 Today
I am Going to discuss about Marketing Mix. The Marketing mix can
be stated as a set of four decisions which are carried out before launching
any new product. These variables are also known as the 4 P’s of
marketing. These four understanding variables help the firm in making the
strategic decisions necessary for the smooth running of any business. These
variables are
1.
Product
2.
Price
3.
Place
4.
Promotions
Marketing mix is mainly
of two types.
1) Product
marketing mix – It is Comprised of Product, price, place and
promotions. This marketing mix is usually in case of Tangible goods.
2) Service
marketing mix – The service marketing mix includes three
further variables included which are people, physical evidence and process.
Marketing
Mix was first Intrduced by Neil H Borden back in 1964 in his article
“The concept of marketing mix”. Several strategic analysts over the years
believe that the marketing mix can make or break the firm. Having the right
marketing mix at the start of the marketing plan is absolutely essential.
Over time the concept of marketing mix has provided a steady platform for the
launch of a new product or business.
As
mentioned before, the marketing mix is characterized by four
different but equally important variables. These variables are never constant
and may be changed over time. However, a change in one of the variables
may cause a change in all the other variables as well. The variables are
as follows.
1) Product – As
we all are informed earlier, the first thing you need, if you want to start a
business, is a product. Therefore Product is also the first variable in the
marketing mix. Product decisions are the first decisions you need to take
before making any marketing plan. A product can be divided into three
parts. The core product, the augmented product and the tertiary product.
Before deciding on the product component there are some questions which you
need to ask yourself.
·
What product are you
selling?
·
What would be the
quality of your product?
·
Which features are
different from the market?
·
What is the USP of the
product?
·
Whether the product
will be branded as sub brand or completely new?
·
What are the secondary
products which can be sold along with primary (Warranty, services)
Based
on these questions, several Product decisions have to be
made. These product decisions will in turn affect the other variables of the
marketing mix. For example – You launch a Bike with is to have the
highest quality. Thus the pricing, promotions and placing would have to be
altered accordingly. Thus as long as you dont know your product, you cannot
decide any other variable of the marketing mix. However, if the product
features are not fitting in the marketing mix, you can alter the product such
that it finds a place for itself in the marketing mix.
2) Pricing –
Pricing of a product depends on a lot of different variables and hence it is
constantly updated. Major consideration in pricing is the costing of the
product, the advertising and marketing expenses, any price fluctuations in
the market, distribution costs etc. Many of these factors can change
separately. Thus the pricing has to be such that it can bear the brunt of
changes for a certain period of time. However, if all these variables change,
then the pricing of a product has to be increased and decreased accordingly.
Along
with the above factors, there are also other things which have to be taken in
consideration when deciding on a pricing strategy. Competition can be the
best example. Similarly, pricing also affects the targeting and positioning
of a product. Pricing is used for sales promotions in the form of trade
discounts. Thus based on these factors there are several pricing strategies,
one of which is implemented for the marketing mix.
3) Place –
Place refers to the distribution channel of a product. If a product is a
consumer product, it needs to be available as far and wide as possible. On
the other hand, if the product is a Premium consumer product, it
will be available only in select stores. Similarly, if the product is a
business product, you need a team who interacts with businesses and makes the
product available to them. Thus the place where the product is distributed,
depends on the product and pricing decisions, as well as any STP decisions
taken by a firm.
Distribution
has a huge affect on the profitability of a product. Consider a FMCG company
which has national distribution for its product. An increase in petrol rates
by 10 rs will in fact bring about drastic changes in the profitability of the
company. Thus supply chain and logistics decisions are considered as very
important costing decisions of the firm. The firm needs to have a full proof
logistics and supply chain plan for its distribution.
4) Promotions –
Promotions in the marketing mix includes the complete intregration and communications
which in turn includes ATL and BTL advertising as well as sales promotions.
Promotions are dependent a lot on the product and pricing decision. What is
the budget for marketing and advertising? What stage is the product in? If
the product is completely new in the market, it needs product`s awareness promotions, whereas if the product
is already existing then it will need brand recall promotions.
Promotions
also decide the segmentation targeting and positioning of the product. The
right kind of promotions affect all the other three variables – the
product, price and place. If the promotions are effective, you might have to
increase distribution points, you might get to increase the price because of
the rising brand equity of the product, and the profitability might support
you in launching even more products. However, the budget required for
extensive promotions is also high. Promotions is considered as marketing
expenses and the same needs to be taken in consideration while deciding the
costing of the product.
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