When you talk about Marketing Mix. You might think that it’s something which is too traditional, as compared to today’s marketing techniques. And the concepts entire existence is because Business Grads usually study it, just for the sake of completing their course syllabus.
But these marketing techniques, even conceptualised many years before, have still maintained its relevance in the marketing industry. Even though you might know nothing about the concept, but still you might me using it unknowingly.
Whether you use it or not, but understanding marketing mix is surely going to make your marketing efforts more pertinent and will help in strategising your marketing spends more efficiently.
Let’s dig a little deeper into the concept and decide for yourself whether understanding this concept will help in elevating your marketing planning or not.
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Definition of the marketing mix
These days we hear this phrase a lot. Do you know who introduced this term?
His name is James Culliton around 1948. He said-
“A marketing executive, a “mixer of ingredients,” one who is constantly engaged in fashioning creatively a mix of marketing procedures and policies in his efforts to produce a profitable enterprise.”
Along with James Culliton, his contemporary, Prof. Neil Borden also used the term extensively.
By the definition, it is a mixture of several ideas and plans followed by a marketing representative to promote a particular product or brand is called marketing mix.
In simple words, several ideas and strategies get combined to make a brand popular.
What marketing mix refers to?
The concept was proposed when traditional means of marketing were prevalent.
That means promotion of the product or services offline.
Using print media, broadcast channels, telemarketing and direct mailers were the ways to carry out the promotion.
Open economy, globalization has brought tons of opportunities and significant changes with them.
It is thus natural that even business organizations change their mindset and strategies to stay relevant in the field and ahead of the competition.
We can say that the primary objective of the marketing mix concept is to make the right product, have correct pricing, target relevant people at an opportune time.
Promotion depends on the type of industry. Accordingly, to which, managers or decision-makers of an organization approach their targets.
According to marketing Prof. Philip Kotler, “Marketing Mix is the set of controllable variables that the firm can use to influence the buyer’s response.”
We use several elements to formulate the offerings and develop an appropriate strategy.
Elements of the marketing mix
The variables that Prof Kotler talked about are nothing but the four core elements of the marketing mix.
They are first proposed as 4Ps of marketing mix, by Prof James McCarthy, in his book Basic Marketing: A Managerial Approach.
These four are mixed in such a way that the product creates the highest level of satisfaction among customers and meets its organizational aim.
Let us understand each one of them.
Product
A product is considered as the most important part of the mix.
According to Jerome McCarthy, “A product is more than just a physical product with its related functional and aesthetic features. It includes accessories, installation, instructions on use, the package, perhaps a brand name, which fulfils some psychological needs and the assurances that service facilities will be available to meet the customer needs after the purchase”
There are two types of products.
Tangible – Products that we can touch and feel like a mobile, a shirt, or a pen.
Intangible – Products which we cannot touch but can only experience – Services
Can you tell me, when we buy an umbrella, do we pay the price for the tangible product (an umbrella) to the manufacturers, or do we pay the price for its usefulness?
That’s right, it is the usefulness, saving us from rain and scorching sun.
That is exactly the idea behind offering a product or a service. It needs to create value in the minds of the customers, otherwise they will not buy the product, or pay the price we ask for.
Similarly, if I am a telecom service provider like Verizon. When my users are not satisfied with the service, we can often hear them say, “my experience was bad with them”
Developing a product (tangible or intangible) largely depends on demand. Because, unless we have a demand, it will not sell.
Today there is no such demand for a bulky CRT television set, which once was considered luxury. Definitely, it will be a bad product to manufacture and sell them.
Contrary to this, there is a great demand for ultra-high-definition, Artificial Intelligence (AI) enabled, voice-controlled, smart television sets. That would be a great product to sell.
However, this customer satisfaction mindset changes when the service provider or product manufacturer has no competitor. It is a Monopoly state. To a great extent, Facebook behaves the same way and has faced backlash too, for using personal data without consent.
Suppliers demand a price according to their wishes, not caring about customer satisfaction.
Another situation is where only a few are supplying the product and no competitor otherwise. The Oil-producing countries. An Oligopoly state. Though they are countries and not companies but the item, they are dealing in works the same way.
So, developing a product according to the market needs is crucial for any organization.
Another aspect of product development is when you have a great idea to create a unique product.
In this situation, it is the organization’s responsibility to make customers understand the benefits. Let them know “why it is good for them?”
For example, text messages. SMS vs WhatsApp.
Earlier, people were content with network providers’ messaging services, SMS (Short Messaging Services). But WhatsApp completely changed the way we text nowadays by understanding its many unique offerings.
Price
The amount paid by a buyer is the revenue earned on that product. A very important element of the mix.
That’s why it is vital to be priced appropriately. A company runs on profit.
But how much mark-up amount is justified?
Say, I developed a product worth $100, this is my cost on that product. I add some amount over and above $100 to earn a profit.
Now, how much is that margin be? $5 or $10 or $25?
The answer for this comes from the market itself, by looking at the competitors.
If I am providing a cab service and I charge $5 per mile. Would it be ok when other operators are charging $1 for it? Of course not.
What if I don’t have a competitor?
Great, you have the first-mover advantage then. Remember the iPods from Apple? That’s right!
They were the first to conceive the idea that sold amazingly well.
The pricing of a product can be of two types:
Cost-based price – Where each item, parts, labor, etc. are accounted for. Example – Steel manufacturing.
