What is the Marketing Mix?
The marketing mix (also commonly referred to as the '4 P's of Marketing') refers to the marketing strategy that a business uses to market to their target market. The marketing strategy consists of four components:
1. Product Strategy
2. Place (Distribution) Strategy
3. Price Strategy
4. Promotion Strategy
A marketing manager is responsible for each of these strategies and controls how each is implemented, and manipulated, to address the specific needs of the customer; the target market. A successful marketing mix requires that each piece effectively reaches the customers needs and wants, because if one link is missing or ineffective the whole strategy will not reach its potential. Ultimately, a marketing mix is a well crafted and clearly defined approach to create competitive advantages over competitors while addressing the specific needs and wants of the business target market.
This article will provide a high-level overview of each of the strategies that make up the marketing mix. Keep in mind this part of the process typically comes after a business has established their target market through an analysis of market segmentation. In short, market segmentation is the process of grouping customers based on defined characteristics.
Product Strategy
The product strategy specifically addresses characteristics related to the product. These characteristics include the product being sold along with its' packaging, warranty/guarantee, post-sale service, branding, the company image, and its overall value to name a few. Each of these details ultimately influence how the buyer perceives the product (customer perception), and the value associated with that perception. Each of these characteristics offers a marketer an opportunity to not only facilitate the benefit of the product, but to also create and convey meaning for the customer. Customers are often influenced to buy a product based on the benefit the product provides and what the product means to them; product reputation or quality.
Place Strategy
Product placement refers to the distribution of the product; making the product available for customers where they want it and when they want it. This area of analysis in the marketing mix refers to the physical distribution of the product, as well as shelf placement. Where will it be stored, how will it be moved, and if it's a product that is manufactured, at what stage will the pieces come together to reduce cost while ensuring speed to market. Additionally, where will it be placed in the store? Sometimes location is obvious, but in some rare instances a new product might pair well with not-so-obvious other products. Being able to find creative ways to position a product will not only allow the product to stand out, but it may also provide an opportunity to differentiate the product.
This is an arbitrary example, but illustrates pairing placement opportunities that may indirectly provide a bonus opportunity to differentiate. If you have a new to market premium watch, do you want to place your watch in with the other 40 watches in a watch case and hope it sells... or maybe you want to be creative to separate your product. Maybe you partner with a high-quality, well-known cologne/perfume and get your watches positioned with the cologne. Colognes are typically near the watches so it wouldn't be completely odd, but a watch with the colognes is positioned in a way that it is no longer competing with the other 40 watches; it is now in it's own space mingled with a somewhat related product. You may lose sales because the watch isn't with the other watches (where people are expecting to find them), but you may gain sales because of the pairing and increase value by the pair/placement.
Price Strategy
Pricing strategy is based on what the customer is willing to pay for the product. For a new product quite a bit of research will be required, for an existing product most businesses have a good idea of the price range customers are willing to pay (based on the value of like products). The pricing strategy is the easiest to manipulate, and it has the most flexibility. Not only does price provide strategic benefits (careful to not enter a price war with competitors), but it is one of the most important variables for a business because it has a direct impact on revenue.
Promotion Strategy
Marketing decisions based on promotion strategy involve a review of how the business will advertise, whether or not they will offer sales promotions, maintain public relations, and decide will they do personal selling to promote their product. The objective of implementing a promotion strategy is to decide how the business wants to raise product awareness; how they will educate, inform, or persuade the customer to see the value of their product. The following are some Promotion Strategy Examples used in the real-world marketing environment.