The marketing mix or the 4 P’s of marketing are the variables in marketing management that are tactically integrated into the process of satisfying customer needs or market demand. These variables are the product, price, promotion, and place (hence, the 4 P’s). These are called variables because you can modify the degree or scope of each to optimize the success of your marketing campaign.
The marketing mix is at the core of your marketing plan. The tactical integration of these four variables is in support of the implementation of your marketing strategy.
You execute your marketing strategy through your marketing plan. The marketing plan outlines the details of how you blend these four variables to achieve your marketing objectives like boosting sales, increasing market share, or expanding into new markets.
Elements of the marketing mix
This refers either to a tangible product or service. When you talk about a physical product, you consider its physical characteristics like materials, design, dimension, and packaging among other features. You also look at its functions and what benefits it provides to its end-users. You also point out what it can do or provide better than competing products so you can establish its unique value proposition.
You approach a service in almost the same manner except for the physical characteristics. You identify the service functions and benefits like what needs it can satisfy, problems it can solve, or how it can make life better or business run faster and cheaper. You also highlight the competitive advantage of your service offering.
Price is how much you pay for a product. In many cases, price calculation is not simple. Some entrepreneurs consider price as a function of cost, i.e., cost + profit = selling price. Others, particularly those who are really marketing-oriented, look at the price from the more complicated standpoint of how market forces are playing out. From this perspective, you price the product based on the intersection of supply and demand. You can price your product as high as the market can accept or price it as low as possible to beat the competition.
This is why there are two common pricing strategies, namely: skimming and penetration pricing. You skim to maximize profit or you adopt penetration pricing to gain market entry or acquire market share.
Promotion is creating awareness for your product in the target market. It actually goes beyond creating awareness as promotion includes developing an interest in your product among potential customers and eventually leading them to make a purchase decision.
Promotion takes many forms but now generally falls under online and offline (or traditional) promotions. Online promotion includes creating content and using online media such as website, blog, social media, email, and online ads. Offline promotion covers traditional advertising (tri-media [tv, radio, and print] and out-of-home advertising [billboards, transit ads, banners/posters]), events, ground activation, and direct mails. Promotion also includes online and offline public relations and publicity campaigns.
Place (or distribution) refers to how the end-users access your product. Again, this can be categorized into online and offline distribution. Online distribution is dominated by e-commerce where customers can shop, pay, and receive the goods without leaving their house or office. Offline distribution involves the physical stores and offices including the accompanying logistics in moving the goods (and even services) from producers to end-users.
Understanding the marketing mix
It is quite easy to understand why the use of these four marketing variables in marketing management vary in degree and scope depending on market conditions.
How you use the marketing mix is largely influenced by the competitive rivalry in your market.
If you have an innovative product that nobody currently offers and that can satisfy the needs of a large market, you can skim the market by pricing high to maximize profit.
You can use penetration pricing to gain entry into a competitive market and gradually acquire more market share.
In a highly competitive market, you can spend a significant amount of resources for promotion and advertising to create a brand presence comparable or stronger than competitors.
Faster delivery of goods or more conveniently located stores can give you an edge over competitors.
Importance of the marketing mix to your business success
A marketer’s ability to create an optimized blend of the marketing mix will determine how successful his/her marketing campaign will be. An excellent blend will result in remarkable customer needs satisfaction, growing product patronage, and brand loyalty.
Expert management of the marketing mix not only brings marketing success but also business profitability.