Introduction to the Marketing Mix for college students (part 1)
Marketing is considered by many these days to be a science. Very general definitions of marketing are as follows:
“Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably”. – Chartered Institute of Marketing
“Marketing is the process of planning, and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives”. – American Marketing Association
The Marketing Mix
The discipline of marketing is split into four umbrella categories which we call the “4ps”: Price, Product, Place and Promotion (McCarthy, 1960). Service based organisations sometimes add three other “Ps”: People, Process and Physical evidence to the four 4ps.
Products can be tangible or intangible. A tangible product is something you can physically touch and feel. An intangible product can be a service for example a hair cut. All products have a life cycle; that is from introduction, to growth, to maturity and then decline. However it is important not to forget the gestation period of a product. For example, there might be an opportunity to fill a niche however the gestation period to get to market might be a year, by which time the fad will have past. A company who self aware of their product’s life cycle can adapt and overcome challenges. A product’s life cycle can be manipulated by adjusting the price and range. Apple’s ipod has enjoyed longevity by introducing a range and introducing upgraded versions.
Price isa very important aspect of the marketing mix as it not only determines profitability, but its positioning in relation to competitors.Price is a discipline of study in its own right but there are some general strategies we can briefly overview. Price “penetration” is introducing a product with a low price specifically for the purpose of gaining sales. This might be a strategy for an organisation introducing a new range. Price “Skimming” is used for introducing a higher price and lowering it when competition becomes more prominent. This strategy is used a lot by technology companies as early adopters/innovator demographics tend to pay higher prices for the “latest gadgets”.
There are other factors in determining price such as elasticity of demand. For instance how many other suitable alternative are there? Carbonated cola’s have a greater elasticity of demand as there are so many suitable alternatives whereas the ipod had less elasticity due to its relative uniqueness. This will impact on Price as generally speaking the greater the number of alternatives the more competitive the price is.
Promotion is self explained and encompasses all promotional activity such as Advertising, PR and Sales. As you study further you will learn more about the subject of marketing communication and the strategies that evolve from that appellation. The tactics, or media chosen, will depend on resources but also what the objective of the strategy is. For example is the objective was to raise awareness the media chosen will focus more on mass exposure. If the strategy is to solicit a sale then the communication channel will be more targeted.
Place also means, in this context, distribution. Intensive distribution is used for products which might be considered for purchase as soon as they are seen. This method is what most, if not all, Fast Moving Consumer Good (FMCG) firm’s use. The perception of the outlet has not influence on the consumer’s decision to purchase. Exclusive distribution allows a company to manage the intermediaries who sell their products. Car manufacturers use this method frequently. It can give the product prestige and gives the manufacturer more control. Selective distribution is a compromise of the extremes above. The rational for selective distribution might be economical for example the company might focus on those outlets which promise the greatest probability of success. It could be that the outlet skill set might determine if it’s used to sell products. A good example of this would be a pharmaceutical manufacturer that requires intermediaries to offer sound advice to end users.
Physical evidence is interesting when thinking about a service. If you attend a concert what tangible material is in your possession after words? With that in mind a company can introduce a unique/collectable ticket. Bands sell merchandise such a T-Shirts with this theory in mind. Other attributes of physical evidence are staff uniforms and store presentation.
People can be interoperated as the employees that the consumer will come into contact with. Pizza Hut has a programme called “customer mania” which is designed with this in mind. Its purpose is to motivate employee to be more proactive with customer needs. Some companies train there staff to project more positive postures.
Process represents the systems in place that affects marketing activities. Some fast food restaurants introduce a “soft launch” of new products so as outlets have a period of time to address idiosyncrasies.