Marketing Mix Definition (4Ps, 7Ps, 4Cs, 7Cs): How to Calibrate Product, Price, Promotion, and Place for Maximum Business Profits
The marketing mix, also called 4Ps and 7Ps of marketing, refers to a set of actions that a company uses to promote its brand in the market. It is the pillar of marketing strategy. The 4Ps are Product, Price, Place, and Promotion, while the 7Ps are the 4Ps plus Processes, People, and Physical evidence.
Understanding these two essential components of the marketing mix can keep marketing professionals close to their goals. Over time, many other Ps have surfaced, but these two remain the surest. They can help you figure out how to create a product at a price that represents value to them.
This article explains more about the marketing mix models, how they have evolved, and how to develop a successful marketing strategy.
The 4Ps of Marketing Mix
The 4Ps are the critical factors involved in marketing goods or services. They are the most common models that enhance the components of your marketing mix. These 4Ps are product, price, place, and promotion.
1. Product in Marketing Mix
A product is what is offered in the market to satisfy the consumers’ needs and wants. Think of it as an umbrella that describes what a business wants to introduce and sell to its customers. It is the crux of the marketing mix. They can either be in the form of tangible, intangible, or services.
We experience tangible products with our five senses. For example, you may like strong coffee based on your sense of smell and taste. An example of an intangible product is antivirus software. It offers protection to your computer, but you do not experience its physical presence.
Getting your hair done at a salon is you benefitting from the facilities provided based on your specific needs. This is an example of service.
The product they offer must align with market demands to make it a successful product for any organization. It must work to be what consumers expect. Marketers should identify what their product stands for and how it differentiates from competitors before they can be regarded as successful.
People choose to use various products based on product variety, design, quality,
features, packaging, warranty, and returns. Therefore, you should consider the experience that users have with your product to stand apart from competitors.
This will help the market to analyze the product life cycle in detail. The product life cycle is when a product is introduced to consumers until it is removed from the shelves. It traditionally has four phases- introduction, growth, maturity, and decline.
In the introduction phase, a marketing team develops a sales strategy and introduces the product to the market; thereby, creating awareness. This stage does not determine the product’s eventual success. However, you will know if consumers love your product and how they interact with it at this stage.
The primary purpose of this stage is to get the product into the hands of consumers. You will also decide the channels and ways to advertise your new product and the messaging when marketing to customers.
Marketing costs are usually high at this stage, and funding is generally through investors or lenders. At this phase, sales are typically low, and companies may incur more losses rather than profits. One good thing about this phase is that there may be less competition, and a monopoly may be created if your product proves effective.
Products that require more market development may stay longer in the introduction phase. If all of these marketing strategies are successful, the product moves to the next stage, which is growth.
The product will experience a rise in sales in the growth phase once its acceptance is established. This phase is characterized by an increase in demand, production, and expansion in its availability. The public, industries, and consumers become more aware of the product, and sales are increasing.
At this phase, other companies become aware of the product, and competition becomes high. Therefore, it is crucial that you invest more in promotions and advertising to increase the product’s marketing share and be ahead of competitors. Also, the product’s features, support services, and functions can be improved.
By now, you should have enough customer data to start building marketing strategies based on the way customers interact with your products. You should also identify how your brand differentiates from competitors, as this will help your product scale.
At the maturity stage, sales have massively increased, and there are competitors; thus, making it challenging to stay relevant. Production and marketing costs decrease. Marketing done at this phase is aimed at defending market share while maximizing profits rather than awareness. It is the most profitable phase in the product life cycle.
Price competition now becomes intense, product features become enhanced, and distribution more intense because of a massive increase in competitors to give it a competitive advantage. Companies can remain in this phase for a long time or can be passed through rapidly depending on the product. However, after a while, the market will become saturated, and sales may begin to drop.
The decline phase is the stage where products may phase out due to a decline in sales. Increased competition may cause products to lose their market share and begin to decline. Marketing in this phase is usually reduced and often targeted at already loyal customers.
Even though companies will try to keep their products in the maturity stage, the decline is inevitable. Products will phase out of the market unless they can redesign themselves to remain relevant in the market. During this phase, sales drop significantly, and there is a low demand for product sales.
Prices become incredibly competitive. A remedy for this stage would be to reduce marketing and production spends.
The Product Mix
Some businesses, either physical or virtual, offer a variety of products in one overall offering. Available products are grouped based on similar benefits, and the product mix portfolio is called the product mix. A product mix refers to the number of product lines a company or business offers to its customers.
Your product lines may be similar, such as bottled drinks and canned drinks with different packaging. However, you could also have different product lines such as clothes and toiletries. The dimensions of a company’s product mix are width, length, depth, and consistency.
Width is also known as breadth and refers to the number of product lines a company sells. For example, if you own a beverage company and have coffee and tea, you offer two product mixes. Length refers to the total number of products in a company’s product mix. For example, if a company has 3 product lines and has ten products each under those lines, its product length would be 30.
Product depth is the number of product variations in each product line. For example, Nutrilac has different variants under the same product line. Consistency refers to how closely related product lines are to each other. For example, a product line with food categories is more consistent with food categories and toiletries combined.
The Five Product Levels Model
Five components characterize a product. The core product or benefit is the main reason a consumer should buy your product or service. It is the utility that you are providing with the product. For example, the core benefit of a hotel is providing where to stay when you are away from home. Products are not marketed using their core benefits.
Imagine if a hotel is being advertised that it provides you a place to stay when you’re away from home. It offers no competitive advantage.
A product with essential elements is the actual product. This forms the nucleus of the total product as it contains the characteristics, features, and design critical to a product’s functionality. Back to our hotel example, its actual product would be the size of the rooms, type of bed, quality of their food, and much more.
The expected products are the features and benefits that the consumers expect. Considering going to a 5-star hotel, you would be expecting best-in-class service, including clean sheets, free wi-fi, sparkling clean toilet, and many more amazing features.
Additional goods or services are augmented products. In this hotel example, an augmented product would be customer service. This area can help you stand out in the marketplace and be different from your competitors. It converts the desires of a customer into reality.
The potential product is what the product can become in the future to ensure future customer loyalty. Therefore, businesses explore the potential of their already existing products. For example, computers have replaced typewriters, and smartphones have defeated telephones.
A few questions to ask when it comes to your product include:
- What value is your product or service adding to your customers?
