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 PLACE PROMOTION

Product Design Competitive price Channel selection Sales Promotion

Prod.Development Credit Channel coverage Advertising
Prod.Range Discounts Inventory.mgmt Publicity
Quality Allowance Storage/Warehousing Public
Relation
Features Distribution logistics Direct
Marketing
Packaging Transport
Branding
Service
Warranty

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 after-
sales 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 marketing-
mix 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.