Value-based price – Where you charge for the value a product created, in the minds of consumers. Example – A Rolls-Royce car. Even a pre-owned old car is beyond the reach of an average person’s pocket.
There is one more type on which price is dependent, known as the “snob appeal” of a product.
Example – Babe Ruth signed baseball or a Rembrandt. How much would they cost?
Actually, there is no price that can be associated with them. The price is just priceless !
Place
The FMCG (Fast Moving Consumer Goods) items like shampoo, body lotion, bathing bar, etc are available in local stores. But luxury items belonging to the same FMCG category are typically available in posh malls.
Place (or placement) of the product in the marketing mix is better understood how the product or service will be distributed.
So, it is our job to let consumers know where can they find my product.
These days, though, we face another sort of challenge. Should we sell in a physical store or online? Or a hybrid channel? What Should it be an exclusive outlet or a supermarket?
The questions are plenty.
The consumers whom I am targeting the product should be analyzed. If they are found more offline than online, in that case, it will not be beneficial to distribute or advertise my products online.
How a product would be accepted by consumers is significant, too.
Some are okay with online delivery, but some are “touch-and-feel” people. They like to see the product in person. For example, bridal dresses.
Another feature is “reach”. How would I like to distribute to far-flung areas?
They are achieved with the help of channel partners, distributors, retailers and the likes.
Promotion
GoldenEye is a very famous James Bond movie. Till this point, the trend in a bond movie is to use Aston Martin cars.
Yet, it was the first Bond movie not to feature that car. Instead, they had used a Z3 by BMW.
Although the Z3 was not released until months after the film had left theatres.
BMW received 9,000 pre-orders for the car.
A masterstroke indeed.
Promotion’s main objective is informing, persuading and influencing a consumer to make the choice of the product to be bought.
Techniques and strategies related to the marketing of the product fall under this.
As the name suggests, it deals with promoting the product or services.
A company would find it useful to have an Instagram campaign or Facebook promotion.
So, the point is, whatever channel has been chosen to promote should be appropriate to that product.
These days, we see a lot of flash sales in different categories of products, which is definitely a part of the promotion.
Marketing experts often choose the promotion technique, which is in sync with the three P’s. we have discussed so far. Keeping in mind the Product, Price and Place.
From 1958 to 1962, there have been 5 design changes to the Grammy. From 1991 to present, the latest is 30% larger than its predecessor in part to be more visible for TV.
According to Prof Kotler, promotion should do the following –
– arouse his interest in the product;
– inform him about its availability; and
– inform him how is it different from others
It is a very common practice that if I am satisfied with a product, I would certainly recommend that to my family and friends. This is known as the “Word Of Mouth” way of promotion. One of the strongest ways of promotion.
On the other hand, if dissatisfied, that company is bound to lose more than one customer.
Importance of marketing mix
Every organization has some product or services to offer.
Also, they set different limits in terms of cost, time, labor, distribution channel, and so on.
Without the right mix of 4Ps, an organization’s overall strategy could be de-railed.
So much so that they can be wiped out of the market.
For example, Nokia was a world leader in mobile devices before the advent of touchscreen technology. The demand increased even more with the spawn of the Android operating system.
However, the company was quite reluctant to adapt to the newer technology. The result?
Nokia, once at the pinnacle, is now no longer even a consideration when we talk about buying a new mobile these days.
They have not changed their product or their strategy on the whole. And when they did, it was already too late. The consumer is the king, respect their requirement.
Examples of Marketing Mix
The spontaneous selfie from Samsung Galaxy Note 3 at the 86th annual Academy Awards comprising big names of the film industry made Note 3 an outright rage.
The product was definitely good, promotion was anyone could ever ask for, the Academy Awards. The device was shown in the hands of Hollywood stars, which, needless to say, was perceived to be a status symbol. No points for guessing. The Note3 sales were through the roof.
Nespresso is famous for its coffee capsules. The company sells directly to the customers, the direct distribution (place). Some companies like M&M, Lindt are into hybrid channel distribution, invest to set up their own stores.
Spotify is a hugely popular software. The product is unique. It uses Artificial Intelligence and Machine Learning algorithm. Provide the users a chance to find the music they like. Several filters and playlists are available according to the mood, genres, etc.
Also, the product is available on a plethora of platforms viz. Android, Apple, Laptop/PCs, and Amazon Firestick or Roku. It also has a free version (promotion) and once you like, you can opt for a subscription too (Price). Overall, it provides a completely new experience.Using marketing mix in business
Using marketing mix in business
For any business, marketing mix is an important area of focus.
It provides the outlook and helps in developing a strategy around the product or service.
Marketing mix also helps in developing a new product because the demand has changed, or technology has progressed.
It, therefore, provides an insight to improve the profitability, as we have seen above in BMW and Samsung Note 3 examples.
Also, we have seen how Spotify benefitted by offering a unique experience to their customers. The same thing with WhatsApp provides an above-par service.
We also have the example of Nokia, which failed to capture the advancement in technology and public demand.
Marketing mix is a powerful strategic tool which used effectively has the power to yield excellent returns.
Conclusion
The marketing mix incorporates the 4Ps which are independent in themselves. In the right proportion, they give a really beneficial outcome to the business.
The benefit comprises profit, sales, customer satisfaction, and customer retention.
One thing needs to be understood is that the strategy is not constant. It requires periodic assessment to check what is going right and what is not. It is a continuous cycle.
To conclude, right marketing mix creates a holistic marketing strategy that favours the organisations and customers both.