Marketing Mix

Marketing-Mix According to Stanton marketing mix is a combination of four elements (4Ps)Product, Pricing structure, Physical distribution system, and Promotional activities used to satisfy the needs of an organization’s target market (s)and, at the same time, achieve its marketing objectives. Every business enterprises has to determine its marketing-mix for the satisfaction of needs of the customers. Marketing-mix represents a blending of decisions in four areas-product, pricing, promotion and physical distribution. These elements are inter-related because decision in one area usually affects actions in the others. The basic purpose to determining the marketing-mix is to satisfy the needs and wants of the customers in the most effective manner. As the needs of customers and the environmental factors change, the marketing-mix is also changed. Thus, marketing-mix is a dynamic concept. It concentrates on how to satisfy the needs of the customers. Marketing-mix is a combination of several-mixes. Marketing-mix encompasses product-mix (brand, quality, weight, etc.); Price-mix (unit price, discount, credit, etc.); promotion- mix(advertising, salesmanship and sales promotion); and place-mix (distribution channels, transport, storage etc) Nature of Marketing-Mix Marketing-mix is the marketing manager's instrument for the attainment of marketing goals. It is composed of four ingredients: (i) product, (ii) pricing (iii) promotional activities, and (iv) physical distribution. These elements constitute the core of the marketing system of a firm. A marketing manager implements his marketing strategies and policies through these instruments. Importance of Marketing-Mix Marketing-mix represents a blending of four elements, namely, product, price, promotion and physical distribution. Determination of marketing-mix is an important decision which the marketing manager has to take. If proper marketing-mix is determined, the following benefits will accure to the organization: (i) Marketing-mix serves as the link between the business firm and its customers. It focuses attention on the satisfaction of customers. Thus, it helps in pursuing consumer-oriented marketing. (ii) Since marketing-mix takes care of the needs of the customers, it helps in increasing sales and earning higher profits. (iii) Marketing-mix gives consideration to the various elements of the marketing system. There is a balanced relation between these elements. For instance, the price of a product depends upon its features and branding, packaging, etc. The media of advertisement will depend upon the product and its features. The channels of distribution will also depend upon the nature, utility, etc. of the product. (iv) Marketing-mix facilitates meeting the requirement of different types of customers, product design, pricing, promotion and distribution will depend upon the needs and purchasing power of the customers. If the requirement of customers changes, marketing-mix will also be changed to satisfy their requirements.

Components and interaction of marketing-mix MARKETING MIX PRODUCT

PRICE

Product Design Competitive price Prod.Development Credit Prod.Range Discounts Quality Allowance Relation Features Marketing Packaging Branding Service Warranty

PLACE

PROMOTION

Channel selection Sales Promotion Channel coverage Advertising Inventory.mgmt Publicity Storage/Warehousing Public Distribution logistics

Direct

Transport

1. Product. Product-mix involves planning, developing and producing the right types of products and services to be marketed by the firm. It deals with the product range, durability and other qualities and other features. In short, product planning and development involves decisions about: (i) quality of the product (ii) size of the product, (iii) design of the product (iv) volume of the production (v) packaging (vi) warranties and aftersales service, 2. Price: It is one of the most difficult tasks of the marketing manager to fix the right price. The marketing manager has to do a lot of exercise to determine the price. He should determine the price in such a way that the firm is able to sell its products successfully. Pricing also involves establishing policies regarding credit, discount, delivery and payment. Right price can be determined through pricing research and by adopting test marketing techniques. 3. Promotion. Promotion deals with informing and persuading the customers regarding the firm's product. It involves decisions about advertising, giving free articles on purchase of the particular commodities, conducting contests, role of personal selling are important tools to promote the sale of precuts of a firm. The use of promotional activities like contests, free distribution of samples etc., is also significant. Thus, a mix of advertising, personal selling and sales promotion are used for the promotion of a firm and its products. The promotional tools are briefly described below: (i) Advertising: Advertising is a tool which the marketing manager uses to communicate a message to consumers through newspapers, magazines, television, etc. (ii) Personal Selling: Personal selling is another means of communicating to consumers, and consists of direct person- top- person interaction between salesman and customers. (iii) Sales Promotion. Sales promotion includes all the methods of communicating with the consumers

