The Elements of the Marketing Mix PDF

## The Elements of the Marketing Mix The marketing mix is a range of tactical decisions for marketing a product. Deciding on the appropriate marketing mix is a major factor in influencing whether a business can sell its products profitably. This is the most common aim of marketing departments. The...

## The Elements of the Marketing Mix The marketing mix is a range of tactical decisions for marketing a product. Deciding on the appropriate marketing mix is a major factor in influencing whether a business can sell its products profitably. This is the most common aim of marketing departments. The marketing mix is made up of four interrelated decisions, often called the **4Ps**. These are: * **Product** design and performance * **Price** * **Promotion** (including advertising) * **Place** (where and how a product will be sold to consumers) ### Product Consumers require the right product. This might be an existing product, an update to an existing product or a newly developed one. ### Price The right price is important too. If the price is set too low, then consumers might lose confidence in the product’s quality. If the price is set too high, then many consumers will be unable or unwilling to afford it. ### Promotion Promotion must be effective, telling consumers about the product’s availability and convincing them, if possible, that the brand is the one to choose. ### Place Place refers to how the product is distributed to the consumer through distribution channels. If the good or service is not available at the right time in the right place, even the best product in the world will not be bought in the quantities expected. Not all of the 4Ps have the same degree of significance in every case. It is vital that these elements fit together into a consistent integrated plan. The remainder of this chapter and Chapter 20 analyse the significance of each of these four marketing elements in detail and consider the options available to marketing managers. Some analysts consider that there are more than four Ps. For example, it is argued that in marketing services rather than tangible goods, _people_ (skilled and motivated staff) and _process_ (the way in which the customer accesses the service) are just as important as the original 4Ps. The key issue about the marketing mix, no matter how many Ps it might contain, is that the marketing decisions are interrelated. This means that they must be carefully coordinated to make sure that customers are not confused by conflicting messages about the good or service being sold. ## Product: Why is this a key part of the marketing mix? It is sometimes said that, 'You can sell any product to consumers once, but to establish loyalty and good customer relationships, the product must be right.' Some products fail to meet customer expectations regarding quality, durability, performance and appearance. This means that no matter how low the price or how much is spent on advertising, the product will not sell successfully in the long term. ### What is meant by the term 'product'? The term 'product' includes consumer and industrial goods and services. ### Tangible and intangible attributes of products Why do consumers pay more for a well-known brand of aspirin than a generic, non-branded, cheaper alternative? What do advertisers mean when they state, 'This model of car is the most luxurious in its class'? Consumer decisions are not always easy to weigh up or explain, which makes market research less accurate. However, marketing managers should try to understand what intangible attributes (features) customers are looking for when making their purchasing decisions, as well as the tangible attributes, such as the colour of a car or the size of its engine. Meeting customers' intangible expectations for a product is most commonly achieved by effective branding. ### The importance of product development New product development (NPD) is crucial to the success of some businesses, for example, in the rapidly changing world of computer games. In other markets, it is possible to sell the same product for many years or to adjust and adapt it slightly to meet changing tastes and to enter new segments. One example of new product development is Pepsi NEXT, a new low-calorie soft drink from Pepsi. **Why is new product development so important? There are seven possible reasons:** * **Changing consumer tastes and preferences.** For example, the trend towards home cinemas means that a TV manufacturer has to consider developing new products in this market segment to remain competitive. * **Increasing competition.** Apple started the smartphone revolution, yet it cannot stand still as competition is greater than ever in this market. The iPhone 11 Pro had just been launched when this book was written. What is the latest version now? * **Technological advancement.** It took Dyson 15 years, with thousands of failed attempts, to make a bagless vacuum cleaner operate successfully. Now all vacuum manufacturers have adopted similar technology. * **New opportunities for growth.** If the existing markets a business operates in are mature and no longer growing, then developing products for new markets is essential for further growth. IKEA now offers complete kitchen design and installation services. The demand for its traditional flatpack furniture is now only growing slowly. * **Risk diversification.** Climate change pressure groups are succeeding in forcing governments to place limits on carbon emissions. Oil and gas companies are investing in new forms of renewable energies to create sources of revenue and profit to address the risk of falling demand for oil. * **Improved brand Image.** For example, by developing the Lexus brand of luxury cars, Toyota has taken the strategic move to improve the overall image of the company. * **Use of excess capacity.** For example, hotels increasingly offer spa and beauty treatments to increase demand for empty hotel rooms (excess capacity). For a new product to succeed, it must: * Have desirable features that consumers are prepared to pay for. * Be sufficiently different from other products to make it stand out and offer a **unique selling point (USP)**. * Be marketed effectively to consumers, who need to be informed about it. There are several general categories of new products. These include completely novel ideas that create new products (e.g. the original smartphones), some products that are new for the company launching them (e.g. Sony’s decision to enter the games console market) and some that are new to a particular market (e.g. exporting IKEA furniture to Brunei for the first time). ### Product differentiation and unique selling point (USP) The most successful new products are those that are differentiated from competitors’ products and offer something special. Product differentiation can be an effective way of distancing a business from its rivals and creating competitive advantage. Effective product differentiation creates a USP. **Examples of effective USPs include:** * **Domino’s pizza deliveries:** ‘It arrives in 30 minutes or it’s free.’ * **Dyson vacuum cleaners:** ‘100% suction, 100% of the time from bagless technology.’ * **Mast Brothers Chocolate:** ‘Every bar of chocolate is handmade from purchasing the cacao beans directly from growers.’ **The benefits of an effective USP include:** * **Promotion that focuses on the differentiating feature of the product or service.** * **Opportunities to charge higher prices due to exclusive and unique features, design or customer service - higher prices should lead to higher profit margins.** * **Free publicity from media reporting on the USP of the product.** * **Higher sales compared to undifferentiated products.** * **Customers being more willing to be identified with the brand because it is different.**