Marketing Mix Basics
Marketing Mix Basics.
The marketing mix has been compared to your recipe for a great meal – but in reality the marketing mix is much more than simply the recipe. It is the multitude of parts that go in to that great meal, starting with the planning ahead of time (marketing strategy), choosing the location and atmosphere (place). Then there is the meal itself, the choice of main dish and side dishes to be served, and even the wine to be served (product & features). Then another factor is the cost of the meal, not only the cost of the food, but also of the time to prepare it, and the time to eat it (price). Finally a great meal is built up with anticipation – communicated to the attendees beforehand so that they are prepared, arrive on time, with ready appetites ready to enjoy the meal (promotion).
Finally one thing makes a good meal great. And that is the people you share it with. Whether it be good friends out at a nice restaurant, family at the dinner table at the holidays, or a special meal with the one you love – the relationship with the people makes all the difference!
The marketing mix is made up from the four P’s – the factors that a marketer has under their control. They must properly use all of these – product, price, place and promotion – to increase sales, maximize profits and build business equity.
Product
The basic product starts with a customer and at its very basic sense is built around a customer need. That need can be stated up front by the customer – but more often there are unstated needs below the surface, secret needs that the good marketer must strive to uncover.
Many simple products are built around the lower-order physiological needs for food water and sustenance. Others are about social and safety needs so that the individual feels secure, loved and a sense of belonging. But many products have at their root the higher order needs. The esteem needs for respect, prestige, recognition and personal sense of mastery. And the self-actualization needs at the highest level are about personal desires to grow, feel satisfied and be creative (Schermerhorn & Hunt & Osborn, 2009, p112). In fact the products which fulfill the higher order needs are what customers value the most.
A variety of products are a combination of these needs, starting out as a simple product satisfying a lower order need, but then built around that are features, benefits and even marketing to build that product towards satisfying higher order needs. This can involve style, packaging and definitely branding.
Price
Small business owners and marketers have so many options in their use of price – unfortunately this often turns them into lazy marketers. Price as Kotler and Keller (2009) state “is the one marketing-mix element that produces revenue” (p. 210). Incorrectly used price can also lower possible revenue by imposing an opportunity cost. A business is giving up the extra revenue when offering a sale price in exchange for the increase in number of items sold, or possibly the increase in number of customers. By choosing to give up revenue (for customers or more sales) the business is incurring an opportunity cost (Heyne, Boettke & Prychitko, 2009 p.31).
As Kotler and Keller (2009) go on to state there are many promotional pricing techniques that a company can use including loss-leader pricing, cash rebates, various payment terms and financing as well as discounting (both real and psychological). (p.222-223) As price is such a flexible element in the marketing mix it is often the one marketers turn to first.
Place
Place is more than simply where business takes place. It is all the logistics that allow business to operate and the distribution channels that allow the products or services to move from origin to final destination. Although not as glamorous as other marketing mix elements, logistics and distribution are essential pieces of the marketing mix process. In fact in the last 10 years the improvements in not only physical product flow, but also the flow of information has allowed significant reductions in cost and is one of the main drivers to the retail environment that we now operate in. Less warehousing, just-in-time delivery and efficient order processing (and prediction) allows store shelves to be filled effectively by products from all over the world (Longenecker, Donlevy, Calvert, Moore & Petty, 2003, p202-212).
Promotion
Communication is at the heart of marketing – and promotion deals with communicating the value the company offers to its customers. Two factors are critical to communication – message and medium. You must have a consistent message delivered over the right medium to get to your target market effectively
Promotion is the fun part of marketing – where creative ideas take shape and memorable and meaningful strategies come to life. Marketers have their choice of using any one of the key marketing elements including advertising, personal selling, public relations, sales promotion, direct marketing or e-marketing. The most effective marketing campaigns are when multiple elements are incorporated into the marketing strategy to provide an integrated communications mix. The synergy created by multiple elements working together is much greater than any one element can communicate on its own.