- What is unique about your product or service?
- How and where does your audience use your product or service?
- How many products or services do you offer?
- How will the customers experience it?
- What should your product be called?
- How should your product be branded?
2. Price in Marketing Mix
Pricing is the value that is put for a product. It is the demarcation used to enhance the image of a product. This is the only revenue-generating element in the marketing mix. Therefore, you must create a pricing structure before commercializing your product. When making a pricing structure, things to consider are supply costs, seasonal discounts, and competitors’ prices.
It is linked to the business model, which is a representation of the company’s revenue streams. A well-chosen pricing structure helps a company achieve its financial goal, fit in the realities of the marketplace, and reflect your product’s positioning and be consistent with other variables in the marketing mix.
Business executives can increase the prices of products to give them the appearance of being a luxury, and they can also lower the cost so that more consumers can try the product. Pricing can affect marketing performance in the aspects of budget and efficiency.
The price of a product determines how much margin it will make. The higher the margin, the more money marketers have to market their products. Pricing is the only single variable that is flexible and can be changed in no time.
Types of Pricing Strategies
There are different strategies for determining the price of high-tech products.
1. Cost Plus Pricing
Cost-plus is taking a product’s production or supply cost and adding a little profit based on the amount the company wants to make. This is the most widely used pricing strategy because of its ease of understanding. For example, making a cake is $50; you can add a 50% profit to make it $75.
With this pricing strategy, there is freedom of markup percentage; that is, it depends on the seller to determine the profits they want to earn. Percentages could be varied for different products. A significant disadvantage of this strategy is that you could lose out on your optimal profit if your market is willing to pay more for your product.
Let us assume that your production cost is $100 and your estimated percentage is 50% to make a price of $150. If your market is willing to pay $400, you would have lost out on a lot of money. This pricing strategy does not capture the essence of value that the product is to the customer. Thereby not breaking customers’ expectations into consideration.
2. Premium Pricing
Companies price their products high to present them as high-quality, premium, or luxury products in this pricing strategy. This is based on the perceived value of a product rather than its production cost. Brands that use this pricing strategy are known to provide value and status through their products. It is common in the fashion and technology industry.
Customers for consumer goods are often naive as they do not know the price value of products. Brands use this strategy when introducing new products that have distinct competitive advantages over similar products. Premium-priced products are usually higher than their competitors. Everything surrounding the product must show that it’s worth the price.
Premium pricing improves brand value and customer perception of your company and the rest of your product portfolio. It also results in a high profit margin for your business if it is successful. However, it limits the sales of your product to a mass market.
As a brand, you can start using this pricing strategy once you have established a certain level of demand because it is sensitive to your company’s reputation.
You can get a Honda at an affordable rate and serve the purpose of taking you wherever you want to go, but people are willing to pay more for a Benz just because they perceive that it is of a higher quality.
3. Value-based Pricing
This pricing strategy considers the value of a product to its consumers rather than its production cost. It is also called customer-based pricing. An example of this pricing strategy is the seats in an aircraft. Some sets of seats are priced while others are available for booking without any cost.
To set value-based prices, you could use tools that provide you with quantifiable data to allow you to see the actual cost of each customer or job and help you measure the true financial impact of your decision. This strategy is best used when your product cannot be swapped with an alternative and is innovative.
Another example is the early years of the iPhone. Just because there were no products with similar functionalities as at that time, they were able to set a high price and establish the value of a touchscreen smartphone. Once your customers believe that your product is worth the price, they will buy it.
Even if they can charge more for a product, they decide to put the price to suit customer interest based on reviews. Value-based pricing can boost customer loyalty and sentiment. It allows you to constantly be in tune with your customers’ profiles and buyer personas.
With this pricing strategy, you get higher profits by asking for the highest price possible based on perceived value. Of course, you should also research your competitors to ensure that your price is not higher than theirs. But, if it is, you should have a valid explanation for it.
Common industries that use this pricing strategy are fashion, SaaS, cosmetics, and technology. It is also used when the product is scarce. For example, at a concert, a bottle of water usually sold for $0.50 could be sold at $5.
4. Promotional Pricing
This pricing strategy uses the approach of reducing the price of a product for a short time to attract prospects and customers to buy your product. Lowering costs for a short time creates a sense of scarcity and increases the value of a product. It is a sales initiative when launching a product or service, and it creates a feeling of urgency for buyers to act fast.
It increases revenue and is used by consumer brands such as airlines, gyms, restaurants, and service providers. Brands use promotional pricing to create buzz when launching a product or service, increase customer traffic, reward loyal customers, and encourage repeat business.
Examples of promotional pricing are “Buy One, Get One Free,” coupons, flash sales, Black Friday and Christmas sales, and so much more. The “Buy One, Get One Free” deal involves offering a customer an additional free product to incentivize the purchase of another one. Make sure you can still profit from the sales while using this strategy.
This offer is usually centered around the word “free,” which customers love to hear. During this period, you can boost your cross-selling and up-selling and products that do not move independently.
Coupons are vouchers entitling the holder to a discount for a particular product. Then the company only produces the discount to customers with the coupon. Customers who come without the coupon don’t get the deal. E-coupons can get to customers via various delivery channels.
With a well-planned coupon promotion, you can attract new customers, maximize profitability, strengthen relationships, beat competitors, and track customers to find their behavioral patterns. The features of a coupon are that each has a code, discount type, promotion time frame, and redemption rules like a limit on the code per customer.
For flash sales, brands will slash their prices for a few hours to acquire customers and lift profits. Research has shown that people value sales promotion if it is for a limited time.
Promotional pricing attracts budget-conscious customers and helps to drive more revenue into your business within a short time. The rationale behind this pricing strategy is that any losses incurred would be recovered due to increased sales and new loyal customers.
5. Market-based Pricing
The market price is setting a price according to a competitor’s price. Factors contributing to strategizing product prices are competitors’ actions, product features, customers’ willingness and ability to pay, market conditions, input costs, production and distribution costs, and trade margins.
If your product has more advanced features, you could set the price the same as your competitors or slightly higher, making your product better value. The demand for a product could also influence its market-based pricing. For example, shop A sells shoes for $100; you could set your price at $100 or $95.
