Putting the right product in the right place, at the right price,
at the right time.
It's simple! You
just need to create a product that a particular group of people want, put it on
sale some place that those same people visit regularly, and price it at a level
which matches the value they feel they get out of it; and do all that at a time
they want to buy. Then you've got it made!
There's a lot of
truth in this idea. However, a lot of hard work needs to go into finding out
what customers want, and identifying where they do their shopping. Then you
need to figure out how to produce the item at a price that represents value to
them, and get it all to come together at the critical time.
But if you get just
one element wrong, it can spell disaster. You could be left promoting a car
with amazing fuel-economy in a country where fuel is very cheap; or publishing
a textbook after the start of the new school year, or selling an item at a
price that's too high – or too low – to attract the people you're targeting.
The marketing mix
is a good place to start when you are thinking through your plans for a product
or service, and it helps you avoid these kinds of mistakes.
Understanding the Tool
The marketing mix
and the 4 Ps of marketing are often used as synonyms for each other. In fact,
they are not necessarily the same thing.
"Marketing
mix" is a general phrase used to describe the different kinds of choices
organizations have to make in the whole process of bringing a product or
service to market. The 4 Ps is one way – probably the best-known way – of
defining the marketing mix, and was first expressed in 1960 by E J McCarthy.
The 4Ps are:
·
Product (or Service)
·
Place
·
Price
·
Promotion
A good way to
understand the 4 Ps is by the questions that you need to ask to define you
marketing mix. Here are some questions that will help you understand and define
each of the four elements:
Product/Service
·
What does the customer want from the product/service? What needs
does it satisfy?
·
What features does it have to meet these needs?
·
Are there any features you've missed out?
·
Are you including costly features that the customer won't
actually use?
·
How and where will the customer use it?
·
What does it look like? How will customers experience it?
·
What size(s), color(s), and so on, should it be?
·
What is it to be called?
·
How is it branded?
·
How is it differentiated versus your competitors?
·
What is the most it can cost to provide, and still be sold
sufficiently profitably? (See also Price, below).
Place
·
Where do buyers look for your product or service?
·
If they look in a store, what kind? A specialist boutique or in
a supermarket, or both? Or online? Or direct, via a catalogue?
·
How can you access the right distribution channels?
·
Do you need to use a sales force? Or attend trade fairs? Or make
online submissions? Or send samples to catalogue companies?
·
What do you competitors do, and how can you learn from that
and/or differentiate?
Price
·
What is the value of the product or service to the buyer?
·
Are there established price points for products or services in
this area?
·
Is the customer price sensitive? Will a small decrease in price
gain you extra market share? Or will a small increase be indiscernible, and so
gain you extra profit margin?
·
What discounts should be offered to trade customers, or to other
specific segments of your market?
·
How will your price compare with your competitors?
Promotion
·
Where and when can you get across your marketing messages to
your target market?
·
Will you reach your audience by advertising in the press, or on
TV, or radio, or on billboards? By using direct marketing mailshot? Through PR?
On the Internet?
·
When is the best time to promote? Is there seasonality in the
market? Are there any wider environmental issues that suggest or dictate the
timing of your market launch, or the timing of subsequent promotions?
·
How do your competitors do their promotions? And how does that
influence your choice of promotional activity?
The 4Ps model is
just one of many marketing mix lists that have been developed over the years.
And, whilst the questions we have listed above are key, they are just a subset
of the detailed probing that may be required to optimize your marketing mix.
Amongst the other
marketing mix models have been developed over the years is Boom and Bitner's
7Ps, sometimes called the extended marketing mix, which include the first 4 Ps,
plus people, processes and physical layout decisions.
Another marketing
mix approach is Lauterborn's 4Cs, which presents the elements of the marketing
mix from the buyer's, rather than the seller's, perspective. It is made up of
Customer needs and wants (the equivalent of product), Cost (price), Convenience
(place) and Communication (promotion). In this article, we focus on the 4Ps
model as it is the most well-recognized, and contains the core elements of a
good marketing mix.
Using the 4Ps Marketing Mix Model
The marketing mix
model can be used to help you decide how to take a new offer to market. It can
also be used to test your existing marketing strategy. Whether you are
considering a new or existing offer, follow the steps below help you define and
improve your marketing mix.
1.
Start by identifying the product or service that you want to
analyze.
2.
Now go through and answer the 4Ps questions – as defined in
detail above.
3. Try asking
"why" and "what if" questions too, to challenge your offer.
For example, ask why your target audience needs a
particular feature. What if you drop your price by 5%? What if you offer more
colors? Why sell through wholesalers rather than direct channels? What if you
improve PR rather than rely on TV advertising?
Tip:
Check through your answers to make sure they are based on sound knowledge and facts. If there are doubts about your assumptions, identify any market research, or facts and figures that you may need to gather.
Check through your answers to make sure they are based on sound knowledge and facts. If there are doubts about your assumptions, identify any market research, or facts and figures that you may need to gather.
4. Once you have a
well-defined marketing mix, try "testing" the overall offer from the
customer's perspective, by asking customer focused questions:
1.
Does it meet their needs? (product)
2.
Will they find it where they shop? (place)
3.
Will they consider it's priced favorably? (price)
4. And will the
marketing communications reach them? (promotion)
5.
Keep on asking questions and making changes to your mix until
you are satisfied that you have optimized your marketing mix, given the
information and facts and figures you have available.
6.
Review you marketing mix regularly, as some elements will need
to change as the product or service, and its market, grow, mature and adapt in
an ever-changing competitive environment.
Key Points:
The marketing mix
helps you define the marketing elements for successfully positioning your
market offer.
One of the best
known models is the Four Ps, which helps you define your marketing options in
terms of product, place, price and promotion. Use the model when you are
planning a new venture, or evaluating an existing offer, to optimize the impact
with your target market.
source:
mindtools
