The Marketing Mix (2/3)

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. PriceDeciding 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.

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6 thoughts on “The Marketing Mix (2/3)

  1. Brian,

    interestin article, however I’m bit concerned with landlocked countries who suffer of having no access to sea ports which deliberately increses the cost of delivery, hence it makes them less competitive to those who has suitable geographic proximity to sea ports. Here in Kazakhstan we suffer of this a lot and may be this is one of the reason why we are not that export oriented country. Of course, this is not the same for minerals which are marketed as to their natural value but when we seek export of commodities the price sensitive is high.

    • There is no such thing as a “natural value” Buyers pay what they think something is worth. I am quite familiar with Kazakstan and have given advice there previously. I understand that added costs to transport something is an important consideration – but there are always ways to increase value by value adding to a commodity.
      Dr. Brian Monger

  2. Rustam,

    Place can also deliver value by making an item difficult to obtain. Even for commodity goods. Coffee is a commodity, shipped from the darnedest places, yet Starbucks has made it a luxury good in part by telling that story.

    Obviously it has to be a pretty good story to deal with any significant cost disadvantage.

    • True DF. It is the value adding actions that create the most worth to a product. Most expensive coffee in the world comes from Indonesia and the beans have been predigrested by some animal before coming to a cup near you.

      Brian Monger

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