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Marketing Mix

What is the Marketing Mix?

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It is a framework which helps to structure the approach to each market.

The mix is a bundle of variables which are offered to the customer. These include the product or service itself (its advantages); its availability (the place where and when it is available, delivered or distributed); its image (the way it is promoted) and, of course, the price which should be charged.

These are some of the ingredients which a marketing manager must mix together when optimising a limited amount of resources.

What is the best mix? A marketing manager has to juggle resources and decide on the best marketing mix. Should money be spent or forfeited on: reduced prices? Improved products? New delivery trucks? Or maybe invest all your money in a high risk TV advertising campaign?

Did you recognise the 4 Ps just there? In 1960 Jerome McCarthey presented the 4 Ps to the world. Since then marketing managers around the world have become familiar with them. Can you recall them?

In addition to the 4 Ps, there are other approaches to the mix. These are explored under 'Different Approaches' subtopic as shown in the title map.

Let's look at each of the 4 Ps briefly.

Product - this means the product's (or service's) quality, the functions, the features and benefits of its design plus packaging, guarantees and level of after-sales service. Choices can be made about any of these aspects.

Price includes recommended prices to end-user customers, distributor's trade prices, cash discounts, bulk discounts, terms of credit.

Place means where and when the customer buys and consumes the product or service. Place is sometimes referred to as the marketing channels, physical distribution, logistics or location.

Promotion means the promotions mix or the communications mix. This mix includes advertising, sales promotions, publicity, direct mail, exhibitions, display, packaging, selling and even word-of-mouth.

The choice of target market affects the mix. Here is Professor Philip Kotler:

"For example, in India you sell one cigarette at a time, not a package. So there is a lot of localisation. The biggest mistake companies make often, is to assume that the way they sell a product in their own country is the way to put it into another country."
Philip Kotler

So the mix must adapt itself to the market.

The 4 Ps, however, is just one approach to the marketing mix. You can explore some other approaches in the subtopic called 'Different Approaches'.

Different Approaches

The 4 Ps is just one approach to the marketing mix. There are many other approaches.

American author, Philip Kotler prefers the 4 Cs. He suggests that the 4 Ps are a seller's mix or sales orientated approach and it therefore should be replaced by the 4 Cs which are more customer orientated, or marketing orientated.

You can probably guess what the 4 Cs stand for.......

  • Product = Customer Benefits
  • Price = Cost to Customer
  • Place = Convenience
  • Promotion = Communications

Going back to the 4 Ps, some feel this approach to the marketing mix misses the most important part of marketing; the centre of the marketing universe is omitted. What do you think is the centre of the marketing universe?

The 5th P is the People: customers and employees. Customers are at the centre of the marketing universe.

Now lets move on to the 7 Ps. Although the 4 Ps can be used for both products and services some feel that the 4 Ps works better for products than it does for services. Perhaps you agree?

American, academics Booms & Bitner felt that the 7 Ps are more appropriate for the service sector such as hotels or transport companies.

Four of the 7 Ps are the same. Product, Price, Place and Promotion; can you guess what the others might be?

People, Process and Physical environment.

Each of these Ps affects what the customer is offered.

People are employees. Process means the production and delivery of the service. Physical Environment means the interior and exterior of the buildings.

In 1961 Albert Frey suggested that all the marketing mix variables could be categorised into just two groups:

The Offering and the Methods and Tools

The Offering consisted of Product, Packaging, Service, Brand and Price, while the Methods and Tools comprised of Distribution Channels, Personal Selling, Advertising and Sales Promotion.

So there are several different ways of categorising the mix. There are also several different ways of mixing the mix. Should advertising be increased, prices slashed, deliveries reduced and products upgraded? Or the other way around? You can explore this in the section called 'Mixing the Mix'.

Mixing the Mix

There is no one, single, perfect marketing mix. Some mixes are, however, better than others. The marketing mix has an infinite amount of combinations or mixes. The 'same' product can have extremely different mixes for different markets around the world.

Ranges of prices, distribution options, product modifications, promotional strategies can all be mixed in different ways. They should however, fit together to consolidate a single desired positioning in a particular market segment.

The mix should not pull in different directions; a high price for low quality goods does not make sense in the long term. Repeat business is important in the world of marketing.

Equally, low quality, discount priced products will find distribution in a luxury up-market store difficult to achieve.

Here is a new product. Market it. Mix the mix.

A friend's mother has developed a watch which has a videophone and magnifying glass for viewing. A combination of miniaturisation and micro chips means the video watch can be produced for as little as 2.00 per unit. She has asked you to help her to draw up an outline marketing mix. Consider two different mixes. What would you do?

