Marketing mix is a term which is used for the combination of variables which helps the firm in creating a market offering and helps in distribution in the market. it means a combination of the product, determining price of that product, deciding some promotional activities and selecting a distribution channel for the same. These are popularly known as the product, price, place and promotion or the 4 P’s of marketing mix.
Marketing mix is thus the process in which the potential customers and target market will be identified. The needs and wants of these customers will be analysed properly by doing research. Then a potential mix of the product, price, place and promotion will be decided so that each can reinforce other. Then proper testing will be done on selected customers so that reaction can be understood and changes can be made before making the final launch of the product in the market.
Elements of marketing mix
Let us understand these elements in greater detail:
Product means something of value. It can be a product or a service and it is offered for an exchange. Such as, pen, pencil, sharpener, eraser, books, toothpaste, toothbrush, soap, hand wash liquid, mobile, television, chair, table, laptop, pressure cooker etc are the products while spa, watching a movie in theatre, consultation from a doctor are all examples of services.
The product is a concept that not only caters to the physical form of product but also the after sales services and solving the queries of the customers etc. These aspects are very important from marketing point of view. There are various important decisions that are to be taken for a product before launching it in the market. Such as what will be its brand name, will it be sold under the generic name, what kind of packaging should be done, what label should be put over it etc. These decisions are very important while preparing a market offering because it will help the customers to find the product easily, create a brand loyalty and goodwill for the organization. It also includes the decisions regarding the design and development of the product so that it is easy to use i.e. customer friendly along with an attractive and eye catching design.
Thus the elements under the product mix are as under:
- New product or same product
- Product quality
- Product quantity
- Design and development
- Product range
- Grading and standardization
- After sales services
Price is the amount which will be paid by the customers in order to get the product. There are various factors which affect the price of the offering. These factors can be the cost of the product, profit expectations, its demand in the market. Government rules and regulations are also an important factor to determine the price. Price is important for the product in order to be affordable to the customers if it is consumer product or industrial products while high prices are also important if it is a speciality product which a consumer buys for the sake of showpiece or for brand loyalty etc.
Under price there are various elements such as:
- Level of price
- Change in price
- Pricing strategies
- Pricing policies
- Profit margins
- Cash and credit sales
Place is also an important element of marketing mix. Place that is also known as physical distribution. Under this, place where the product will be put for sale is decided i.e. target market. These are the decisions which will help the firm in making the product available to the market. These decisions are regarding the channel of distribution that will be selected i.e. direct or indirect channel. The direct channel is the direct connection between the producer and consumer while the indirect channels include the intermediaries. It can be retailers, wholesalers or other intermediaries. Other important decisions regarding physical distribution of the product or service are management of inventory, storage, warehousing and transportation of goods from one place to the place where it is easy for the customers to buy.
Thus the elements under the place element of marketing mix are:
- Selection of channel
- Strategy for channel
- Cost of channel
- Competitive factors
- Environmental factors
Promotion of the product or service is an equally important element as the making of the product or service. Promotion of the product or service helps in creation of demand and helps in attracting customers towards the product or service by depicting the positive side of the product or service. Many organizations spend substantial amount of money on promotion of the offering. These activities can be advertising in newspaper, radio, television, hoardings, banners etc, it can also be in the form of publicity, sales promotion, public selling, collaboration with various other related top brands so that product can reach maximum number of people.
Elements under the promotion are as under:
- Sales promotion
- Public relation
- Personal selling
- Cost of promotion
The success of the product largely depends on these elements. Not just single element but all the elements equally. It creates a superior value of the offering made to the public. It helps in achieving the goals of the organization i.e. profit making along with serving the society.