An Overview of Marketing Mix, Meaning and definition of Marketing Mix

An Overview of Marketing Mix, 

Learning objectives:- 

Meaning and Definitions of Marketing Mix

Nature of Marketing Mix

Elements of Marketing Mix

Explanation of Product Mix

Explanation of Price Mix

Explanation of Promotion Mix

Explanation of Place Mix

Meaning of Marketing Mix

Marketing mix is the policy framework adopted by the marketeer to get success in the field of marketing. It refers to the amounts and kinds of marketing variables, the firm is using at a particular time. Under marketing mix, we include: Product Mix, Price Mix, Promotion Mix and Distribution Mix.

It is rightly remarked that it is not the product but the satisfaction that are sold. Nowadays, in order to be a successful marketeer, one must care for customer satisfaction. For this one should know the real needs of his customer and then use the resources to produce the products, which will best satisfy the identified needs. A customer-oriented firm perform number of functions to satisfy customers needs. The effective coordination of these functions is often called as 'Marketing Mix'.

Historical Development of Marketing Mix

The term 'Marketing Mix' was first used and popularised by Prof. Neil H. Borden of Harvard Business School, London. According to him, he got an inspiration to use this term from Prof. James Culliton.

Prof. James Culliton, an American marketing expert in 1948 described the marketing manager as a 'decider' or a 'Mixer of ingredients'. According to him, "a marketing manager is a decid who sometime follow a recipe prepared by others, sometime prepare his own recipe, sometime adopt a recipe of the ingredients immediately available, sometime invests some new ingredients which are not tried before." After reading Prof. Culliton's description Prof. Borden developed the idea of 'Marketing Mix.

According to Prof. Neil H. Borden, he like the explanation of James Culliton calling a marketing manager as a "mixture of ingredients", i.e one who is constantly engaged in designing a mix of marketing procedures and policies to make the enterprise profitable.

Hence, marketing mix is a strategy for the attainment of marketing objectives. It includes four ingredients:

1. PRODUCT

2. PRICE

3. PROMOTION

4. DISTRIBUTION

These ingredients/elements are interrelated and revolve around customer satisfaction. In essence, marketing mix is the set of controllable variables that the firm can use to influence the buyer's response.

According to Philip Kotler, the marketing mix in the form of 'Four P's' explain the seller's view of the market and not the buyer's view. In the modern times, when we accept the modern concept of marketing, the marketing mix can also be explained in the form of 'Four C's' from the consumers point of view:

4 P's

Product

Price

Place

Promotion

4 C's 

Customer solution 

Customer cost 

Convenience Promotion

Communication 

Thus, (i) while marketeers see themselves as selling a product, consumers see themselves as buying a solution to their problem,

 (ii) customers are more interested in the total cost of obtaining, using and disposing of a product, 

(iii) customers want the product and service to be conveniently available, 

(iv) finally, they want two-way communication. This is the modern explanation of marketing mix. Marketeers can do well if they think through Four C's to develop Four P's.

Definitions of Marketing Mix

Marketing mix is the combination of the product, the distribution system, the price structure and the promotional activities. Different authors define the term marketing mix in the following manner:

According to R.S. Davar, "The policies adopted by the manufacturer to attain success in the market constitute the marketing mix."

According to McCarthy, "Marketing mix is the pack of four sets of variables namely product, price, promotion and place variables."

According to William J. Stanton, "Marketing mix is the term used to describe the combination of the four inputs which constitute the core of a company's marketing system- the product, the price structure, the promotional activities and the distribution system."

Marketing mix is a term generally used to denote a particular combination of marketing variables which are controllable by an enterprise and which are used to appeal a particular market segment. Philip Kotler has defined it as, "the set of controllable variables that the firm can use to influence the buyer's response." Hence, the marketing mix can be regarded as the 'core' of the company's marketing system.

Nature of Marketing Mix

Marketing mix is the instrument for the attainment of marketing goals. Marketing mix denotes a combination of various elements which in their totality constitute firm's 'marketing system.' It should be noted that four ingredients/elements of marketing mix are interrelated, because the decisions taken in one area usually affects the other. The nature of marketing mix concept should be clear from the following explanation:

I. Product Mix: The product itself is the first element. Product must satisfy consumer needs. Product mix includes the physical product, product services, branding, packaging, colouring, standardising, planning and developing right products, product modification, product innovation etc.

II. Price Mix: The second element which effect the volume of sales is the price. Price mix includes: determining pricing objectives and policies, price fixation, discount policy, concession policy, profit margin, terms of payment, credit policy, etc.