The first question to ask would be: 'what is the market?' What benefits does this product deliver? Who might enjoy these benefits?

Next, considering various segments and possible target markets would also help. And a clear view on the positioning also helps.

An understanding of what resources the company has would be vital.

One option would be to recommend a retail price for the video phone watch at 1,000. This could be distributed through luxury stores like Harrods or Neiman and Marcus, promoting it with elaborate in-store displays (merchandising) supported with a limited mail shot and PR campaign.

Now consider another option. This time change the marketing mix radically. Reduce the price and sell in packs of two through discount warehouses supported by a national TV advertising campaign.

Each ingredient in the mix can vary enormously. For example, the watch can be made out of plastic or platinum. It can have a lifetime guarantee or become a disposable product.

It can have lots of extras such as diamond studded leather straps, silk wrapping, guarantees and so on. On the other hand, it can have no added costs and no added extras - just the basic video watch.

These are decisions which the marketing manager has to make after careful analysis of the situation, the market, its needs, its sectors, the ideal positioning, the resources within the company.

So is there a single, perfect marketing mix? No, but some mixes are obviously better than others.

Finally, some countries require different mixes. Some segments require different mixes within the same country. The mix can change according to market requirements which in themselves change over time. The ever-changing mix is discussed in a separate subtopic.

The Ever Changing Mix

An excellent marketing mix in one period may not be as effective in another period. The marketing mix changes over time. Partly because markets change, new sectors evolve, trends develop, attitudes change, different ideal positionings emerge, technology moves on, new products arrive, different distribution channels appear.

Just look at the personal computer, or PC, market. Today's PCs are better products, have much lower prices and different methods of distribution compared with ten years ago. Today, thousands of people buy PCs through mail order. Ten years ago this would never have been the case.

The Marketing Mix has to change to meet new market conditions.

Here is an example of how different elements of the marketing mix dominated the retail petrol market in the UK over a period of time.

In the early 1960s Product Performance - miles per gallon, reliability were very important. Then the marketing emphasis switched to promotions with the Green Shield Stamps war in the late 1960s. Physical distribution and sourcing of supplies became vital during the first oil crisis in 1973.

This was followed by a price war in 1974, which was in turn followed by supply and distribution problems during the second oil crisis in 1979. The early '80s saw location and design of new retail sites as the key to competitive advantage.

This was followed by the mid 1980s sales promotions war as petrol retailers competed to give away instant gifts, tokens, scratch cards. These sales promotions were supported by large advertising budgets. So now the advertising promoted the sales promotions rather than the product itself. Some advertising campaigns even advertised the fact that their competitors had inferior sales promotions. The marketing mix can change over time.

It can also change over distance.

This is particularly true in international markets where certain approaches to advertising and promotions are acceptable in some countries but not in others; or where the distribution network is restricted; or where the price structure is totally different.

The optimum mix is influenced by the company's long term policy on repeat sales, its positioning strategy, the target market selection, the firm's resources, levels of competition and the ability, or willingness, to change the mix according to a particular market's requirements.

The ideal mix should support the ideal positioning in the most attractive target markets.

Product and the Marketing Mix

Over a hundred years ago Ralph Waldo Emerson suggested that "If a man can write a better book, preach a better sermon, or make a better mousetrap than his neighbour, though he builds his house in the woods the world will make a beaten path to his door."

This is certainly not true today. Many excellent products fail because no one knows about them, or they are wrongly positioned, or they're not available when people want them, or they're too expensive for the chosen target market.

Other excellent products fail because a competitor's lower priced and inferior product is widely available before you even get to launch your product on the market place. Going back to the Emerson's better mousetrap, ironically the best product is not always the best option. For example, the product might be so good that it costs too much to produce and therefore the best product might just put you out of business.

Do customers really want that extra feature? Can you afford it? Can they afford it? Can competition copy it? Whatever the decision, the final combination of the core product, tangible product and augmented product along with price, promotion and distribution need to work together if a product is to be successful.. Better mousetraps are often beaten by poorer mousetraps. It happens all the time.

Competitors constantly juggle their marketing mixes to maximise their product sales. Speed to market; blocked distribution channels; clever pricing strategies; powerful promotions; are all used by competitors to win and keep market share.

The better mousetrap also needs to be part of a coherent, fully integrated marketing mix. The distribution has to get the product to where the target customer can buy it when they want it. The prices have to reflect the desired quality image while simultaneously matchingwhat customers can afford. Finally, customers need to know about the product - it needs to be promoted in the right way.

Each element of the marketing mix should support the product's positioning. The product, its price, its distribution channels and of course the promotion should all reinforce the same message. Without a coherent, fully integrated mix even the best product in the world will fail.

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