The Marketing Mix: What Is It and Why Does It Matter?
A marketing mix is a company’s strategy for a product or group of products. It includes the product’s price, promotion and place (where it’s sold). A single product can have multiple mixes for different target markets. For example, Girl Scout cookies are sold in individual boxes directly to consumers, but they’re also included in care packages that are sent overseas–two very different mixes.
Managing the marketing mix means considering each component carefully to ensure that they all work together to create…well…marketing magic! The most common ppc marketing agency mix refers to four main components: product, price, promotion, and place. If you’ve wondered about how much emphasis your company places on each, read on to find out.
This refers to a company’s line of products (also called the product mix). Each item might be targeted toward a different market segment or niche. For example, Orbitz offers flights, hotel rooms, and rental cars, Cheerios is available in regular and Honey Nut, Coca-Cola has many different flavours, and Siri can connect you with restaurants that deliver. Each one targets a different aspect of the consumer demand curve (more on that later). These are all examples of product decisions–those made at the most granular level of your business. The goals here are tied closely to profit margins: they’ve got to cover costs, but they’ve also got to be competitive enough to lure customers away from other companies.
The product’s physical value is part of the mix, too–what are you actually selling? Is it food, medical care, a plane ticket, or something else entirely? And are there any national or international standards for it that your company has to adhere to (like FDA regulations for food)? That’s another level of decision-making that falls under this component.
You might also consider secondary values at this point. These are called the “intangible benefits” of a product, and they’re things like enhanced social status or convenience. If your brand makes carbon offsets , for example, its intangible benefit is guilt reduction in eco-friendly consumers. You can see how different these intangibles are from the actual physical product, which is worth money in and of itself.
For some companies (especially smaller ones), the product component is the only one that really matters. Of course, this can be risky: if you mess up somewhere else in your mix, your product isn’t going to save you. It might even make things worse! But for those who depend solely on their own unique products (maybe they’re a specialty store or boutique), it’s helpful to think about how everything else ties into your core value as a company: what makes your stuff different from everyone else’s? That way, you’ll always have something good to fall back on if competitors try to imitate you.
This component of your mix is more familiar to people. If you’ve ever bought anything, you’ve negotiated the price, if you plan to run a business someday, it’s likely on your agenda too. Pricing includes both the cost of goods and any additional expenses (like shipping or service fees) that go into delivering your product or service.
Pricing is a balancing act: you have to figure out where your prices fit within the market and how they’ll affect demand. Figure out what your competitors are charging for their products, then set a similar price point–but just high enough so that customers will notice when you raise it! Some companies also offer discounts or bundles to attract buyers with lower sticker prices. These discounts need to balance out too, of course, so that your overall revenue still adds up to a healthy number.
One big consideration here is customer perception of value, which you can find out with market research and by asking current customers what they think about the prices your company charges. This component of marketing is all about getting people to recognize how much they’ll gain from buying your product–and then actually going ahead and making the purchase!
The last thing on this list might surprise you: it doesn’t have anything to do with where or how your product gets sold. That’s because this part of the mix concerns who’s selling it (or, more accurately, who people think is selling it). Promotion includes anything involved in putting your business “out there”–whether through TV commercials, billboards, website ads, or word-of-mouth.
If your business is small or just starting out, this might feel like the biggest decision to make–especially when it comes to advertising. But keep in mind that not all promotion needs to be expensive! Local events are a great way to meet potential customers face-to-face and spread the word about what you do. On a smaller scale, social media can be nearly as effective at promoting your brand–and it costs nothing but time.
Promotion also includes pricing strategies meant to increase demand for your product , which are discussed in more detail under “demand.” The easiest one here is simply raising prices because you think there will be plenty of buyers ready to pay them. But you can also try offering coupons, discounts, bundles, or other incentives to attract more customers.
Promotion is all about getting your name out there and convincing people to give you a shot. For this reason, it’s essential that your promotion mix fits your company’s image and reflects the qualities of its brand. The best way to do this is by having a comprehensive marketing plan that covers everything from prices to website design–and then sticking with it over time!
Though these four components work together as a whole, each one serves a different function for how your company functions overall:
> Product helps drive sales through value proposition and demand generation. This is where companies put their initial investment , so it makes sense why they’d want to get it right.
> Price is the basis for revenue, which is how any company scales. This is where companies negotiate with customers and suppliers alike.
> Place helps manage costs and risks associated with distribution–and as such needs to be flexible enough that changing market conditions can be accommodated.
> Promotion helps build a positive brand image as well as strong customer loyalty, which in turn builds the foundation of trust critical for long-term success.
Thus marketing mix is an amazing tool for simplifying key business decisions into the four broad categories that every company needs to take into account as they wish to succeed. Marketing mix is a great tool for helping businesses figure out what they should be doing to build their brand, products and services. By thinking through the four categories you give yourself a better chance of success as there is nothing worse than overspending in one area and underperforming in another. Ultimately understanding how these four categories work together will help your business grow exponentially.
Marketing mix or 4 P’s is an important concept taught by Harvard Business School professor Dr. Neil Borden to describe the key factors that determine a product’s price, place and promotion decisions to drive profitable sales volume and market share, and profitability through better resource allocation and contribution margin per unit sold.
The marketing mix was created by Dr. Neil Borden in the 1950’s and it is a tool that helps managers to understand what they should be doing to promote their product or service, price it and distribute it effectively. This concept can be applied to any industry from manufacturing, retailing, financial services, entertainment and also to services such as hospitality businesses like hotels, restaurants etc.
It is important for new business owners who are starting out or even existing business owners who want to expand into different markets or launch new products /services.
Marketing mix definition provides a framework for four major marketing decisions that firms must continually make. But how can marketers use the marketing mix model? Here are five ways it can be applied to help you grow your business.