The marketing mix describes the elements which can be reviewed and considered to create a successful combination of the right product, right place, right price and right promotion. These four elements are adjusted until the ideal combination is found, so that both company objectives and customers’ needs are satisfied. The traditional marketing mix consists of the four Ps (price, place, product and promotion) but can be extended to the 7Ps to encompass service aspects by including people, processes and physical evidence.
Product
A ‘product’ can be considered as a definition of the goods and services which satisfy a consumer’s needs or desires. It can be tangible, with independent physical features, or intangible if discussing services, or both, which includes the service-related elements of a physical product. In a restaurant, for example, you consume the food which is a tangible product but are also served which represents the intangible, i.e. service. The two combined together represent the combined ‘product experience’.
Product categories also have a specific life cycle, starting with the moment it is launched into the market until it is ultimately withdrawn after a certain period of development and growth. This is discussed further in ProductLife Cycle.
Price
This is the amount paid by the customer for the product. Price is a key element relating directly to total revenue and ultimately to the profit of the organization. However, it is the most flexible component of the marketing mix and it should be established by taking into account many other factors such as the price of competitive products, customers’ needs, the cost of production and distribution or the company’s position on the market. Pricing is discussed further in Pricing Strategies
Promotion
Promotion is all the communication methods used by a company to inform both customers and prospects about their products or services. Promotion has its own mix which traditionally includes advertising, personal selling, online communication, direct marketing, public relations and sales promotion.
Place
Place can also be referred to as ‘distribution channels’. It includes the physical access point where the product is provided to customers, and the methods of transporting or storing goods before making them available for clients. It also the sales channels used, such as online or via shops and distributors or other intermediaries. Getting the right product to the right place at the right time is strongly influenced by these distribution channels. They can be short channels which are directly from vendor to consumer, or longer which may include intermediaries such as wholesalers, distributors, agents or retailers.
Extended Marketing Mix
Three more Ps can be added to the 4Ps when referring to the service industry or service-related aspects of physical products. People represent an essential element in the process of providing services. Proper recruitment and training of staff is a method of obtaining competitive advantage as good customer service is a key element in the perception of services that the customers use. Process refers to the procedures, mechanisms and activities that are used to deliver services and should aim at achieving, or exceeding, the customer’s expected standards of efficiency. Physical evidence represents the environment where the service is delivered and is, in effect, a meeting point between the company and customers. In addition to branding, it also includes the general appearance of buildings, equipment, signs and logos, uniforms, vehicle livery, stationery, websites, etc.
Combining the Elements
If we were baking a cake, we could combine a relatively small number of ingredients in an infinite variety of ways and create a huge array of options. In the same way, we can combine the various components of the marketing mix in different ways to produce unique results. Promotion is often considered as one of the most important elements, but we cannot focus on promotion until we know details regarding the product, the price or the customers; therefore promotion may actually be the final element considered. As emphasized before, the marketing mix is different for every company and depends on the company’s profile and aims. For example, price is an important element for low cost airline companies, whereas quality is the main point of interest for luxury markets and promotion plays an important part in FMCG industry. Another marketing mix approach is to focus on the customer’s perspective, rather than the company’s. Therefore, instead of price, we may think of the cost as perceived by the customer. In a similar way, promotion could be expressed in terms of communication perceived by the customer and place can be substituted by the convenience of bringing a product to a customer, or the customer to a product.