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Definition: Marketing Mix
Marketing Mix is a tool which a marketer uses to formulate a product/service offer for customers. Marketing mix is done using the 4Ps of marketing - Product, Place, Price, Promotion and 7Ps in case of service- Physical Evidence, People, Process. The term Marketing Mix is attributed to Neil Bordon. The term is named marketing mix because it suggest how a marketer mixes various elements (Product, Price, Place, Promotion etc) in order to make a relevant/just right offering to the customer. The main objective of marketing mix strategy is to make the right product at correct price at the right place with right promotion.
This strategy has been one of the popular marketing topics in business. Let us talk more about the various elements in the marketing mix. There are two types of marketing mix-Product and Service.
Product Marketing Mix
When a company is offering products or goods, it comes under the purview of the product marketing mix. It talks about the product strategies, pricing strategies, place where the products are distributed and promotional strategies. Elements of a product marketing mix can be explained in detail as below:
1) Product : It is the main part of the offering, the product itself. It is most important aspect of the mix. Product is something which has some functional value and can be used by the customer to achieve something. A marketer needs to define his product very carefully thinking about its value, its USP, features, competition etc
2) Price : Pricing the second most important element in our marketing mix. This is value we will get in exchange for our product. This is what the customer will pay in return for the utility of the product. Pricing is mainly determined by the cost of the product and also how much the customer would be willing to pay. If we price it too high no one buys, if we price it too low, company makes losses. So we have to devise the right pricing strategy to make our marketing mix perfect.
3) Place: Also called the Distribution. If we are making a product as the right price, that is not enough, we need to make it available at the right place too. The customer mostly would not come to you until and unless our product and price is unbeatable. The product needs to be where customer is likely to buy. If we are soft drink manufacturer and the product is not available in grocery stores, supermarkets, restaurants etc then the first two elements of marketing mix are of no use and the offering fails.
4) Promotion : Also referred to as Communication about the product. This is the 4th element in marketing mix which means the communication done about the product to the customer. Advertising on TV, print and digital media would come under promotion.
Thus, the 4Ps or marketing mix is valid for every company, whether it is a product or a service company
The above image shows the 4Ps of the marketing mix
Service Marketing Mix
In case of a service brand like a restaurant, telecom service, hospitality etc, there are additional points apart from the 4Ps. The additional Ps i.e. physical evidence, people and processes are collectively known as the service marketing mix. These can be described as below:
5) Physical Evidence : A service is intangible but there has to be a reassurance to the customer that service happened. It can be a receipt of a service or may be an invoice. Physical evidence should be positive meaning that customer should be assured that service completed as expected.
6) People : These are the employees which help deliver the service e.g. delivery boy or a cab driver. They may become the face of the service hence are very important that is why very important to chose right people.
7) Process : The steps undertaken for completion/delivery of the service. The process is very crucial. The process should not only consist of the positive path but should also should consider the negative paths to address issues in the service delivery. e.g. Complain management, reverse supply chain etc
All these help in understand the marketing mix for a service based business
There is an alternative theory of 4 C's (Commodity, Cost, Communication, Channel) also which also is similar to 4 Ps.
Importance of Marketing Mix
Marketing Mix is one of the most important marketing strategy used by companies. Marketing Mix is one of the first steps in the strategy. It lets companies decide on their formula for the four parameters-Product, Price, Place, Promotion. A marketer can use these four to adjust the product offering. Marketing mix along with other marketing techniques like segmentation, targeting, positioning, planning, research can lead to a successful marketing proposition.
Example of Marketing Mix
ABC ltd wants to launch a new Burger in menu. So as first element of marketing mix is product, we should be sure about the burger. The ingredients-bun,patty,vegetables,other elements like cheese and sauces should be well researched and thought upon. Once the approved burger is ready, we need to think about the Price as per the marketing mix. If ABC already has burgers in the menu, they can use comparative pricing along with the cost incurred to make a burger. They cannot afford to lose customers on the price.
In case of ABC, place can be the factory owned restaurants and franchise partners.
Being a fast food vendor, promotion becomes very important here. Promotions can be done through advertising on TV, radio, internet etc. Also in restaurants branding which would inform existing customers about the new product offering in the restaurants. Offers, promotional gifts can be included on every purchase of the new burger.
So Marketing Mix in simple terms is a tool which can be used to mix various elements in right proportions to make the best possible Product/Service Offering.