Profitable businesses invest in the marketing mix to get the best bang for their buck.
The marketing mix's lasting popularity throughout the years is because the mix encompasses every type of tactic and technique that a marketer needs to bring an offer to the market successfully.Think of the marketing mix as a toolbox that marketing strategy agencies use to accomplish their marketing objectives.
If you’ve ever taken an entry-level marketing class, you have probably heard the term marketing mix come up enough times to recognize it as an essential term to know. It is such a heavily covered topic because, without the marketing mix, marketers would have no guidelines in the strategy or execution of bringing a new product or service to market. It’s every marketer’s starting point.
A marketing mix refers to a set of controllable variables that a company strategically chooses to influence the target buyers’ responses. The elements of a marketing mix include four P’s, i.e., product, price, promotion, and place. These elements work in conjunction to help brands create brand positioning, marketing plan, and advertising strategy.
Professor Neil Borden first used the term ‘marketing mix’ during his presidential address to the American Marketing Association in 1953. However, in his book Basic Marketing: A Managerial Approach, E. Jerome McCarthy was the first to propose four P's within a managerial approach.
The four P’s, i.e., product, price, place, and promotion, have become the most popular elements that marketing teams choose to implement today. Its extreme popularity explains why so many professionals use the marketing mix and the four P’s of marketing interchangeably. The marketing mix elements have remained relevant even as the marketing industry has evolved.
This phase is about more than the physical product you're selling. In the product stage, you have to determine your audience, test your product, decide where it fits within the marketplace, and so much more.
Before you begin to think about marketing your product, you have to understand your product extensively. You probably know it like the back of your hand. All products go through a product lifecycle, and it’s easy to overlook the simple stages that ask questions like:
Before you dive in any deeper, you’ll want to be sure you’re completely confident on the above.
The next step is to determine if your offering is a new or existing product. If you revamped your products recently, it’s crucial to perform a competitive analysis. What makes your product any better than others of its kind? Is it cheaper? Is it better quality? The answers to these questions will help you determine the features you’ll highlight throughout the promotional step.
Next, you’ll need to perform user segmentation to identify and locate your target market. Is there a matching market fit with your product? Utilizing a focus group can provide vital feedback. Offer consumers who fit your target market the opportunity to use and test out your product. The insights they provide will guide your decisions when strategizing price.
Now you’ll need to choose how much you want your product to cost. Selecting the correct price is critical for business success.
It's important not to get your pricing strategy wrong the first time because too high or low of a price may have an irreversible effect. Pricing your product too low doesn't necessarily make your consumers see it as the best value on the market. While this may work in some cases, more often than not, consumers will think of it as cheap than its competitors.
However, pricing your product too high can be just as crippling. It's easy to overprice, especially with a new product, thinking you have to start seeing profit quickly to balance the high cost of developing and launching a new product. And while that's true, you won't see any profit if no one is willing to spend money on your product.
Just like the product stage, research is imperative at this point too. Understand what your competitors are offering, administer audience analysis surveys, and conduct general industry research that can help you decide what an appropriate price range is.
The place is about selecting a distribution channel to reach your customers, whether it's an actual physical store or not.
It is essential to understand where you're most likely to find your customer when determining the place. A place can be an e-commerce website, a catalog, or a magazine. It can also be selling directly to consumers or relying on a retailer to distribute your product. The market research you previously conducted about your customer's shopping habits is critical in determining the distribution channel that will work for you.
Promotion refers to marketing communications. In this stage of your marketing mix, you'll develop and execute any promotional strategies that will help kick start your product launch and entice your target audience.
The tactics you choose to implement at this stage are dependent on your product, price, and place. For example, coupons could be a successful promotional tactic if your offering is a convenience good available at various grocery stores. On the other hand, if you're trying to market a luxury handbag, coupons likely won't cut it. That customer is looking for exclusivity, and promotional coupons make products more accessible to the masses and less expensive, losing the essence of unattainability.
Creating a marketing mix is key to developing a customer base and targeting them with marketing campaigns. Follow these steps to create a compelling marketing mix that smoothens how you reach customers, make sales, and boost profit.
The four P's are a tried and true way of covering all of your bases and taking a new product to market. It is also a helpful way to improve your existing marketing strategy. If your product is premature and you realize your current marketing mix is not cutting it, the four P's can take you back to the basics and carve a more defined path in a new direction.
Starting with your product, the obvious goal in this stage is to determine whether or not your offering fills your customers' needs. How does your product compare to its competitors? What makes it so unique? Once you have a firm understanding of your product and how it compares to its competitors, you're ready to move on to the next stage.
