Marketing-mix

Marketing-mix

The marketing-mix is essential for your business plan.

The term “marketing-mix” was first coined by Neil Borden, the president of the American Marketing Association in 1953. It is still used today to make important decisions that lead to the execution of a marketing plan.

The marketing-mix is a business tool used in marketing and by marketers. The marketing mix is crucial when determining a product or brand’s offer, and is associated with the four P’s: price, product, promotion, and place. In service marketing, however, the four Ps are expanded to theĀ Seven P’s to address the different nature of services.

The 4 P’s :

Product product of the marketing-mix

A product is seen as an item that satisfies what a consumer demands. It is a tangible good or an intangible service. Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales fall. In bigger companies marketers do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves.They also consider the product mix. Marketers can expand the current product mix by increasing a certain product line’s depth or by increasing the number of product lines. Also how to position the product, how to exploit the brand, how to exploit the company’s resources and how to configure the product mix so that each product complements the other.

In the business plan there has to be at least room for:

Assortment

Quality of your product or service

Service you offer (e.g. next-day delivery, extended payment)

Suppliers (which suppliers and if there is a dependency)

Place Place of the Marketing-mix
Refers to providing the product at a place which is convenient for consumers to access. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.

 

In the business plan there has to be at least room for:
Potential customers
The extent and nature of the competition (the four most important direct competitors with their pros and cons)
Characteristics of the adjacent area
Price Price of the Marketing-mix The amount a customer pays for the product. The price is very important as it determines your company’s profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy and, depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix. When setting a price, you must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, market penetration pricing and neutral pricing. The ‘reference value’ (where the consumer refers to the prices of competing products) and the ‘differential value’ (the consumer’s view of this product’s attributes versus the attributes of other products) must be taken into account.
Promotion Promotion of the marketing-mix

All of the methods of communication that you may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, sales organisation and sales promotion.

Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. After web 2.0, the capacity of the customers tell about the products that they have bought, making reviews and testimonials related to their use experiences , are examples of public relation, as well. This creates the phenomenon known as word-of-mouth.

The “seven Ps” is a marketing model that adds to the mentioned four Ps, including “physical evidence”, “people”, and “process”: It is used when the relevant product is a service, not merely a physical good.

Physical evidence Physical evidence of the marketing-mix The evidence which shows that a service was performed, such as the delivery packaging for the item delivered by a delivery service. This reminds or reassures the consumer that the service took place, positively or negatively.
Personnel Personnel of the marketing-mix Management-team, HR-policy, salaries
Process Process of the Marketing-mix The processes and systems within the organization that affect the execution of its service, such as job queuing or query handling.

 

Watch the next short video for an explanation of the marketing-mix with examples.
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