The Marketing Mix or “The 4 P’s of Marketing”
The term “Marketing Mix” refers to a combination of many elements that a company uses to market its product, as there is much more to marketing than just advertising. It essentially looks at everything your company can do to ensure its success in marketing the product. The marketing mix is designated by the common phrase penned by Jerome McCarthy as, “The 4 P’s of Marketing.” The 4 main “P’s” are Product, Price, Place, and Promotion. They are the foundation to the marketing mix. However, in this day and age the marketing mix has extended to 3 more P’s. They are People, Process, and Physical Evidence (including Packaging). Positioning, which is also sometimes known as one of the P’s in the marketing mix, will also be discussed.
Anytime a decision is made to make a change with one of the “P’s”, it also makes an impact on decisions in other areas. For instance, a change in the “Price” of a product, such as lowering the price, could impact the “Place” or distribution area as it requires increased product shipments to retail stores. This is why it is extremely important for the marketing department to meet with other departments to discuss any possible ramifications, and to make sure everyone is on the same page.
Product: It is the tangible object or an intangible service that is getting marketed through the program. Tangible products may be items like consumer goods (Toothpaste, Soaps, Shampoos) or consumer durables (Watches, IPods). Intangible products are service based like the tourism industry and information technology based services or codes-based products like cellphone load and credits. Product design which leads to the product attributes is the most important factor. However packaging also needs to be taken into consideration while deciding this factor. Every product is subject to a life-cycle including a growth phase followed by an eventual period of decline as the product approaches market saturation. To retain its competitiveness in the market, continuous product extensions though innovation and thus differentiation is required and is one of the strategies to differentiate a product from its competitors.
Price: The price is the simply amount a customer pays for the product. If the price outweigh the perceived benefits for an individual, the perceived value of the offering will be low and it will be unlikely to be adopted, but if the benefits are perceived as greater than their costs, chances of trial and adoption of the product is much greater.
Place: Place represents the location where a product can be purchased. It is often referred to as the distribution channel. This may include any physical store (supermarket, departmental stores) as well as virtual stores (e-markets and e-malls) on the Internet. This is crucial as this provides the place utility to the consumer, which often becomes a deciding factor for the purchase of many products across multiple product categories.
Promotion: This represents all of the communications that a marketer may use in the marketplace to increase awareness about the product and its benefits to the target segment. Promotion has four distinct elements: advertising, public relations, personal selling and sales promotion. Advertising may include using specialty packaging to showcase products, utilizing promotional products for your company, or online ads. A certain amount of crossover occurs when promotion uses the four principal elements together (e.g in film promotion). Sales staff often play a major role in promotion of a product.
THE EXTENDED 7 P’S: (Link to article)
- People – All companies are reliant on the people who run them from front line Sales staff to the Managing Director. Having the right people is essential because they are as much a part of your business offering as the products/services you are offering.
- Processes –The delivery of your service is usually done with the customer present so how the service is delivered is once again part of what the consumer is paying for.
- Physical Evidence – Almost all services include some physical elements even if the bulk of what the consumer is paying for is intangible. For example a hair salon would provide their client with a completed hairdo and an insurance company would give their customers some form of printed material. Even if the material is not physically printed (in the case of PDF’s) they are still receiving a “physical product” by this definition.
The Five Is were introduced by Peppers and Rogers in 1997 (Chaffey and Smith 2013, picture right) who felt that interactive marketing requires a strong customer focus. These 5Is complement but do not replace the 7 Ps of the marketing mix which are controllable variables (Chaffy and Smith 2013). They include:
- Identification – Is the companies ability to understand the specific details surrounding who their customers are
- Individualism – is the companies tailored offering for lifetime purchases
- Interaction – this is the company’s dialogue offering that can teach them about customers needs
- Integration – of knowledge of customers into all parts of the company
- Integrity – this is the companies ability to devolp trust through non intrusive marketing
(Chaffey and Smith 2013 p.53)