient outlet.
The distribution planning for products should be considered with prime importance to withstand the market competition. If a competitive product is available at approachable outlets or at low price, there are all chances of foregoing the sale. Therefore, to deal with such competitive market situation a systematic planning for delivering the product to the consumers through different distribution channels, needs to be determined.
The time and distance factor for the delivery of goods normally influences the buying decisions where the manufacturing of the products are subject to consumer order, occasional demands and door to door delivery promises. In this regard, the planning needs to be done evolving different methods for efficient product distribution through identified channels.
Marketing of products in a competitive environment has many avenues. The Fashion Advertisements (FAds) and strategies building for optimum sales realisation are prominent among them. The FAds have a greater impact on the elite clientele group as compared to other measure used for raising the sales. The product branding and packaging technology is the core input for FAds.
Attractive packaging and popular branding have a significant role in the market expansion and product promotion. In a competitive market economy, the brands are hired by the manufactures, for product marketing. In this system, new product managers have to face an uphill task. In marketing new products, it is essential to take potential as well as existing customers into confidence through an effective communication management.
In the absence of building up such awareness, the new product manager gets fringe benefits while the brand owner gets a higher share in the consumer’s rupee. As such, these companies may not be in a position to establish their own brand due to many weaknesses pertaining to capital, technical know-how and market guidance. The future threat in this regard can be visualised in the light of selling their product. In the long run, their identity will be only as a manufacturing unit, but not as a product seller.
Elements of Marketing Mix – Product, Price, Promotion and Place of Distribution Mix
The elements are as explained below:
A product is a utility that satisfies the need of the consumer. A product has various features and accompanying services. If the product is marketed properly, it leads to the satisfaction of consumer wants. Increased level of customer satisfaction leads to greater sales and vice versa. Hence, a product is the main element of the marketing mix. In other words, without a product there is no marketing.
ii. Price Mix:
Correct pricing is one of the important factors of marketing mix. This is because price brings about equilibrium in the supply and demand of a product in the market.
Price is fixed on the basis of the following factors:
a. Material or intrinsic value of the product.
b. Effect of pricing on demand.
For e.g., Higher price lowers the demand and vice versa. Reasonable pricing is thus imperative for the survival and growth of the organization.
Promotion is that element of marketing mix which helps in creating widespread awareness about a product. It communicates the benefits of the product to the consumers providing an impetus to the overall marketing efforts. Promotion includes advertising, sales promotion, publicity, personal selling etc.
Once a product is ready, its timely distribution assumes a lot of importance. New methods and channels of distribution need to be assessed for launching the product in the market. Selection of a suitable channel for distribution saves cost and reduces delay involved in making the goods available at the place of consumption. Thus, distribution helps in creating time, place and ownership utility for the product.
A business should ensure that the distribution of the product in the market takes place much before the commencement of the promotional activities. Otherwise, the whole marketing mix would fail to provide the desired result viz., the increase in sales.
Elements of Marketing Mix – 4 P’s: Product, Price, Place and Promotion
The elements of marketing mix most popularly known as four P’s of marketing are:
Product refers to goods or services or anything of value, which is offered to the market for exchange.
(a) The physical product
(b) The benefits offered by the product
(c) Extended services after sale of product like after sales services, handling consumer complaints or grievances.
The marketing decision related to product includes deciding about the product, its features, quality, packaging, labeling and branding.
Price refers to the amount of money a customer has to pay to buy the product. The price of the product affects the level of demand therefore, the marketer decides about the price after analyzing factors like competitor’s price for similar products, discounts or credit period to be given to customers, value of the product etc.
Place or physical distribution refers to all the activities which make a product available to the target customers or in the target market. Marketing decision related to ‘Place’ includes deciding the intermediaries to reach the target customers, the support to be provided to intermediaries to initiate sales to potential customers, stock levels to be maintained by firm and the intermediaries, storage, warehousing and transportation of goods from manufacturers to consumers.
Promotion of products and services refers to all activities that create awareness about the features, availability etc. of the product or services amongst the target customers and persuade them to buy the product. Marketing decision related to ‘Promotion’ include deciding the combination of tools to be used to promote the product or service. The tools include advertising, personal selling and various promotional techniques like free samples, discounts, credit to customers etc.
The success of a market offer depends on how well and effectively the company has been able to use the combination of all the elements of marketing to create superior value for customers and thus achieve objectives of increased sales volume and higher profits.