With higher demand, you can set your price at a higher rate. When demand falls, you could offer incentives to keep customers interested. Every product has its life cycle. In the beginning, prices are high, but as time goes on and the product phases out, the price would fall. It is advisable not to set your pricing too high; otherwise, customers will not patronize you.
If your customers are price-sensitive, it is advisable to match your price below your competitors’ price. Otherwise, you can set your price above competitors’ prices and justify the pricing by explaining the benefits to customers.
This pricing strategy helps companies identify the best prices without investing in a price-setting strategy. In addition, it is pretty efficient, has a stable customer base, carries low risk, leads to equilibrium, and avoids price competition.
An example of market-based pricing is the mobile phone market. There are various brands to choose from, but most suppliers take a cue from each other in pricing and features. As a result, the latest phones have similar prices.
Market-based pricing is solely concerned about the competition and not the customers. Being able to understand your customers will lead to charging higher prices.
3. Place in Marketing Mix
The marketing mix’s role is deciding the best channels for getting your goods to your customers. That is, it refers to where products will be sold. It could include a physical location such as a store and also online or over the phone. In addition, the movement of products to the consumers can be done through a series of intermediaries such as distributors, wholesalers, and retailers.
Other distribution channels include mail-order businesses that send catalogs to companies that place their orders. Some businesses sell their products through telesales. Customers can phone enterprises to place their orders. Also, companies can contact customers and try to convince them to buy their products.
Ecommerce is another way businesses can sell their products. Customers will place their orders on the online store. A few companies have established that their customers would travel far and wide to get their products and services.
The place is where you’ll be distributing products to consumers. Businesses like Amazon sell exclusively online, while others have a mix of brick-and-mortar and online stores. The addition of products in different places can cause a company to experience an increase in revenue.
You might have products that meet your consumers’ needs and offer high value but don’t have the right channel to market them. Customers don’t have to come and look for you. Instead, you should take your business where your customers are. For example, groceries should be sold at the supermarket because that is where the ideal customers are.
A few questions to consider while finding a place for your business are:
- What channels or outlets sell your products?
- How will customers find what you are trying to sell?
- Will sales be exclusively online, or would they be sold in retail stores?
- Will you be selling directly to wholesalers or consumers?
- Where are your competitors?
- How do I reach the right salespeople?
- Do I need a salesperson?
Answering these questions would influence your overall marketing and business strategy. An important thing to do is analyzing your competitors. Know what they are doing right and wrong and how you can be better than them.
Products may be available for sale in different locations. Still, you should ensure that the end product is the same everywhere, even though the customer experience is different.
Concept of Distribution Channels
A distribution channel is the activities and processes required to move a product from the producer to the consumer. Intermediaries involved in this distribution are wholesalers, transporters, and retailers. Products can be distributed to consumers by companies in various ways. There are four main types of distribution channels.
In this distribution channel, the producer makes distribution directly to the consumer. Internet sales is an example of a way to sell directly to your consumer. In getting your goods to your customers, you can regulate transporting the goods yourself, use a shipping provider, and you can also link your online shop to local outlets where customers can pick up their goods.
Firms that practice this distribution system need to manage their own logistics systems, warehousing, resources, and all trading functions such as storing the products and receipts of orders and delivery. In addition, they work towards building trust with their customers due to their face-to-face interaction.
Dual distribution is a wide range of marketing distribution that involves the manufacturer and wholesaler using more than one channel simultaneously to reach the consumer. Many companies have been able to increase the life cycle of their products, increase sales volume and market share using this strategy.
Simply put, a dual distribution strategy is the combination of both direct and indirect distribution. They can sell directly to the consumers as well as other companies for resale. An example of a product sold using dual distribution is smartphones.
Customers looking for a single unit will purchase from a retail store, while those looking for multiple units will purchase from a wholesaler. This strategy allows the business to acquire a larger market share.
Elements of Distribution Mix
The place factor has a huge role to play in ensuring your product’s competitiveness in the market. The elements of a distribution mix are channels of distribution, warehousing decision, product handling, transport, inventory control, order processing, and coverage.
Channels of Distribution
Channels of distribution are the flow of goods from the manufacturer to the producer. These channels include wholesalers, distributors, retailers, and online stores.
Distributors work with manufacturers. However, they sell manufacturer’s goods directly to consumers. They work with wholesale representatives that will buy large quantities of one product.
Wholesalers take finished goods and get them on store shelves. Storage is usually associated with wholesalers, and they buy from distributors. Retailers sell goods directly to consumers. They search for goods that align with their business objectives and find suppliers with the most competitive pricing.
Warehousing is the activity involved in the storage of goods between the time they were procured and the time they are transported to customers. It creates time utility by storing goods throughout the year and releasing them when needed.
The essential function of warehousing is storage. Therefore, warehouses play a crucial role in the process of price stabilization. However, goods in warehouses are exposed to risks in the form of theft, exploration, fire, etc., so they are constructed in such a way to reduce these risks. It also provides the facilities for packaging, processing, and grading of goods. Types of warehouses are private, public, and bonded.
Order processing is the key to customer satisfaction and services. Costs taken into consideration in this element are storage, carrying inventory, material handling, transport, and lost sales. In addition, this element includes receiving, recording, filling, and assembling products for delivery.
Branches of Distribution
There are three branches of distribution that outline how manufacturers want their goods to be distributed in the market.
Intensive distribution is a common form of distribution for consumers where products are sold through as many outlets as possible. This creates brand awareness and boosts sales. More sales mean more revenue for the company. Examples of products that this method is applicable to are soft drinks, cigarettes, and the likes.
This type of distribution is required where there is a range of good brands to choose from so that if the one a customer wants is not available, an alternative will suffice. With this method, companies can analyze the source of sales and know whether a product is more in demand in the local stores or hypermarket type stores.
In this kind of distribution, a manufacturer authorizes only one distributor to carry out sales within a specific region. There is usually an exclusive distribution agreement between a manufacturer and a distributor, and the manufacturer is not allowed to sell products to other distributors.
This distribution method is used to distribute high-quality products that need a specialized level of skill. Employees that are involved in this kind of distribution require training to enable them to sell goods. Industries that often engage in exclusive distribution are high-tech electronics companies, women’s clothing manufacturers, automakers, and major appliance manufacturers.
Suppose Samsung needs a distributor in a specific region; it gets an exclusive distributor for the area because having multiple distributors will reduce its brand’s equity. The distributor then starts its Samsung sales center and starts selling to people in that region. It usually covers either a large or small region.