III. Promotion Mix: The third element of marketing mix persuade and attract the customers. Promotion is the persuasive communication about products of the company. Promotion mix includes; personal selling, advertising, sales promotion activities, public relations, displays and demonstrations, participation in trade fairs and exhibitions etc.

IV. Place Mix: The fourth element creates time, place and possession utilities. The place mix also known as distribution mix is the combination of decisions relating to: distribution channels, storage facility, location, inventory level, transportation, warehousing etc.

These four elements of marketing mix are co-equal, interdependent and essential. The decisions on the four elements of marketing mix must be properly coordinated and balanced in order to achieve an optimum marketing mix.

Elements of Marketing Mix

According to Neil H. Borden, "Marketing mix consists a list of the important elements or ingredients that make-up the marketing programme." Elements of marketing mix means composition of marketing mix. The marketing mix is dynamic in nature. It changes with the change in internal and external forces. Each marketing firm has its own unique marketing mix. Such inter-firm deviations arises due to the difference in their product policy, price policy, promotion policy and distribution policy. Moreover, different authors explain the elements of marketing mix in different ways:

I. Prof Albert W. Frey in his book, 'Advertising' has explained the elements of marketing mix using two dimensions:

(i) Product related variables: (i.e. offering) It includes: Product, Brand, Package, Price, Service etc.

(ii) Procedure related variables: (i.e. tools) It includes: Advertising, Distribution channel, Personal selling, Sales promotion etc.

II. William Lazer and E.J. Kelly in their book, 'Managerial Marketing', has explained elements of marketing mix using three dimensions:

(i) Goods and Service Mix: It includes: Product, Brand, Label, Packaging, Pricing, Service etc.

(ii) Distribution Mix: It includes: Intermediaries, Transport, Storage, Warehousing etc.

(iii) Communication Mix: It includes: Information media, Personal selling, Advertising, Sales promotion and other sales aids.

III. H.A. Lipson and J. R. Darling in their book, "Introduction to Marketing Administration' has explained four types of element, such as.

(i) Product

(iii) Distribution

(ii) Condition of sales

(iv)Communication.

IV. Jerome E. McCarthy in his book 'Basic Marketing' explained four types of elements of marketing mix in terms of 'Four P's' because each element start with the english alphabet 'P'.

These are: Product, Price, Place and Promotion. There four fold classifications of marketing mix are accepted by many scholars.

Elements of Marketing Mix- Four P's

Product 

• Product Planning 
• New Product Development
• Product Features 
• Product Variety 
• Branding 
• Packaging  
• Labelling Standardisation & Grading 
• After sale Services 
• Guarantee & Warranty

Pricing 

• PriceObjectives 
• Pricing Policies  
• Price Fixation 
• Discount Policy 
• Concession policy
• Payment period
• Credit terms
• Profit margin
• Instalment payment
• Resale price maintenance

Promotion

• Advertising
• Personal selling
• Public relations
• Dealers Aids
• Customer Aids 
• Sale contests
• Dispays 
• Demonstration Exhibitions

Place

• Channels 
• Distribution area 
• Inventory level 
• Warehouse
• Locations
• Transportation
• Assortment
• Wholeselling 
• Retailing
• Physical distribution

  I. Product Mix 

The product is the focus of all marketing activities. Product is sum total of tangible and intangible attributes including, product design, style, size, quality, colour, brand name, packaging, labelling, after sale services etc. Product mix also include product differentiation, standardisation and grading, product lines etc. Hence, product mix is the total of all product, offered for sale by a company. Some important variables of product mix are explained here:

1. Product design: Product design is a very important feature especially in consumer products like shoes, readymade garments, furniture,crockery, automobile etc. Product should be designed in a manner as desired by the target consumers. Proper designing helps to increase the product's utility, safety and attractiveness. Good designing increases sales, promotes advertising and even permits higher prices.

2. Product Line: Product line is a group of closely related products, which are able to satisfy a similar class of need. For example; BPL Co. manufacturing Televisions, Refrigerators, Music system, Washing machines, etc. in different models. Suppose there are ten models of television, that will be one product line. So, company has different product lines.

3. Product quality: Product quality depends on design, material used, manufacturing process, workmanship, packaging, etc. Generally, specific grade or standards of quality of the product are determined either by agreement among the producer or by law. The quality can be fixed in terms of: size, weight, colour, shape, appearance, flavour, finish, strength and other physical features depending upon the nature of the product.