Elements of Marketing Mix – 4 P’s: Product, Pricing, Place/Physical Distribution and Promotion
A product is usually referred to something tangible, for example, a chocolate, a pen, a car or a dress. The product also includes ideas, persons and places. Therefore, a product is defined as anything which a manufacturer offers for a value to satisfy the needs or wants of target customers.
From customer’s point of view, a product is a bundle of utilities, which is purchased because it has the capability to satisfy his/her needs or wants.
A customer buys a product which provides benefits viz.:
(i) Functional benefits
(ii) Psychological benefits
(iii) Social benefits
Therefore, the decision to buy the product is influenced by various factors like:
(i) Physical qualities
(ii) Brand name
(iii) Reputation of the manufacturer
(iv) Guaranty or after sales service
(v) Packaging etc.
Therefore, marketing a product is a mixture of tangible and intangible characteristics which are capable of being exchanged for a value and satisfy the needs or wants of customers.
Marketing is exchange of goods or services for a value. The ‘value’ is the money paid to purchase a product. This money represents the sum of values that consumers exchange for the benefit of having or using the product or services and is referred to as price of the product.
Price may be defined as the amount of money paid by a buyer to the seller in consideration of the purchase of a product or a service.
Companies need to be very careful while fixing the pricing for their products or services due to following reasons:
i. No product or service can be launched without a price tag.
ii. Price regulates the demand of a product. Increase in price leads to decrease in demand and vice-versa.
iii. Price is used as an effective competitive weapon. .
iv. Price affects the revenue and profits of a firm.
3. Place/Physical Distribution – (3rd ‘P’):
Physical distribution is concerned with making the goods and services available at the right place so that people can purchase the same. In order to sell goods a manufacturer has to decide on the intermediaries to sell their goods and the channels to distribute goods among its customers.
The consumer products have large number of customers spread over a wide geographical area. It is not possible for a manufacturer to directly reach out to all its existing and potential customers effectively and efficiently. Therefore manufacturers use intermediaries to sell their products and distribute them from the place of production to the place of consumption.
For example, Xellent Traders may appoint one distributor in each state who in turn will appoint dealers in various cities in the state to sell products of Xellent Traders. The dealers in turn sell the products to direct customers. This way Xellent Traders will be able to sell their goods to the customers who are spread across the country through distributors, retailers or dealers. The links between manufacturer and customer are called as channels of distribution.
Channels of Distribution are set of firms and individuals that take title, or assist in transferring title, to particular goods and services as it moves from the producers to the consumers.
Channels of distribution facilitate the following:
a. They establish a network of marketing channels to distribute goods and services.
b. They bring in economy of efforts.
c. They help to cover large geographical area and bring in efficiency in distribution, transportation, storage and negotiation.
d. They bring in convenience to customers as more than one product can be purchased from one place.
e. They provide authentic market information because of their direct contact with customers.
Functions of Distribution Channels:
Channels of distribution overcome the barriers of distribution that may exist between manufacturers and consumers and smoothens the flow of goods by creating possession, place and time utilities.
The important functions performed by various channels of distribution are:
(a) Sorting – Middlemen procure variety of goods from different sources. These goods may differ in terms of quality, nature and size. Before selling goods, middlemen sort them into homogenous groups on the basis of size or quality.
(b) Accumulation – The various channels facilitate continuous flow of supply of goods by accumulating goods into large homogeneous stocks.
(c) Allocation – The wholesale distributors and retailers break the homogenous stock into smaller, marketable lots and sells them to different buyers.
(d) Assorting – Middlemen build assortment of products for resale. Manufacturers produce products of one product line but customers may require different types of products. The middlemen buy products from various manufacturers to meet the varied requirements or demands of customers or end users.
(e) Product Promotion – The manufacturers usually organise advertising and other sales promotion activities but the channels participate and take forward these activities to the customers. For example, it is the retailers who display or demonstrate the products to end users, hold contests or run promotional schemes to increase sales.
(f) Negotiation – Channels are the middlemen who deal with manufacturers and customers simultaneously. They negotiate prices, quality, guarantee and other related matters with the manufacturers and transfer the benefits to customers to increase sales and customer base.
(g) Risk Taking – In the process of distribution the title of goods transfer from the manufacturer to the distributor who assumes the risk on account price and demand fluctuations, spoilage or any other kind of damage.
