Marketing mix Totally Explained

Everything about The Marketing Mix totally explained

The marketing mix is generally accepted as the use and specification of the four Ps describing the strategic position of a product in the marketplace. One version of the origins of the marketing mix starts in 1948 when James Culliton said that a marketing decision should be a result of something similar to a recipe. This version continued 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 classification in 1960, which would see wide popularity. The four Ps concept is explained in most marketing textbooks and classes.

Definition

Although some marketers have added other Ps, such as personnel and packaging, the fundamental dogma of marketing typically identifies the four Ps of the marketing mix as referring to:

Product - An object or a service that's mass produced or manufactured on a large scale with a specific volume of units. A typical example of a mass produced service is the hotel industry. A less obvious but ubiquitous mass produced service is a computer operating system. Typical examples of a mass produced objects are the motor car and the disposable razor.
Price – The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product.
Place – Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet.
Promotion – Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements - advertising, public relations, word of mouth and point of sale. A certain amount of crossover occurs when promotion uses the four principle elements together, which is common in film promotion. Advertising covers any communication that's paid for, from television and cinema commercials, radio and Internet adverts through print media and billboards. One of the most notable means of promotion today is the Promotional Product, as in useful items distributed to targeted audiences with no obligation attached. This category has grown each year for the past decade while most other forms have suffered. It is the only form of advertising that targets all five senses and has the recipient thanking the giver. Public relations are where the communication isn't 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 (see Product above).

Broadly defined, optimizing the marketing mix is the primary responsibility of marketing. By offering the product with the right combination of the four Ps marketers can improve their results and marketing effectiveness. Making small changes in the marketing mix is typically considered to be a tactical change. Making large changes in any of the four Ps can be considered strategic. For example, a large change in the price, say from $129.00 to $39.00 would be considered a strategic change in the position of the product. However a change of $131 to $130.99 would be considered a tactical change, potentially related to a promotional offer.
The “Marketing Strategy” is decisions that determine how to achieve marketing’s goal (build and maintain a preference for a company and its products) in a particular target market, through the selection and application of marketing mixes. The “Marketing Mix”, originally known as “The Four Ps”, is a combination of product, price, place [distribution], and promotion activities that are applied to a particular target market. The general idea is to combine (mix) the variables to generate an optimal, positive, and desired response in the target market. Diverse and numerous combinations of marketing methods, modes, and techniques can be selected and applied to create a marketing mix. The marketing strategy is mostly determined by roles (who focus on the promotion element of the marketing mix) in the marketing communications department with contributions from other corporate departments, notably the product marketing department.

Criticisms

Peter Doyle claims that the marketing mix approach leads to unprofitable decisions because it isn't grounded in financial objectives such as increasing shareholder value. According to Doyle it has never been clear what criteria to use in determining an optimum marketing mix. Objectives such as providing solutions for customers at low cost have not generated adequate profit margins. Doyle claims that developing marketing based objectives while ignoring profitability has resulted in the dot-com crash and the Japanese economic collapse. He also claims that pursuing a ROI approach while ignoring marketing objectives is just as problematic. He argues that a net present value approach maximizing shareholder value provides a "rational framework" for managing the marketing mix.
Some people claim the four Ps are too strongly oriented towards consumer markets and don't offer an appropriate model for industrial product marketing. Others claim it has too strong of a product market perspective and isn't appropriate for the marketing of services.
An expanded system based on Seven Ps stresses the importance of Place, Product, Price, Promotion, People, Process, and Physical evidence

Further Information

Get more info on 'Marketing Mix'.

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