Marketing Mix - 4P (B)
What is the Marketing Mix? What are the levers of Marketing Mix? How to apply the Marketing Mix in Different Situations?
Posted: Mar 2008
The Marketing Mix is composed of four main components: Product, Product Distribution, Price and Promotional Mix. Every company in every market has it's own approach to market. Whether it is good or not, successful or not successful, at the end it is unique. So how can market approach be that different? Simply because there are so many variables in the business. There are so many consumers with different needs, grouped in segments. Then, you have many competitors in every market.
There are so many products and services, the same or similar. These Services or Products can be sold in different way, in different places. They can be sold and bought at different price. These Products can be well known by their Brand, or they could be not that known. They can be advertised in different ways, or not being advertised at all.
So there are countless possibilities how some company can build they business. There are countless ways how consumer’s needs could be satisfied. Also, there are many ways how can consumer comprehend a newly established need, as some new product or service appear. This diversity of possibilities, by which one company is reaching their consumers, is literally countless. This communication, exchange, link or flow can be described by four main characteristics. The Product, Product Distribution, Price and the Promotion are known as 4Ps or Marketing Mix.
Marketing Mix 4Ps: Product or Service
First element of Marketing Mix is a Product or Service offered by the Company. This Product or Service is meant to satisfy a certain need of some number of consumers. By supplying this Product or Service, the Company in return gets Sales, Revenue and Profit. Therefore, the symbiosis exists between Supplier Company and Consumers that represent the Market.
In order to be accepted from consumers, the product needs to satisfy a certain consumer's needs. The Product or Service need to satisfy consumers in terms of quality, as well as other intangible assets that some Product can offer. This can be the strength of the Brand, emotions, prestige, multifunctionality, etc.
Marketing Mix 4Ps: Product Distribution
Second element of Marketing Mix is Product Distribution. By only having the Product or Service it is not enough for the Company to run their Business. It needs to be available to their consumers. This means that the consumer needs to be in situation to find his product in certain sales outlets. This is called the Distribution of the product. Simply, the product needs to be distributed in a certain number of shops, stores, restaurants, caffes, kiosks, or wherever else, in order to be at disposal to the consumer to buy it.
Marketing Mix 4Ps: Price
Now, when you have the product that has some characteristics and value for the shopper, and when you placed product at the reach of the hand of consumer, there is one more step, or obstacle, before exchange of values between Supplier and Shopper. This link or obstacle is the Price of the Product. Price, as another element of Marketing Mix, can be a link or barrier at same time. The consumer needs to pay for his product, before the transaction is closed. So if the product is affordable, the consumer will buy it. Consumer usually wants the price to be as lower as possible. At same time, the Producer, or Trade, would like to have the price as higher as possible. This is the main principle of Price perception from opposite angles.
Of course, this principle is quite general and is have many exceptions. For example, the Producer or Trade might want to decrease price, in order to be more competitive in the market, or to incentivise Consumers for more massive shopping. This Price Policy can bring additional sales volume to the Company that can cover the price decrease and bring some extra profit.
On the other hand, consumers sometimes prefer the expensive product. By this some consumers are confirming their social status. Simply, exclusivity has it price and some consumers are ready to pay the extra price, in order to distinguish themselves from the others.
Also, the consumers could suspect in some cases that too low price is reflecting the low quality or some other problem, therefore choosing more expensive product, which is suggesting a higher quality.
Marketing Mix 4Ps: Promotion
Finally, we have the following marketing mix components: the Product, Distributed, and at the Price that is affordable considering the value it offers. But there are many companies that give similar product at similar conditions. In this situation every company need additional wind in a back that will improve the marketing position and assure a certain competitive advantage. This is enabled through Marketing Promotions, as another element of Marketing Mix. There are countless promotional methods, which are grouped in two main segments: Above the Line – ATL ( TV, Internet, Billboards, City Lights, ... ) and Below the Line BTL ( In outlet activities ).
By adjusting parameters of the Marketing Mix, every Company is trying to have balance of investment in the Marketing Mix and return on investment through Sales, Revenue and Profit.
The Success of Marketing Mix strategy of a certain company can be measured both ATL and BTL.
ATL effectiveness of marketing mix is measured through Market Share, Image of the Company, Sales Volume, Revenue, Return of Investment, Profit and other KBIs.
BTL effectiveness of marketing mix is measured in the Market. Simply the outlets show how successful we are, what are our positions, visibility and share versus competition. The In Outlet Marketing execution can be measured by different tools ( check the Marketing Mix Outlet Checkout Tool Box ).
Marketing Mix: Price
Marketing Mix: Promotion
Marketing Mix: The Product
Marketing Mix: Product Distribution
Promotion Mix: Public Relationships
Promotion Mix: Advertising
Promotion Mix: Personal Sales ( Soon )
Promotion Mix: Sales Promotion ( Soon )