After determining its overall marketing strategy, the company is ready to begin planning the details of the marketing mix, one of the major concepts in modern marketing. The marketing mix is the set of tactical marketing tools that an organization uses to create a desired response amongst a set of predetermined customers (or target market). These tools include the product itself, the price of the product, the promotional activities that make the product available to the customers and the place where it is available
The marketing mix consists of everything the firm can do to influence the demand for its product. We refer to the elements in marketing mix as Four Ps: product, price, place and promotion
It means the goods-and-services combination the company offers to the target market. This aspect of the marketing mix includes the design and packaging of a good as well as the physical features associated with it such as services and free home delivery. Thus, a Ford Escape consists of nuts and bolts, spark plugs, pistons, headlights, and thousands of other parts. Ford offers several Escape models and dozens of optional features. The car comes fully serviced and with a comprehensive warranty that is as much a part of the product as the tailpipe.
Price is the assignment of value or the amount of money customers must pay to obtain the product. Marketers often turn to increase price to increase consumer’s interest in a product. This happens when they put an item on sale, but in other cases marketers actually try and sell a product with higher price than people are used to if they want to communicate that it is high quality or cutting edge. Ford calculates suggested retail prices that its dealers might charge for each Escape. But Ford dealers rarely charge the full sticker price. Instead, they negotiate the price with each customer, offering discounts, trade-in allowances, and credit terms. These actions adjust prices for the current competitive and economic situations and bring them into line with the buyer’s perception of the car’s value.
It includes company activities that make the product available to target consumers. This P relates to the supply chain – the set of firms that work together to get the product from the producer to the consumer. Ford partners with a large body of independently owned dealerships that sell the company’s many different models. Ford selects its dealers carefully and strongly supports them. The dealers keep an inventory of Ford automobiles, demonstrate them to potential buyers, negotiate prices, close sales, and service the cars after the sale.
It means activities that communicate the merits of the product and persuade target customers to buy it. Promotions take many forms including personal selling, television advertising, store coupon, billboards, magazine ads and publicity releases. Ford spends more than $1.5 billion each year on U.S. advertising to tell consumers about the company and its many products. Dealership salespeople assist potential buyers and persuade them that Ford is the best car for them. Ford and its dealers offer special promotions—sales, cash rebates, and low financing rates—as added purchase incentives.
An effective marketing program blends each marketing mix element into an integrated marketing program designed to achieve the company’s marketing objectives by delivering value to consumers. The marketing mix constitutes the company’s tactical tool kit for establishing strong positioning in target markets
Although we talk about Four Ps as a separate parts of firm’s marketing strategy, in reality product, price, promotion and place are interrelated. Decision about any one of them affects the entire marketing decision. For example, a firm is introducing a new product which will cost more than the existing products in the market. The cost of the product must include the promotional cost that the firm might incur to advertise that the quality of the product. Furthermore the firm must include high-end retailers in the distribution strategy.
The four Ps concept takes the seller’s view of the market, not the buyer’s view. From the buyer’s viewpoint, in this age of customer value and relationships, the four Ps might be better described as the four Cs.
Thus, whereas marketers see themselves as selling products, customers see themselves as buying value or solutions to their problems. And customers are interested in more than just the price; they are interested in the total costs of obtaining, using, and disposing of a product. Customers want the product and service to be as conveniently available as possible. Finally, they want two-way communication. Marketers would do well to think through the four Cs first and then build the four Ps on that platform
Philip Kotler – Principles of Marketing (14th Edition); Chapter 2 Company and Marketing Strategy