The concept of the “marketing mix” became popular after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940’s after James Culliton had described the marketing manager as a “mixer of ingredients”. The ingredients in Borden’s marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. Eugene McCarthy later grouped these ingredients into the four categories that today are known as the 4 P’s of marketing. The marketing mix decision variables – product, distribution, promotion, and price-are factors over which an organisation has control.
The Four P’s of the Marketing Mix
The four P’s is the best known and most common of the marketing mix models
1. Product – Defining the characteristics of your proposition or value offer to meet the customers’ needs. A product can be anything a prospective customer considers to be of value, a good, a service, a person a place or an idea. The product variable is the aspect of the marketing mix that deals with satisfying a buyers wants and designing a value offering with the desired characteristics. It also involves the creation or alteration of packages and brand names and may include decisions about guarantees and repair services.
2. Price – Deciding on a pricing strategy. A more useful and modern concept is to focus on the markets view of Payment or Cost to the user. The price variable relates to activities associated with establishing pricing policies and determining product prices. Price is a critical component of the marketing mix because consumers are concerned about the value obtained in an exchange. Price often is used as a competitive tool; in fact, extremely intense price competition sometimes leads to price wars. Price can also help to establish a product’s image.
3. Promotion – This includes Advertising Personal Selling Sales Promotion and Publicity (Marketing Public Relations). The modern approach is to see this as Communicating Value and incorporating it in the concept of Integrated Marketing Communications. The promotion variable relates to activities used to inform one or more groups of people about an organisation and its products. Promotion can be aimed at increasing public awareness of an organisation and of new or existing products. In addition, promotion can serve to educate consumers about product features or to urge people to take a particular stance on a political or social issue. It may also be used to keep interest strong in an established product that has been available for decades.
4. Place or Placement – This is about Delivering Value and focuses on distribution. It looks primarily at logistics, and channels of distribution and achieving convenience or accessibility value for the customer. To satisfy consumers, products must be available at the right time and in a convenient location. In dealing with the distribution variable, (also known as Place or Placement) a marketing manager seeks to make products available in the quantities desired to as many customers as possible and to keep the total inventory, transport, and storage costs as low as possible. A marketing manager may become involved in selecting and motivating intermediaries (wholesalers and retailers), establishing and maintaining inventory control procedures, and developing and managing transport and storage systems.