To examine your pricing model, make sure you consider your profit margins, overhead costs, and anticipated supply and demand. To make it easy, imagine you are the customer buying your product. Would you, as a customer, consider this price to be fair compared to equal competitors?
Once you've determined your product and pricing strategy, you'll move on to the third P: place. Is your ideal customer able to easily find your product? Think about their typical shopping patterns. Where do you have to place your product to make it easy for a potential customer to become a customer? If you believe you have decided on the best distribution channel, you are ready to embark on the final P: promotion.
It's a simple fact – you won't see any success from your promotional efforts if it never reaches your target market. There are two essential questions to answer in this stage: Are you promoting your product through a channel commonly used by the target customer? Do the promotional tactics match the type of product you're selling?
For example, let's say you're trying to sell a trendy new shoe to millennials, buying a full-page newspaper ad will hardly do you any good. Think about how your audience consumes information. Is it through the television, on popular social network platforms, listening to the radio, or reading the newspaper? It's crucial to understand these consumption habits to target your audience effectively.
The best thing about your marketing mix is that it's flexible. If you notice industry or customer changes that no longer align with your strategy, you can better evolve your four P's to suit the fast-paced change. Completing a yearly or even quarterly touch base can help ensure your marketing strategy remains relevant.
Although the four P's of marketing constitute the gold standard for marketing mixes, they've still had their criticisms. Bernard H. Booms and Mary J. Bitner came up with the seven P's in 1981. These two marketers recognized that the four P's ignored customer service, which they considered essential to any marketing strategy. The bonus P's are as follows.
This element refers to all of the parties present throughout the purchase cycle and the interactions they have together. People represent the company in some form or fashion, including both employees and customers. The interactions customers have with one another and the employees are essential here. It is vital to provide excellent customer service skills to ensure all communication surrounding your brand is positive.
The process phase is the flow of activities in service delivery. If you're selling your product in a retail store, this process begins the second your customer steps foot into your store and ends at their last interaction. That may be their purchase, but it also could be a potential return or a future shopping trip. Remember, the process focuses on the customer's experience while shopping for the product and the interactions with people.
Physical evidence refers to the environment in which service occurs. In this case, it’s not just where the product is physically distributed to customers, but also the place where customers and employees interact with one another. If you distribute your product via e-commerce platforms, this could be as simple as customer service emails. Or, it could refer to an in-person interaction at the shopping mall.
The four C’s of marketing, consumer wants and needs, cost, convenience, and communication, adapt their related P’s. Robert F. Lauterborn created this method in 1990 as a customer-centric alternative to the four P’s of marketing. He insisted that since marketing is about the customer, the marketing mix shouldn’t focus on the brand but rather the people who buy the product or service.
This element is very similar to the first P, i.e., product. The most significant difference here is that Lauterborn believed that extensive consumer research is essential to understand a need or demand for this new product and how the product or service will best serve it. The wants and needs of customers should drive the creation of a new product or service.
Lauterborn believed the word "cost" should replace price, insisting that the dollar amount isn't the only cost a consumer worries about when making the purchase. Cost is not just the product's price but also the opportunity cost, the loss of a potential gain from an alternative, or even the customer's time spent to obtain the item.
Choosing convenience over place further emphasizes Lauterborn's commitment to the customer. A customer's effort to purchase a wanted or needed product should be little to none. There should be multiple points of offer visibility to ensure that a company caters to a customer in the best way.
In Lauterborn's opinion, promotion is manipulative while communication is cooperative. An honest dialogue between the brand and consumer is the best, as opposed to traditional marketing strategies that only highlight a product's best qualities which can sometimes be deceiving. This communication promotes constructive feedback, questions, and user-generated reviews.
A marketing mix helps marketing managers and business owners measure marketing effectiveness, discover future trends, manage budgets, improve market share, and maintain data quality. Marketing mix also:
A marketing mix has four elements, i.e., product, price, place, and promotion. These components help you define product features, set up pricing points, discover distribution channels, and create effective marketing strategies.
A marketing strategy considers the surrounding competitive environment to set directions for marketing activities. Such strategies attempt to evaluate the competition and make decisions on how to win customers smartly. The difference between a marketing strategy and a marketing mix is that a marketing strategy considers the overall competition, whereas a marketing mix revolves around a company's products.
Learn the importance of marketing objectives in steering your team towards the same marketing goal.
Hannah is a former content marketing associate at G2. She graduated from the University of Missouri with a degree in Journalism. In her free time, Hannah enjoys running with her dog, Teddy, traveling to new and exciting places, and capturing the beautiful places she travels to with her DSLR camera. (she/her/hers)
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