(ii) Physical Distribution:
Once the goods are manufactured, packed, branded, priced and promoted, these goods must be available to customers at the right place, at the right time and in right quantity. In case the goods are not available at a place where it is convenient for customers to buy then it may force customers to buy alternative product and thus lead to loss of sale. Thus, it is an important responsibility of a marketer to ensure that products are physically available at places convenient to existing or potential customers.
Physical distribution is an element of marketing mix which refers to the physical handling and movement of goods from the place of production to the place of distribution. The main components of physical distribution are transportation, warehousing, material handling and inventory control.
The main components of physical distribution are:
(a) Order Processing:
The buyer-seller relationship starts with placement of order by the seller. A good physical distribution is the one which provides for an accurate and speedy processing of orders. To develop good relationship with customers, maintain company image and have repeated orders, it is a must that company executes orders without any delay and ensures delivery of goods with right specifications and right quantity.
Customers can buy goods only if they are available at places convenient to them. Therefore, transportation is one of the most important elements of physical distribution of goods. It is the transportation which carries goods from the point of production to point of sale. A firm may use road, air or railways as transportation mode depending on the cost, speed, frequency, availability etc. A firm must use the transportation which is most cost effective and adds to the value of product.
Warehousing a component of physical distribution provides for storing, assorting, grading etc. of products to create time utility in them. Warehousing eliminates the hindrance of ‘Time’ as it facilitates firms to store their products nearest to the target markets and serve their customers minimising the difference between production and consumption time. Larger the number of warehouses a firm maintains lesser is the time taken to deliver goods to target customers but it does involve cost. Therefore, the decision to maintain warehouses depends on the cost of warehousing and their value addition to the product. A company producing products which may require long-term storage may have warehouses located near to point of production but for bulky products or perishable goods warehouses near to target market is preferable.
(d) Inventory Control:
Inventory control refers to the decision of maintaining the level of inventory. Inventory level depends on expected demand and the cost of carrying the inventory. Higher the level of inventory, higher will be the level of service to customers but at the same time it will result in high carrying cost due to huge amount of capital being tied up in the form of stocks. The appropriate stock levels may be maintained if factors affecting inventory level are considered carefully. The advancement in information technology has developed the concept of ‘Just-In-Time’ which helps firms to maintain the required stock levels.
Level of inventory depends on prediction of future demand. A nearly accurate prediction helps to maintain the minimum required stock and thus brings down the carrying cost, controls the cash flows and maintains consistent production levels.
The various factors affecting the demand predictions and the decision to maintain the level of inventory are as follows:
(a) Firm’s policy regarding the level of customer service to be offered- Higher the level of service, higher would be the requirement to maintain stock levels.
(b) Degree of accuracy of demand forecast- Higher the accuracy lesser is the need to maintain high stock levels.
(c) Responsiveness of the distribution system towards the additional demand- Longer the time taken to meet additional demand, higher is the level of stock to be maintained.
(d) Carrying cost of inventory which includes manufacturing or buying cost, warehousing, transporting etc- Higher the cost lesser would be the level of inventory maintained.
4. Promotion – (4th ‘P’):
Promotion is a technique to create awareness amongst the potential consumers about the product and convince them that the utilities and benefits of the product would satisfy their needs and wants.
A company may produce excellent quality product at most competitive prices and make it available at all strategic points of sale but if it fails to communicate with its target customers, the product may not sell well in the market.
Thus, through ‘promotion’ companies aim to achieve twin objective:
(i) Inform potential customers about the product and
(ii) Persuade them to purchase the product.
Promotion is an important element of marketing mix in which marketers use various communication tools to encourage exchange of goods and services in the market.
Elements of Marketing Mix – With Strategies and Objectives
Product is the main element of marketing. Marketing is not possible without a product. “A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need”, says Philip Kotler. According to Alderson, “Product is a bundle of utilities, consisting of various products”
Like human beings, even a product has a certain life cycle which is divided into four stages-Introduction, Growth, Maturity and Decline. A marketer should be smart enough to provide the best marketing mix that suits the life cycle stage of the product.
Product strategy determines the direction of your product efforts like – What will be the future of the product? How will it benefit others? Will it be similar to its competitor’s product or different? How will this product reach the customer? How will the customer be drawn to the product?
Will it achieve the Company’s objective? In simple words, product strategy creates a roadmap through which, a product meets objectives of the company.
Successful product strategy should be based on market and needs, key features and differentiators and business goals.