One remarkable advantage of this distribution method is that these companies can financially stock large quantities of the product. Also, the company is very much in control because the exclusive distributor is dependent on the company.
Selective distribution lies between intensive and extensive distribution. It involves using more than one distributor but lesser than all the intermediaries that carry its products. In this system, the supplier agrees to supply the distributors that meet certain criteria.
With this kind of distribution, manufacturers can pick a price point that targets a specific market of consumers to provide a customized shopping experience. It will give you good market coverage, increased control, and reduced costs.
It provides a mid-way solution between intensive and extensive distribution. Products that use this kind of distribution are low-end range and mid-level range cars.
4. Promotion in Marketing Mix
Promotion is the activities that communicate the product’s features and benefits to the customers and ensure they purchase it. The tools that it uses to contribute to the marketing mix are personal selling, advertising, sales promotion, direct marketing, and public relations.
Once you’ve optimized the other three Ps, it is time to promote your product. Promotion is not just about getting your goods out there but also about generating revenue. A business can use several advertising methods, including television, newspaper, radio, online, and many more.
With public relations, a business can increase its awareness. An example is free media coverage for a new store launch. In addition, companies use sales promotion to increase sales in the short term. Its techniques include discounts, gifts, free samples, competitions, coupons, and many more.
Some businesses use social media for marketing their products and services. This is a cost-effective strategy for communicating your products and services to your customers. You could also use this strategy to take customers to your website.
The three objectives of marketing are to inform, persuade, and remember.
Some questions you should ask before running a promotion for your business are:
- Where and when can I reach my target customers?
- To whom should the promoting efforts be directed?
- When is the best time to promote?
- What marketing methods should I use?
- How do my competitors promote their goods and services?
- What is the marketing budget?
- What is the most effective method to use?
- Do they notice my marketing communication?
Elements of the Promotion Mix
Advertising is any paid form of media communication to promote goods, ideas, and services by an identified sponsor. This is the most widely used tool for promotion marketing. Advertising consumes a significant part of the promotional budget. Means of advertising are newspaper, email, web pages, magazine, television, radio, banner ads, billboards, and many more.
Regardless of the type of promotion, the tool available to reach the target audience is collectively known as the “advertising mix.” Marketers use advertising as a vital tool for increasing brand awareness.
It is used when sponsors want to communicate with many people that cannot be reached effectively through personal means. One advantage of advertising is that it increases profit, makes your brand popular and builds a favorable image.
A good advertisement will elicit the following, response, attention, interest, desire, and action.
Companies share their messages through existing channels in public relations. It can be cost-effective because it leverages existing brands and audiences. One of its downsides is that it is difficult to judge whether the campaign is successful.
It uses the publicity tactic, and the public may be customers, employees, stockholders, the government, and unions. With public relations, you can build and maintain a favorable image for your organization and increase sales. It is aimed at influencing the attitudes and opinions of a specific group by developing a long-term relationship.
The critical steps in implementing public relations are setting the objectives, deciding on the message and the vehicle, and evaluating the results.
This method involves directly marketing to a person. Companies communicate with a narrow group of potential customers through telephone marketing, email, and brochures. This is a cost-effective method for reaching your target market. It is also one of the most effective ways of promoting your brand because the sales rep will tailor the sales directly towards those who are likely to make a purchase.
Direct marketing asks the receiver to take action, such as ordering a product, phoning a toll-free number, coupon mailers, letters, and catalogs. This method of marketing aims to create a one-to-one relationship with the organizations.
Sales promotions are the heart of the marketing world. They are short-term activities that are designed to persuade the customer to purchase your product. However, too frequent promotions tend to lose their effectiveness; therefore, avoid depending on them to drive sales. They may also spoil the product’s image.
You can also use this method by setting up product displays during a public event or social networking. In addition, putting up advertisements through social networks such as Facebook can help you reach a broad audience.
Examples of sales techniques are time-sensitive offers such as “Buy One Get One Free,” coupons, displays, discounts, in-store demonstrations, and many more. This method aims to increase short-term sales. In addition, it supports other promotional activities such as personal selling, advertising, public relations, and others.
This involves face-to-face communication between a sales representative and a potential customer. This is the most effective method for promoting your brand because you will tailor your pitch to customers you know are likely to purchase.
The sales representative will try to outline various product features to convince the customer that they will add value. Personal selling can take place through retail and direct-to-consumer channels. Under the retail channel, a sales representative interacts with a customer who comes on their own to inquire about a product. An example is a customer that walks up to a pharmaceutical company to inquire about a product.
In the direct-to-consumer channel, sales representatives visit potential customers to bring their awareness to the company. An example is a bank salesperson who walks up to a random person on the street to tell them about the bank’s incentives to create an account with them.
With effective personal selling, sales experts can address the buyer’s needs and preferences without making them feel pressured. Some standard tools used in personal selling are sales presentations, conversations, demonstrations, addressing objectives, field selling, retail selling, and reference selling.
One of the advantages of this element of the promotion mix is its flexibility. Salespeople can tailor their presentations to fit the needs and behavior of individual customers.
The Evolution of Marketing Mix: 4Cs, 7Ps, 8Ps, and 7Cs
7Ps of Marketing Mix
There are many Ps in the marketing mix. The 4Ps (Product, Price, Place, Promotion) have been associated with the marketing mix since its inception in the ‘90s, and the extended mix for services (People, Processes, Physical Evidence). The former was discovered when businesses were more concerned about selling products and increasing sales.
After the 4Ps, the other 3Ps were developed because they needed far more than the 4Ps to gain and hold market share. Therefore, the 3Ps solve the deficiencies of the traditional mix.
The 7Ps is also known as service marketing. It is unique to services and is an extension to the 4Ps of the marketing mix. Businesses that offer services are hotels, Software as a Service company, airlines, and many more.
The first P in the marketing mix stands for the product. This involves the services associated with the product, the product design, and its use. Products are usually classified as tangible, intangible, and services. They are services that a company wishes to sell.
Before marketing your products, ensure that it is what customers expect to get. One major setback in the marketing industry is creating and delivering outdated products. You should also strive for ways to stay above your competitors by producing products that add value to your customers.
Looking at your product as if you are an outside marketing consultant and learning how to use marketing tools and models will help your marketing strategy a lot. Factors that facet into a product are benefits, features, design, variety, and image.
