Marketing mix

Ouhaj Yassine

The term 'marketing mix' was first used in 1953 when Neil Borden, in his American Marketing Association presidential address, took the recipe idea one step further and coined the term "marketing-mix". A prominent marketer, E. Jerome McCarthy, proposed a 4 P’s classification in 1960, which has seen wide use.

Marketing Mix is a combination of marketing tools that a company uses to satisfy their target customers, and achieving organizational goals. McCarthy classified all these marketing tools under four broad categories:

ProductPricePlacePromotion These four elements are the basic

components of a marketing plan and are collectively called 4 P’s of marketing.

All marketing decision-making can be classified into four strategy elements, sometimes referred to as the marketing mix or the four P’s.

Product: What are the benefits of this product and service to its customers?

Price: Should a price be charged to cover costs only? Should the price allow for a profit?

Place: What can be done to make this product and service more accessible and available?

Promotion: What can be done to increase the visibility of this product and service? What can be done to increase its usage or exposure?

Value Value perceived in perceived in the mind of the mind of the the consumerconsumer

Cover location, Cover location, distribution, distribution, channels and channels and logisticslogistics

Marketing Marketing communicaticommunicationsons

Collection of Collection of features and features and benefits that benefits that provide customer provide customer satisfactionsatisfaction

Product is the actually offering by the company to its targeted customers which also includes value added stuff. Product may be tangible (goods) or intangible (services).

For many a product is simply the tangible, physical entity that they may be buying or selling.

While formulating the marketing strategy, product decisions include:

What to offer? Brand name Packaging Quality Appearance Functionality Accessories Installation After sale services Warranty

Price includes the pricing strategy of the company for its products. How much customer should pay for a product? Pricing strategy is not only related to the profit margins but also helps in finding target customers. Pricing decision also influence the choice of marketing channels.

Price decisions include:

Pricing Strategy (Penetration, Skim, etc) List Price Payment period Discounts Financing Credit terms

Using price as a weapon for rivals is as old as mankind, but it’s risky too. Consumers are often sensitive for price, discounts and additional offers. Another aspect of pricing is that expensive products are considered of good quality.

It not only includes the place where the product is placed,  all those activities performed by the company to ensure the availability of the product tot he targeted customers. Availability of the product at the right place, at the right time and in the right quantity is crucial in placement decisions.

Placement decisions include: Placement Distribution channels Logistics Inventory Order processing Market coverage selection of channel members

There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others.

Promotion includes all communication and selling activities to pursuade future prospects to buy the product. Promotion decisions include:

Advertising Media Types Message Budgets Sales promotion Personal selling Public relations/publicity Direct marketing Sponsorship

The elements of the promotions mix are integrated to form a coherent campaign. As with all forms of communication.

As these costs are huge as compared to product price, So it’s good to perform a break-even analysis before allocating the budget. It helps in determining whether the new customers are worth of promotion cost or not.

Marketing mix (4 P’s) was more useful in early 19’s when production concept was in and physical products were in larger proportion. Today, with latest marketing concepts, marketing environment has become more integrated.

So, in order to extend the usefulness of marketing mix, some authors introduced a fifth P’s and then seven P’s (People, Packaging, Process).

But the foundation of Marketing Mix still stands on the basic 4P’s.

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