Pricing is one of the important elements of the marketing mix, which refers to the amount of money the customer needs to pay to buy a product. It is the only element that produces turnover for the seller. It involves capturing or “harvesting” the value created by the other elements of the marketing mix such as product, place and promotion. It is an outcome of the research on different segments, ability of the customer to pay, market conditions, actions of the competitor and total cost incurred.
Price being one of the P’s in the marketing mix, a handful of marketers use it as a marketing tool. Most marketers have a passive approach which leads them to commit mistakes in pricing their products. Some of the mistakes might include price being too cost-oriented, price not being revised according to the market situation, making price independent of other Ps in the marketing mix.
Thus, price is a value that will purchase a finite quantity, weight, or other measure of good or service.
It is determined by three factors:
(i) A buyer willing to pay.
(ii) A seller willing to accept.
(iii) Pricing by Competitors.
Place, an element of marketing mix, deals with the channels through which raw products are converted to finished goods and then transported to the customers. It involves various intermediaries like distributors, wholesalers and retailers and even the Internet.
It is important to place the right product at the right place to generate revenues and increase profits for the company. It also helps in learning the changes in customer thinking, styles, fashion and needs.
‘Place’ in the marketing mix is the bridge that connects the manufacturer with the customer. It includes all those elements that help in getting the products from the manufacturer’s place to the customer’s place. It starts from the supplier’s supplier and ends with the final consumer.
It is necessary to create awareness of the product and service a company is providing to the customers. This need of awareness comes under the fourth element of marketing mix, promotion. Promotion is the art and science of communicating to the customers, about the product, brand or service to. Only when the benefits of the product are be conveyed to the customer, sales and profits would be generated for the company. This can be easily done by promoting the product effectively.
i. Creates awareness about products and services
ii. Builds brand and company image
iii. Connects the brand and company with consumers
iv. Reminds consumers about the products, services, brands in the market
v. Creates a competitive environment
vi. Persuades consumers towards products and services
vii. Provides customers with discounts offers etc.
viii. Reinforces the brand image in the minds of consumers
ix. Helps the company to survive in a competitive market
x. Builds trust and loyalty in the minds of consumers
xi. Strengthens the relationship between consumers and the organization
Elements of Marketing Mix – 4 Major Ingredients: Product, Price, Place and Promotion
The four major ingredients of the marketing mix are described as follows:
A product is any good or service that consumers want. It is a bundle of utilities or a cluster of tangible and intangible attributes. It involves planning, developing and producing the right type of products and services. It deals with the dimension of product line, durability and other qualities. Product policy of a firm also deals with proper branding, right packaging, appropriate colour and other product features.
Pricing decisions and policies have a direct influence on sales volume and profits of the business. In practice, it is very difficult to fix the right price. Right price can be determined through pricing research and test marketing. Demand, cost, competition, government regulations, etc., are the vital factors that must be taken into consideration in the determination of price. Price mix involves decisions regarding base price, discounts, allowances, freight payment, credit, etc.
This element of the marketing mix involves choice of the place where products are to be displayed and made available to the consumers. It is concerned with decisions relating to the channels of distribution.
A manufacturer may distribute his goods through his own outlets or he may employ wholesalers and retailers for this purpose. Irrespective of the channel used, management should continuously evaluate channel performance and make changes whenever performance falls short of expected targets. Management must develop a physical distribution system for handling and transporting the goods through the selected channels.
Promotion component of the marketing mix is concerned with bringing products to the knowledge of customers and persuading them to buy. It involves decisions with respect to advertising, personal selling and sales promotion.
All these techniques help to promote the sale of products and fight competition in the market. No single method of promotion is alone effective and therefore a promotional campaign involves a combination of two or more promotional methods.
There is no one ideal promotional mix that fits all situations. While devising a promotional mix, nature of the product, type of customers, promotion budget and the stage of demand should be taken into consideration.
Elements of Marketing Mix – With Additional P’s of Marketing
Marketing mix is known as the Four P’s of marketing, the marketing mix components are price, place, product, and promotion.
A product is viewed as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry, the hotel industry and the financial industry. Tangible products are those that have an independent physical existence. Typical examples of mass-produced, tangible objects are the refrigerators and the CFL bulbs. A less obvious but ubiquitous mass-produced service is a computer operating system.