Price is the amount of money that a customer pays for a product or service. Your products should have good value for money because customers will pay a little more for a product that is worth it. Pricing for services can be a little more complex than for products.
Your products and services should be priced competitively. You should consider how much customers are willing to pay, profit margins, payment methods, and other costs. Discounts and seasonal pricing can also help attract customers and retain your competitive advantage.
The place is the means through which a product reaches its end consumer. It refers to the ease of access customers have to a service or product. Advancement in technology has enabled flexibility concerning “place” in the marketing mix.
It also refers to how a product is being showcased to customers. They can be showcased through an online store or a physical shop window. What is essential in this element is that the product is made available in the right place, at the right time, and in the correct quantity.
The place has to be carefully considered as it can have a significant impact on sales. You should survey to know where customers are buying from the most, whether online or from retail shops. For startups, finding a place is a crucial marketing tactic.
The nature of your product will determine how it should be distributed. For example, if you own a retail shop, you will distribute to your customers directly, and the distribution chain ends with you. On the other hand, factory owners will sell their products directly or sell them to retailers.
An advantage of selling your products directly is that you get a personal connection with your customers as you interact with them face-to-face. You can also control your product’s pricing and how it should be sold.
Market coverage refers to how wide you want your products to travel. The three types of market coverage are intensive distribution, exclusive distribution, and selective distribution.
Sales promotion, advertising, PR, and social media are communication tools for an organization. These tools are used to pass the organization’s message to the correct audience. Services are more complex than products to promote because they are intangible. Therefore, they are generally referred to as marketing tactics.
Popular ways to promote services include using testimonials, using branding to highlight the quality of a product, offering guarantees to remove risks, and listing any “household name” customers. However, advertising is the best and most used form of advertising.
The goal of running a promotion is to increase sales, response, and conversion rates. The two types of marketing promotions are traditional and digital. Most marketers believe that a combination of the two will help you achieve your marketing goals.
Marketing segmentation helps to know who your customers are so that you can effectively promote them. It is essential to understand the value of a customer whether it is worth running promotions to acquire them.
Promotion raises demand for your product, informs customers about your product, and distinguishes your product in the marketplace.
Having the right people run your company is essential because they are part of your business as much as your products or services. These people are those who are directly or indirectly involved in the delivery of your service. In addition, intangible services are primarily produced and consumed at the same time. Therefore, people play a significant role in determining customer’s experiences.
People in the marketing mix do not include just those you are selling to, but also staff, salespeople, customer service teams, and anyone involved in the sales process. The right people will deliver excellent customer service that will increase your customer base and referrals.
It is essential to analyze your employees and place the right people on the right tasks. Recruiting the right people gives your business a competitive advantage. Companies should ensure that employees have proper guidelines to execute their tasks. There should also be an appropriate feedback and monitoring system to understand how people are performing.
All employees should be trained on both interpersonal and technical or core skills. For example, you don’t want a customer service representative who is not empathetic towards the customer’s issue or a manager who lacks people skills. You should work with people who share the company’s vision and understand the customers’ requirements and concerns.
Any compromise on the employees’ skills will damage the brand image and lead to quality variations. People’s decisions are usually centered around customer service. How do you want your employees to be perceived by customers?
An example would be a guest at your hotel who has told you that they’ll be having a meeting with investors. Then, when the guest is out, your employee puts a note wishing your guest well in his appointment and some complimentary snacks. This will go a long way in giving the guest satisfaction with a high tendency to come back.
Another example would be that you buy a smartphone from a retail store, and the employee attending to you has to google the phone features. The truth is that you won’t trust them with your money.
Process refers to the flow of activities that occur when the customer and business interact with each other. In other words, the steps involved in delivering service to a customer. How service is delivered is part of what your customer is paying for and is usually done when the customer is present. Therefore, every touchpoint from recruitment processes to your performance review process impacts the overall experience.
When a customer orders a product in a restaurant, a process is triggered. Then, as the order gets to them, another process is triggered. Also, when the customer pays for the product and service, another process is triggered. Therefore, reaching the customer should be pleasant for the buyer and time and cost-efficient for you.
One critical factor to a business is keeping the customer happy by responding to customer satisfaction issues. For a smooth transition, every detail needs to be explained to the people in charge of each task of the process. In addition, customers should trust your service because only then will they refer you to friends and family.
A good business process will ensure that you constantly deliver the same standard of service to your customers and save time and money by increasing efficiency. It considers factors such as customer service, customer experience, customization, and personalized touch. The service process is not designed for the provider’s convenience but to have the customer in mind.
You should ensure that each step that you take for these processes is done in a way that minimizes cost for you and still maximizes benefits and value for your customer. Check your processes regularly to guarantee that they are simple and increase your ability to generate revenue. Considering the process from a customer’s point of view can help avoid future problems.
Your business can benefit from having a proper methodology in place.
Every service includes some physical elements, even if what the customer is paying for is intangible. Therefore, physical evidence can be defined as a place where the service is delivered and any tangible element that provides information about the service. It is everything your customer sees when interacting with your business, so your website should send the right impression of your products.
Physical evidence could include the company’s website, business cards, equipment, buildings, annual accounts, and many more. Your customers should always be happy each time they receive your product or service. You can ensure this by improving your physical aspects like the physical appearance of your salesperson, packaging, or interior design.
They need to be assured that the brand they are interacting with is legitimate and exists in real life. Physical evidence takes two forms- proof that your brand exists and proof that a purchase took place. Validation (the visual aspect of your brand) of your brand goes a long way in assuring your customers that your brand is legitimate.
For example, a barbershop will give its customer a complete hairdo as evidence that the service has been rendered. For a potential customer who wishes to visit a hotel for the first time, the physical evidence would be pictures of the hotel, customer reviews, and the hotel’s proximity. Consider how receipts are given after purchase, braces give you straight teeth, and many other examples.
The customer needs some tangible clues for them to use your service. The physical evidence should reflect how the business wants to be seen by its customers. For example, an exotic restaurant needs to ensure that lighting, ambiance, furniture, tableware, amongst others, show an image of quality.
8Ps of Marketing Mix
The original 4Ps of the marketing mix run through the importance of product marketing. However, it was then modified to incorporate the 8Ps for service marketing, previously known as the 7Ps. The 8th P of the services marketing emerged recently and is productivity and quality. It is the measure of the efficiency of a person, system, factory, and so on. Productivity converts inputs into valuable outputs.