except advertising and personal selling. It includes free samples, premium on sale, contests, displays, shows and exhibitions, etc. 4. Place or physical Distribution. Place-mix includes activities that are necessary to transfer ownership of goods to customers and to make available goods at the right time and place at which the products should be displayed and made available to the customers. It is management's responsibility to select and manage trade channels through which the products will reach the customer at the right time and to develop a physical distribution system for handling and transporting the products through these channels. The important channels used for physical distribution of goods are wholesalers and retailers. In some cases the manufacturer even owns the retail outlets. For example, there are oil companies in India that own stations distributing their petroleum products. Many manufacturers like Eureka Forbes also sell directly to consumers by way of door-to-door sales persons. Whatever may be the channel selected, the marketing managers are also responsible for measuring channel performance and making changes when performance falls short of expected goals. In addition, he has to develop a system of handling and transporting the products through these channels. The important questions include: Will the product be transported to middlemen by rail or by truck? If by truck, should the company buy its own vehicles or engage a transporter to do the transporting? What is the best route over which the goods should be moved? These are some of the decisions which the marketing managers have to take in the field of physical distribution. The Fifth P: Packaging Apart from the 4Ps company, Packaging has assumed its importance as the 5th P of Marketing-mix strategy. Packaging is the art, science and technology of preparing goods for sale. In recent times, packaging has become 'an effective marketing tool. It can create self- appeal-product and promotion. It has become a useful marketing tool because of the growing importance of self-service, innovation in packaging industry (e.g. Palmolive gives its shaving cream in soft squeeze package which provides full recovery of the contents) The expand marketing-mix In service industry one needs more Ps than the five already discussed. These are as follows: 1. People. People constitute an important dimension of marketing of services. Every employee in the organization becomes a sales person of company's service. Therefore his attitude, style, sense of responsibility, etc. become more important. Customers are important to influence other customers. Their word-of mouth travels faster than company communication. 2. Physical Evidence. A customer needs the service but, it is also important how the service is offered. Thus, cleanliness at school, college, hotels, clinics, restaurants, cinema halls, airports etc. becomes more important. The provision of adequate facilities becomes more important as in case of hotels, airports, etc.. 3. Process. It refers to the process by which a customer is served with the desired product. The process of delivery becomes important in a service organization. It includes the procedures, mechanisms and routines which remain within the organization. For example, bank delivers cash service by the following sequences that are interaction between the employees and the customer: enter bank (security guard checks), fill up cheque or withdrawal from (or get from counter), give cheque/withdrawal from to concerned employee who would check details and ask for any other formality. The employee opens-up ledger/checks in computer for the balance amount in that account. The concerned employee then issues a token to the customer and sends the cheque/withdrawal from the to the concerned officer ot be passed for payment. The

cheque is then cleared from the officer's desk by tallying the signature and entering into the register. The peon then takes the cheque and delivers it to the cashier who will makes the payment to the customer. The process of cheque encashment might take 5-10 minutes in a normal day. This might result into some complaint or dissatisfaction within the customer. Effective marketing must communicate with the customer through right process so that customer convenience of utmost importance. Thus, we see that marketing of services requires and expanded marketing-mix comprising the product, price, place, promotion and the people, physical evidence, and process. The marketer has to be more careful in selecting the right marketingmix strategy in case of marketing of services-to satisfy the customer requirements its. Determining the marketing-mix The purpose of determining the marketing-mix is to satisfy the needs of the customers in the most effective and efficient manner. Since the needs of the customers change, the marketing-mix also changes. Thus marketing-mix does not remain Static. According to Philip Kotler, marketing-mix represents the setting of the firm's marketing decision variables at a particular point of time. Determining the optimal marketing-mix is not an easy exercise. It requires a lot of information, imagination and judgment. The marketing manager identifies target customers and discovers their desires and needs in order to design and effective marketing-mix.