Every product passes through a product life cycle, which starts with introduction phase of the product, then moves on to the growth phase, followed by maturity phase. Lastly, the product faces the decline phase. In fact it is often compared with human life cycle such as birth, childhood, adulthood and death.
Keeping in view the life cycle – The marketer must also consider the product mix by expanding the current product mix. It can be done by increasing a certain product line’s depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company’s resources and how to configure the product mix so that each product complements the other.
The product development strategies must also be considered. The Product area is concerned with developing the right “product” for the target market. This offering may involve a physical good, a service, or a blend of both. Product is not limited to “physical good”.
Place refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. Various strategies such as intensive distribution, selective distribution, exclusive distribution, and franchising can be used by the marketer to complement the other aspects of the marketing mix.
Place is concerned with all the decisions involved in getting the “right” product to the target market Place. A product isn’t much good to a customer if it isn’t available when and where it’s wanted. A product reaches customers through a channel of distribution.
It represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as – advertising, public relations, personal selling, and sales promotion.
Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events.
Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations. Promotion is concerned with telling the target market about the “right” product. Promotion includes personal selling, mass selling, and sales promotion and advertising.
The price is the amount a customer pays for the product. Price is very important, as it determines the company’s profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well.
The marketer should set a price that complements the other elements of the marketing mix. While deciding upon the price of the product, the customer’s perceived value for the product must be kept in mind.
Three basic pricing strategies are:
i. Market skimming pricing,
ii. Market penetration,
iii. Neutral pricing.
The ‘reference value’, where the consumer compares the price with competitors’ product and the ‘differential value’, where the consumer view of this product’s attributes with the attributes of other products must be taken into account. In addition to developing the right Product, Place, and Promotion, marketing managers must also decide the right Price.
In setting a price, they must consider the kind of competition in the target market – and the cost of the whole marketing mix. They must also try to estimate customer reaction to possible prices.
Three more P[s] have been added to the existing list of marketing mix which has four components, making them to 7 Ps of marketing mix. These additional Ps of marketing include physical evidence, people and process.
These are being discussed, in brief, below:
1. Physical Evidence – this refers to the decor or ambience of the store and even the uniform of the staff as well. Many private Hospitals are also indulging in marketing strategies by disregarding the traditional uniform of the nursing staff and even making the rooms more happy looking.
2. People – people refer to the employees of the company and their capability and calibre in dealing with the customers, clients, outsiders, dealers etc.
3. Process – this refers to various systems and sub-systems prevailing in the marketer.
Elements of Marketing Mix – To be Considered by the Manufacturer
In marketing planning, we use marketing information to assess the situation, where we have to select specific targets in the form of market segments. For each segment or sub-division of the market, we formulate a number of combinations or devices or policies that are coordinated into a single marketing programme to reach a particular target or market segment. The combination, so made of these marketing methods or devices, is known as the marketing mix.
Marketing mix is composed of product, price, place and promotion.
In view of what has been discussed above, we can state that marketing is a system of integrated business activities designed to develop strategic plans (in the form of marketing mix) leading to the satisfaction of customers’ wants of selected market segments.
According to Philip Kotler, “the marketing concept is customer-oriented, backed by integrated marketing, aimed at generating customers’ satisfaction as the key to satisfying organizational goals.”
The following are the elements of the marketing mix which the manufacturers should consider:
i. Product Planning – Policies and procedures relating to product lines to be offered – quality, design, the market to sell, whom, where, when and in what quantity.
ii. Pricing – Policies and procedures relating to a the level of prices to adopt, the specific prices to adopt, use of list prices, and the margins to adopt for company and for the trade.
iii. Branding – Policies and procedures relating to selection of trademarks, individualized or family brand, sale under private brand or unbranded.
iv. Channels of distribution – Policies and procedures relating to the Channels to use between plant and consumer, the degree or selectivity among wholesalers and retailers.
v. Personal selling – Policies and procedures relating to the burden to be placed on personal selling and the methods to be employed in the manufacture’s organization, the wholesale segment of the trade, and the retail segment of the trade.
vi. Advertising – Policies and procedures relating to the amount to spend, the copy to adopt, product image desired, and corporate image desired.
vii. Promotions – Policies and procedures relating to the burden to place on special selling plans, the form of devices for consumer promotion and for trade promotions.
ix. Servicing – Providing pre-sale and after-sale service needed.
x. Physical handling/Fact finding and analysis – Warehousing, Transportation, Inventories/use of facts in marketing operations.