The 7Ps of the marketing mix are product, price, place, promotion, people, processes, and physical evidence. Product is the combination of goods offered to customers by a company to satisfy their demands and desires. The price is the amount of money a customer pays in exchange for a good or service.
Place refers to the facilities you use to create and distribute goods to your customers, be it brick-and-mortar stores or the web where it is sold. In order words, it is the location where a service is offered.
A tactic that every business uses to introduce customers to new products and persuade them to patronize is promotion. Examples of this tactic are advertising, digital media, and public relations. In the 7Ps of the marketing mix, People refer to any human involved in the process. This includes contractors, employees, and customers. Customer service at this point is essential as it can pave the way for return business.
The process is anything that affects the way a product is being delivered. It is the approach that gets a product from the manufacturer to the consumer. Physical evidence is the tangible evidence that manifests from an intangible service. That is tangible elements that provide information about a service. For example, hotels invest heavily in their interior decors to offer physical evidence of the quality of their service.
Productivity in the 8Ps of the marketing mix is sometimes called performance, and it examines how well a company’s services compete in the marketplace. It is all about your company’s services to its customers. Best quality with a low price should be what you offer your customers.
Performance represents all the financial and non-financial outcomes of a company and includes elements such as profitability, brand equity, customer equity, social responsibility, legal responsibility, and ethical responsibility. The client himself determines the quality of the level expected quality of a service product.
This P of the marketing mix creates more available resources, such as land, labor, capital equipment, skills, finance, and raw materials. Therefore, you will get higher production, value, and income with the right combination. In addition, it helps in managing costs.
Productivity and quality go hand in hand. Quality is essential for a service to differentiate itself from competitors. It is also necessary for differentiation between customers’ and product loyalty. You should consider the service you’re offering to ensure that it is a good deal for your target audience. If your target audience is not savvy enough to tell the difference between you and your competitors, you might be losing customers.
4Cs of Marketing Mix
What marketers know as the four pillars of marketing strategy are the 4Ps; however, these four categories rely on other pillars of the marketing mix, which are the 4Cs. The 4Cs complement the 4Ps and show what each P in the 4P needs to focus on.
Consumer Wants and Needs
This is the first C in the 4C of the marketing mix and is the individual that uses your product. It focuses on filling the void in a customer’s life rather than the product because most people are not looking only to buy products but for solutions to their problems. Nowadays, marketers are beginning to put the needs of their customers first. Therefore, understanding your customers will help you create products that satisfy their wants, needs, and demands.
Consumers play a significant role in your business because they are the ones that purchase your goods. If companies stick with the production of one product and not try to advance, they will keep competing to gain the interest of the consumer market. One easy way to succeed in a customer-oriented market is to define your target market.
Factors to keep in mind when determining your target market determine your product’s worth and find your market position and advantage.
Once you understand your customers, focus on attracting them one by one with an irresistible offer. Your product has to be what the consumer desires, and it has to be unique to eliminate competition. This will improve communication with your customers and increase sales, making them know that you understand them well.
The best way to achieve this is to develop a product that does not already exist, rather than trying to fit a ready-made product into a market. In this pillar, think about your customers, and every other thing will follow.
Imagine a man walking into a coffee shop in the middle of a cold winter day. If he is a new customer, he needs a hot cup of coffee to keep his body warm and probably a place to sit while he sips on his coffee. However, in a scenario where he is a frequent customer, he could just desire the company of those whom he knows there while having his favorite beverage.
Either way, in the above scenario, the customer’s needs are met.
Cost is the second C in the marketing mix and should not be mistaken for price because the price is a small segment of cost. It does not just include the price of the item, but also the time it takes the customer to get to your location to buy your product or the cost of gas it takes them to get there.
Price is the amount of money a customer is willing to pay to acquire a product, while cost is the amount that goes into producing a product. Thus, it is the sum of the value of all factors of production such as land, labor, capital, and enterprise.
You should ensure that the cost of the product is affordable for the target audience; otherwise, they will not purchase the product. Some organizations will aim their product at more than one target audience to enable them to charge more than one price for their product. This is possible by producing variations of the product.
For example, smartphone manufacturers will produce smartphones with different features. Some would have more advanced features than others, and therefore, would cost more.
Cost is about the total cost of product ownership and not just the price consumers pay for goods. Factors to consider while determining the cost of your product include how much it will take for your customers to access your product, how much benefit it provides, and how much it will take to set up the product.
This C will help find ways to increase the price while decreasing cost to satisfaction. For example, an economist would define cost spending on any resource to acquire another.
An example of this is a couple who spend 10% more on groceries using a grocery delivery service. However, this service saves them about 5 hours of their time on each purchase, availing them time to spend on other vital issues.
The third C in the marketing mix is convenience. It is similar to “place” in the 4Ps of the marketing mix. However, there is a difference. Place refers to where you will sell your products, while convenience is about ensuring that your product is readily available to customers as conveniently as possible to each customer in the target audience.
To successfully apply convenience, you need to consider the customer process, the buying process, and buying experience.
The process of buying and selling should not be one-dimensional. Your customers should be able to buy your product from a store, have the option of home delivery, and have pickup points from other stores. You should study your customers and understand their shopping preferences and the extent to which they will go to purchase your product.
Customers don’t just want information about your product but want to know how it solves their problem. If you sell online, you want to make sure that your website’s interface is intuitive for users to navigate. Also, quality customer support may affect sales of your product positively as it improves convenience.
This pillar is essential for increased sales. The convenience of purchasing a product will attract a customer. For example, suppose you are buying a television or air conditioner, and the seller does not provide delivery and installation. In that case, you may likely not buy because you won’t be ready to go through the stress of getting someone to deliver and install for you.
Convenience allows a buyer from the United Kingdom to purchase a product from Canada with unique properties that can only be found in the products in Canada. This is made possible through an online store.
A few questions to ask yourself to make your products convenient for your customers successfully are:
- What is hindering your potential customers from locating and purchasing your product and service?
- How can you remove these hindrances?
- If you sell online, are the payment processes intuitive and secure?
- Is your product one-dimensional?
- Is your customer support reliable?
- If you were a customer, would you go through your purchasing process?
