By Maahin Ahmed 10A
What is marketing mix?
Marketing mix is a recipe for effective marketing. The marketing mix is a business tool used in marketing and by marketing professionals. The marketing mix is often crucial when determining a product or brand's offer. It includes the 4P's which are Price, Promotion, Place and Product.
An effective marketing mix.
An effective marketing mix is one which:
• Meets customer needs
• Achieves the marketing objectives
• Is balanced and consistent
• Allows the business to gain an advantage over competitors
The marketing mix for each business and industry will vary; it will also vary over time.
Price is the money that you are expected to pay for something that you may want to buy.The price a business charges for its product or service is one of the most important business decisions management make. Setting a price that is too high or too low will ‐ at best ‐ limit the business growth. At worst, it could cause serious problems for sales and cash flow. If you mess this up you could fail your business.
- Customers. Price affects sales. Lowering the price of a product increases customer demand. However, too low a price may lead customers to think you are selling a low quality ‘budget product’.
- Competitors. A business takes into account the price charged by rival organizations, particularly in competitive markets. Competitive pricing occurs when a firm decides its own price based on that charged by rivals. Setting a price above that charged by the market leader can only work if your product has better features and appearance.
- Costs. A business can make a profit only if the price charged eventually covers the costs of making an item. One way to try to ensure a profit is to use cost plus pricing. For example, adding a 50% mark up to a sandwich that costs £2 to make means setting the price at £3. The drawback of cost plus pricing is that it may not be competitive.
Promotion refers to the methods used by a business to make customers aware of its product. Advertising is just one of the means a business can use to create publicity. Businesses create an overall promotional mix by putting together a combination of the following strategies:
- Advertising, where a business pays for messages about itself in mass media such as television or newspapers. Advertising is non-personal and is also called above-the-line promotion.
- Sales promotions, which encourage customers to buy now rather than later. For example, point of sale displays, 2-for-1 offers, free gifts, samples, coupons or competitions.
- Personal selling using face-to-face communication, eg employing a sales person or agent to make direct contact with customers.
- Direct marketing takes place when firms make contact with individual consumers using tactics such as ‘junk’ mail shots and weekly ‘special offer’ emails.
A product is a good or a service that is sold to customers or other businesses. Customers buy a product to meet a need. This means the firm must concentrate on making products that best meet customer requirements.
A business needs to choose the function, appearance and cost most likely to make a product appeal to the target market and stand out from the competition. This is called product differentiation.
- Establishing a strong brand image (personality) for a good or service.
- Making clear the unique selling point (USP) of a good or service, for example, by using the tag line quality items for less than a pound for a chain of discount shops.
- Offering a better location, features, functions, design, appearance or selling price than rival products.
Place is the point where products are made available to customers. A business has to decide on the most cost-effective way to make their products easily available to customers.
This involves selecting the best channel of distribution. Potential methods include using:
- Retailers. Persuading shops to stock products means customers can buy items locally. However, using a middle man means lower profit margins for the producer.
- Producers can opt to distribute using a wholesaler who buys in bulk and resells smaller quantities to retailers or consumers. This again means lower profit margins for the manufacturer.
- Telesales and mail order. Direct communication allows a business to get products to customers without using a high street retailer. This is an example of direct selling.
- Internet selling or e-commerce. Online selling is an increasingly popular method of distribution and allows small firms a low cost method of marketing their products overseas. A business website can be both a method of distribution and promotion.