II. Price Mix

Price is the value of a product expressed in terms of money. It is a matter of vital importance to the buyer and the seller. Exchange of goods and service take place only when the price is agreed upon between buyer and the seller. Price is the primary source of revenue to a firm. The success or failure of a firm depends upon its pricing policy. That is why, every marketeer takes special interest in fixing and implementing his pricing policy. The price mix of a firm include the following items:

Pricing objectives, Pricing policies, Price determination, Terms of credit, Discount policy, Concession policy, Terms of payment, Terms of delivery, Level of margin, Resale price maintenance. Some important variables are explained here:

1. Pricing policies and strategies: The pricing policies and strategies are the guidelines which helps the marketeer in determining the prices so as to match the market needs. The price of a product depends upon factors like demand, cost, nature of product, nature of customers, trade customs, competition, distribution channels, government regulations, economic and political environment etc.(Exam studies) 

2. Terms of credit: To increase the sales, credit sales are necessary. Credit sales though reduces the liquidity position of a firm but it certainly increase the profitability. Credit policy must be decided, keeping in mind the nature of product, type of customers, competition, credit facilities provided by financial institutions; etc.

3. Resale price maintenance: Resale price maintenance is a practice by which a manufacturer try to ensure that his product is sold to the consumer at printed price. It removes price competition and increase the goodwill of the firm.

4. Profit margin: Profit margin is a difference between the final price paid by the customer and cost of production or delivery price. This include margin of retailer, wholesaler and the producer.

The explanation of pricing variables is given in the chapter of 'Pricing'.

III. Promotion Mix

Promotion mix is the communication mix. Promotion is a mean by which marketeer talk to its existing and potential customers. Promotion is an effort to push forward goods and services in such a way so that they gain customer's acceptance. Such a communication/promotion efforts can be personal or impersonal. Personal communication mean face to face communication between buyer and the seller, also known as 'personal selling.' In case of impersonal communication there is no direct link between the producer and the consumer. Impersonal communication includes: Advertising, Sales Promotion, Public Relation's etc. For each component of promotion mix, marketeers set objectives, policies and strategies. The choice or selection of different elements of promotion mix depends upon the nature of product, nature of market, size of market, location of market, distribution strategy, stage of product life cycle and pricing strategy. Some important variables of promotion mix are explained here.

1. Personal Selling: It is an oral communication between firm and its customers. It is useful when market is concentrated, product has a higher unit value and need demonstration. In order to make best use of sales force, proper policies should be framed regarding recruitment, selection, training, motivation and controlling.

2. Sales Promotion: It provides special offers for a limited period to induce consumer purchases. The offers can be in the form of gift coupons, premiums, discounts, contests, free samples, gifts etc. Sales promotion serve as a bridge between advertising and personal selling.

3. Trade Fairs and Exhibitions: Trade fairs and exhibitions are the places where manufacturers and dealers gathered for displaying, demonstrating and selling their products.

4. Public Relations: It is an attempt to achieve good relation with those who are likely to be effected by firm's activities. Public include: customers, shareholders, banks, financial institutions, government, suppliers, competitors, intermediaries and general public.

The explanation of promotional variable is given in the chapter of 'Promotion'.

IV. Place Mix

Place mix is the distribution mix. It is concerned with the smooth flow of goods and services from the producer to consumer by creating time, place and possession utilities. It signifies two things namely: physical distribution and the channels of distribution. It also includes: transportation, warehousing inventory control, wholeselling, retailing etc. Some important variables of place mix are explained here:

1. Transportation: It helps in the physical movement of goods from the place of origin to the place of consumption. Various modes of transport are available such as road, rail, water, air, pipeline. The most economical, efficient and dependable mode of transport must be selected taking into account its cost, nature of product, consumer demand, distance, warehousing facility etc.

2. Warehousing: It is a place where surplus goods are stored and made available to the market when needed. It creates time utility. Nowadays, grading, standardisation, packing etc. are done here, which increases the value of the product and obtain more favourable demand and market price.

3. Inventory Levels: Level of inventory can be predicted by analysing the past and current sales, level of competition and the economic situation. Every firm must keep sufficient inventory of different designs, colours, and sizes depending upon the quantity it expects to sell over a period of time. The helps in fulfilling the orders on time and thus restoring the customers.

4. Distribution Channel: The distribution channel refers to the movement of goods and services from the point of production to the point of consumption through various intermediaries like wholesalers and retailers. These intermediaries help in making products available at right place, at right time and in right quantity.

5. Physical Distribution: Physical distribution is an important area of decision making under place mix. It includes: Distribution planning and accounting, Inbound transport, Material handling, Inventory management, Inplant warehousing, Order processing, Packaging/ repackaging, Despatch of goods etc.

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