The goal of this pillar is to ensure that your product is accessible to your customers. If you can make products cost-effective and accessible enough, then your product is set for success.
Without communication, the other 4Cs would not be effective. It is compared to promotion in the 4Ps of the marketing mix. Promotion is used to get customers to know about and purchase a product. Communication refers to the interaction between a buyer and seller and focuses on the entire buying experience.
It has to do with establishing communication concerning their demands and challenges. There are two broad categories of communication. The first is what draws your business to them, and the second is what leaves them engaged, keeps them satisfied and coming back.
Marketers should create an open dialogue with customers to know their wants and needs. They can achieve this through social media messaging, in-store communication, and customer support helplines. Every interaction between the buyer and seller can affect customer satisfaction.
Communication can also be said to be feedback communication that a company gets from customers. Business is not all about promotion. Learning how to interact with customers and creating relationships can go a long way for your business. You should understand how to interact with your customers; otherwise, you will end up saying the wrong things to them.
Effective communication helps to build confidence and trust in your brand and product. It requires asking your customers questions and hearing from them. One of the best ways to do this is through social media. It can also be done via mobile phones, online advertising, surveys, and virtual reality.
Many companies use popular social media tools like Twitter to connect with their customers. This brings customers closer and keeps the brand in their minds. Thereby giving them room to provide you with feedback that will help improve your business.
7Cs of Marketing Mix
The 7Cs is a closer look at the overall marketing strategy. Marketing is essential in every business, no matter what industry you are in. Getting your business online is the best thing you can do to increase visibility and sales pretty fast. The 7Cs of the marketing mix are the 4Cs, Customer, Cost, Convenience, and Communication, plus additional 3Cs, Credibility, Connection, and Customer Service.
Consumers need to trust your business before purchasing, regardless of how great the deals on your products and services are. Therefore, you should focus on reviews and referrals to establish trust and get your business to thrive. If you get this right, your business will experience increased sales.
Your business should be available online so that customers can check you out. This is because people will research the internet before making buying decisions. A website that contains all information about your products and services will fetch you more sales. It also gives you a chance to list your qualifications.
This is important because whatever you post in different channels to enhance the visibility of the brands should be maintained across all the channels. You should define a clear pathway to conversion. Email marketing is one strategy you can use for the conversion process to keep continuity. If your conversion rate becomes higher, you won’t have to reach many people to gain revenue.
Another method you can use for conversion to increase your return on investment (ROI) is social media. It is essential to communicate, convince, and convert social media into action. Social media metrics are about awareness, sales, and loyalty.
If you are not consistent with your postings, customers will lose interest in your brand. Customer satisfaction is one thing you should also look out for. Also, you should be ready to take corrective action to prevent the recurrence of an error. A slack would mean that you should not expect high satisfaction, customer loyalty, and customer retention.
One of the easiest ways to solve customers’ concerns is to set up a FAQ section on your website. For immediate response to problems, you should have one of your employees monitor your social media platforms and get customers’ answers quickly. You can also incentivize your customers and offer secret deals if they join your mailing list.
Employees should always be empathetic and apologize for the company’s errors.
Marketing Mix Examples and Case Studies to Learn From
Marketing approaches are constantly evolving and applied in commercial companies and nonprofit organizations all over the world. An understanding of the marketing mix would be typically talking about the right products, the right place to put them, for the right price, and at the right time frame.
Let’s look at the various case studies to help you better understand the marketing mix and its application.
Johnson and Johnson Marketing Mix
Johnson and Johnson began in 1886 and released its first primary product- a sterilizing technique for catgut sutures. The three main categories of its products are pharmaceuticals, medical devices & diagnostics, and consumer health care. Examples of its Product Inventory are Feminine Hygiene, First Aid, Family Planning, Neurology, Nutritionals, and Diabetes Care.
This company provides people access to their medical products by working with the government to develop differential pricing approaches. It has agreements with the UK for VELCADE, a treatment for multiple myeloma.
Its products can be found at Target, Walgreens, Walmart, Vons, and many more stores. In addition, it offers special discount coupons on products such as baby care and contact lenses. It has also run a “Beauty for All Ages” rebate promotion available at Walgreens and includes discounts.
Johnson and Johnson employs a decentralized management approach. Their goal is to capitalize on scientific breakthroughs, marketing insights, and manufacturing expertise across the full range of their businesses. Their headquarters is located at One Johnson & Johnson Plaza, New Brunswick, New Jersey.
NIVEA Marketing Mix
A case study would be the use of the marketing mix in product launches. For example, NIVEA is a high-quality beauty care product that has grown to be a global company. It is part of a range of brands produced and sold by Beiersdorf. This brand aims to understand their customers and different markets and delight them with excellent beauty care products for their skin.
This business is customer-centric and has helped NIVEA become one of the world’s largest skincare brands. Beiersdorf made this happen by identifying a gap in the market and launched NIVEA VISAGE Young, using a balance of the right product, price, place, and promotion. Once a company gets a balance of these four elements, its product will achieve success.
The company re-launched the NIVEA VISAGE Young many years later with a new design, name, packaging, and formula to suit the product and target market and meet its business objectives.
Sony Corporation Marketing Mix
Another case study is Sony Corporation which is an active follower of the marketing mix. Sony Corporation is considered to be one of the world’s largest media conglomerates. It has passed through three major stages during its development: the small producer, specialized, and big monopoly.
Sony products are oriented on different people and companies that allow them to have a wide range of audiences. Customers always look for good brands that have excellent quality. In addition, their variety of products will enable them to be competitive and thriving in the market.
Pricing in Sony Corporation is usually related to the quality of its products. Customers will pay the average price for a great product. Therefore, they sell their products through different channels. This brand uses the three branches of distribution, exclusive, selective, and intensive, to satisfy every customer interested in their products.
Talking about promotion, Sony Corporation has a substantial promotional budget covering advertising, personal selling, sales promotion, direct marketing, and publicity. Promotion increases demand from customers and improves the quality of the products. Therefore, this brand operates successfully using all components of the marketing mix.
Ryanair Marketing Mix
Ryanair is a single plane company that has become the largest airline in Europe. Michael O’Leary, the CEO of this company, managed to grow it in the face of intense competition. This company offers customers low costs; however, they have other streams of revenue to augment. For example, there is no free food or drink onboard. Instead, you buy them on board if you wish.
