Marketing Mix I SS1 Marketing Lesson Note

MEANING OF MARKETING MIX

“Marketing mix” is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The marketing mix is often synonymous with the four Ps: price, product, promotion and place.

It simply means putting the right product in the right place, at the right price, at the right time.

To create the right marketing mix, businesses have to meet the following conditions:

1. The product has to have the right features. For example, it must look good and work well.
2. The price must be right. Consumers will need to buy in large numbers to produce a healthy profit.
3. The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation.
4. The target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output.

FOUR P’s OF MARKETING

The major marketing management decisions can be classified into one of the following four categories:

1. Product
2. Price
3. Place (distribution)
4. Promotion

These variables are known as the 4 P’s of marketing. They are the variables that marketing managers can control to best satisfy customers in the target market.

1. Product: As the product is the item being sold to the customer, the thing that will bring in money, its features and design need careful consideration. Whether the firm is manufacturing the product or purchasing the product for resale, it needs to determine what product features will appeal to its target market.

The product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not the responsibility of the marketing function. However, it is concerned with what the product means to the customer.

Marketing therefore plays a key role in determining such aspects as:

• The appearance of the product line with the requirements of the market.
• The function of the product products must address the needs of customers as identified through market research.

2. The Price: The price is the amount a customer pays for the product. The 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.

When setting a price, the marketer must be aware of the customer’s perceived value for the product.

Three basic pricing strategies are market skimming pricing, market penetration pricing and neutral pricing. The ‘reference value’ (where the consumer refers to the prices of competing products) and the ‘differential value’ (the consumer’s view of this product’s attributes versus the attributes of other products) must be taken into account.

3. The Place: ‘Place’ is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It may be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers.
4. Promotion: Promotion is the business of communicating with customers. It will provide information that will assist them in deciding to purchase a product or service. The promotion comprises elements such as advertising, public relations, personal selling and sales promotion.