Another income stream is through their partnership deals with Hertz car rentals and several hotel businesses. It makes profits from all these, thereby keeping costs lower. They do not use travel agents, so customers book online, saving them 15%. Many of its destination airports are secondary.
This company recruits pilots as young cadets. Then, after some years, they move on to further their careers. Cabin crews pay for their uniforms to be cleaned and invest in their training.
They pay the lowest price possible for their aircraft. Planes are pretty expensive, but this company buys them when other airlines don’t want to. Their process is not intense as you simply just show your passport and reference number upon onboarding. You are not allowed to select a preferred seat as it is on a first-come, first-served basis. Things are faster this way.
Pepsi Marketing Mix
PepsiCo came up with an initiative to split the company into three units, one for food, one for beverages, and the other for food and drinks. They recently created Baked Snacks North America Business Unit to meet customer’s interest in more nutritious foods and snacks.
This company has been under a lot of pressure toward price increase, which is greatly influenced by its working relationship with Walmart. PepsiCo strives to cut down prices by re-engineering its manufacturing process and using inexpensive and recyclable bottles.
It is primarily based in the US, and it generates 52% of its revenue from the states only. PepsiCo runs promotions from time to time and provides its customers with incentives to help them stay interested. In addition, it fosters a corporate culture that values employees and emphasizes diversity in the workplace.
All the information you need to gather is embedded in PepsiCo’s website, including its rich history and manufacturing process. Their packaging philosophy is, reduce, reuse, recycle, remove, and renew.
Google Marketing Mix
Google is the world’s most popular search engine that ranks websites organically and gives speedy search results. People will link to your page if they like your content, thereby giving you a better rank than sites with fewer in-links. It generates its income through advertising, called Google AdWords. Each time you click on an advert, Google gets paid by the advertiser.
It has a relationship with various libraries worldwide, and its goal is to digitize as many books as possible and include them in search results. Google has a lot of products that satisfy customers’ hunger for information.
Google collects your searches to help you refine your search algorithm and retains your search term. It then links these search terms to the address of your computer and then to you.
The company is located at Mountain View in California, enabling employees to maximize their time. You can also look at Google as an online business. They use money off promotions to incentivize advertisers to use AdWords. In addition, their Public Relations function proactively manages media.
eBay Marketing Mix
eBay is a marketplace for the sale of goods and services for individuals. It provides an international site visibility feature on its website that allows some listings created on eBay.com to be posted on international sites.
They offer their customers incentives such as eBay Coupons, eBay discounts, eBay Promotional codes, and an eBay bargains page. With eBay radio, traders and community members will be provided with the latest news and views from around the eBay world.
This company gets its revenue from insertion fees and final value fees. The insertion fee is charged when participants list items on eBay, and the final value fee is charged if the item sells. There is valuable information on their website for easy navigation.
Their office is located at 2145 Hamilton, Ave, San Jose, California. The company introduced a new fashion category and products review tab, which enable users to find the best product at the best price. In addition, eBay purchases are under a new buyer protection program covering a buyer’s full purchase price and shipping fee.
Burger King Marketing Mix
Burger King is one of the world’s best-known fast-food restaurants that began to grow exponentially after introducing the Whopper sandwich. They produce hamburgers, Coffee, Shakes, Fries, Salads, cheeseburgers, Onion rings, cookies, and pies.
Their ‘have it your way” theme allows individualized orders with many options including fries, cheese, bacon, mustard, ketchup, mayonnaise, lettuce, tomato, pickles, and onion. This company recently joined McDonald’s in offering a $1 double cheeseburger.
The company operates its business via franchises, which invest in equipment, seating, and decor, while the company owns or leases the land and building. They occupy a primary location and generate revenue from sales at company restaurants, royalties and franchise fees, and property income from those franchises that lease property from the company.
Burger King’s talent show invites customers to display by submitting videos to win a menu item. They concentrate on adding restaurants. Their strategy is focused on the customer segment that spends the most money at its restaurants.
They are based in suburban Miami, Florida, and operate more than 11,900 restaurants in all 50 states. Burger King’s website provides company information such as history, press releases, and stock information.
Marketing Mix FAQ
The marketing mix is the first thing an organization should consider when starting a business. Marketing your product is based on the marketing mix elements to ensure that it meets your target market, goals, budget, and tactics.
All the Ps in the marketing mix are linked to each other, making it a chain of strong bonds. The mix helps to determine which marketing strategy is right for your organization, as it has a huge impact on your positioning, targeting, and segmentation decisions.
It allows for efficiency in the utilization of the resources available with the organization. It also helps you analyze properly so that you can keep up with whatever changes the future brings and also resulting in effective decision making.
A balanced mix of all the marketing elements will result in the success of the marketing objectives. Designing a marketing mix requires a lot of market research and can develop your pricing and promotion strategies to improve your product and stand out from competitors.
The marketing mix also helps a business to be dynamic because it is prepared when disaster strikes. It can also help to increase the product portfolio in that you can make minor changes to product features, pricing, and promotions.
The marketing mix is the combination of elements controlled by a company to influence customers to purchase its product.
Marketing strategies aim at meeting prospective customers and then turning them into customers of your products and services. This communicates to the customers what the company stands for, how it operates, and why it is suitable for their business. It is the long-term plan that a company wants to achieve.
The marketing channel is the process required to get goods from the point of production to consumption. The relationship between these terminologies is that they are all involved in the marketing process.
You get your brand out there using the elements of the marketing mix. Then, with marketing strategies, you turn prospects into customers by setting the direction of the company or product line and distribute products to them through various distribution channels.
Ready to Take Your Marketing Strategies to the Next Level?
The marketing mix elements make up the business plan for a company and can give success if handled right. Therefore, when conducting a marketing audit, it is only wise that you take note of all the Ps and Cs.
The 7Ps of marketing enhance the components of your marketing mix and helps you define your marketing options. You do not have to follow this model religiously; however, you should scrutinize, adapt, and reshape key factors to suit your business needs, target audience, and customers.
Suppose you expect to have high levels of customer satisfaction, customer loyalty, or customer retention. In that case, you need to deliver well against the 7Cs because they are the minimum requirements your customers have.
Whether you choose to follow the elements of the marketing mix verbatim, or come up with your version, ensure you cover all the essential bases to avoid loopholes in your marketing strategy and customer experience.