Unit – IV: Marketing Mix Elements

What is Marketing Mix

The tools or ingredients or the variables mixed together by the marketers to interact with a specific market
are known as Marketing Mix. It is the essence of any marketing endeavour and is the main building block of
the marketing efforts of an organisation. The concept of marketing says that on the side there is the producer
or marketer and on the other side there is the customer. The organisation wants to have a transaction with the
customers and to do so it has to first develop or produce a product or service, design it, pack it, price it,
name it, label it, promote it, and distribute it. Every one of these decisions is the core of a marketing mix,
which consists of four elements; viz., Product, Price, Place, and Promotion.
According to Phillip Kotler, "Marketing mix are the set of marketing tools that firm uses to pursue its
marketing objectives in the target market."
According to William J. Stanton, "Marketing mix is the term used to describe the combination of four inputs
which constitute the core of a company's marketing system, the product, the price structure, the promotional
activities and the distribution system."

How to Develop a Marketing Mix

1. Define Your Goal and Set a Budget
Developing an effective marketing mix starts with setting the right goals. Once you have set realistic and
measurable goals, determine how much you are willing to spend on achieving your objectives.
2. Study Your Target Customer
In order to build a product or service that your customers would want to buy, you need to know who they
are. Find different segments in your target audience and create separate customer profiles for each. Refer to
these when you are developing your strategies.

3. Identify Your Unique Selling Proposition

Clarify what your unique selling proposition is through customer surveys, interviews, focus groups etc.
4. Understand Your Competition
Carry out a competitor analysis to understand the different strategies and tactics used by your competitors.
This knowledge will be especially helpful when you are creating your pricing strategy.
5. Identify the Unique Features of Your Product
List down the unique qualities and the value of your product. You can build on these when you are
marketing it to your customers.
6. Create a Pricing Strategy
Using the competitor research you have done, build a pricing strategy. Make sure that you have not
overpriced or underpriced your product.
7. Choose Your Distribution Channels & Promotional Methods
Choose the channels you will be distributing your product through based on the type of your product or
service and your target customer. And select the promotional techniques you want to choose based on your
budget, and again the customer and your product.

Importance of Marketing Mix

 Helps understand what your product or service can offer to your customers
 Helps plan a successful product offering
 Helps with planning, developing and executing effective marketing strategies
 Helps businesses make use of their strengths and avoid unnecessary costs
 Helps be proactive in the face of risks
 Help determine whether your product or service is suitable for your customers
 Helps identify and understand the requirements of customers
 Helps learn when and how to promote your product or service to your customers

Elements of Marketing Mix (The 4 Ps of Marketing Mix)

According to McCarthy, the four elements of the marketing mix are as follows:
1. Product
 The first element of the marketing mix is Product, and it depicts the tangible or intangible goods
offered by organisations to customers to satisfy their needs and wants. In simple terms, it is a bundle
of utilities.
 Product Mix means the important decisions related to a product like the design of the product,
quality of the product, the quantity of the product, packaging of the product, etc.
 Besides these decisions, product assortment is also an essential part of the product mix. In simple
terms, it means the number or volume of products and items a specific producer offers to the market.
 For example, ITC is an FMCG company and is dealing with different food products.
The essential components of the product mix are Branding, Packaging, and Labelling.
i) Branding: Under product mix, branding is one of the most important decisions taken by a marketer.
Branding involves deciding whether the product of the firm will be marketed under a generic name or a
brand name. The generic name is the name of the whole class of products. For example, soft drink is a
generic name and Coca-Cola is a brand name.
ii) Packaging: It is the basic activity of every organisation and can be defined as a set of activities or tasks
related to the designing, and production of an appropriate container, wrapper, bag, or box of the product.
Packaging involves three levels; viz., Primary Packaging, Secondary Packaging, and Transportation
Packaging.
iii) Labelling: It means putting identification marks on the package of the product. A label is basically the
carrier of information regarding the product. The information provided on the label of a product includes the
name of the product, its price, date of manufacturing, date of expiry, ingredients, warnings(if any), weight,
etc.

2. Price
 Price is the value of a product or service passed on by the buyer to the seller.
 As a customer is very sensitive about the price of a product, it is a crucial element of the marketing
mix.
 A slight shift by the organisation in the price of a product can shift the customers towards the
competitor's product.
 Therefore, Price Mix is an important decision and is related to the fixing of the price of a product or
service.
 The decisions under price mix are related to demand of the commodity, price of competitors, etc.
 While fixing the price of a commodity, the marketer should keep some factors in mind, such as
pricing objectives, product cost, the extent of competition in the market, customer's demand and
utility, government and legal regulations, and marketing methods used.
3. Place/Physical Distribution
 It is essential to make the product or service available to the customer at the right place and at the
right time, then only the customer would be able to purchase the product or service.
 Place is an element of marketing and is a process of transferring goods from the place of production
to the place of consumption.
 Therefore, Place Mix is an important decision and is related to the physical distribution of the goods
and services to the customers.
 The decisions under place mix include deciding the market for distribution, the channel of
distribution, etc.
 Hence, the place mix consists of Channels of Distribution and Physical Movement of Goods.
 The two different channels of distribution are direct channel and indirect channel. And the
components of physical distribution include order processing, transportation, warehousing, and
inventory.

4. Promotion
 The last element of the marketing mix is promotion, which includes activities undertaken by the
marketer to communicate with the customers and distribution channels so they can enhance the sales
of the firm.
 Through promotional communication, an organisation's aim is to inform and persuade the customer
to purchase the goods and inform him/her regarding the benefits of the product.
 Hence, Promotion Mix is an important decision and includes all decisions of an organisation related
to the promotion of a sale of goods and services.
 Some of the important decisions under promotion mix are selecting a media to advertise the product,
selecting promotional techniques, public relations, etc.
The four major elements of the promotion mix are Advertising, Sales Promotion, Personal Selling, and
Public Relations.
i) Advertising: Advertising means promoting the idea of a product or service through a non-personal
presentation by an identified sponsor. It is a paid form of promotional activity, and helps an organisation in
connecting with the customers indirectly. The basic features of advertising are reach, choice, legitimacy,
expressiveness, economy, and enhancing customer satisfaction.
ii) Sales Promotion: Sales Promotion is a short-term use of the incentives or other promotional activities of
an organisation that helps in stimulating the customer in buying the product. Some of the sales promotion
techniques used by organisations are refunds, discounts, rebates, gifts or premiums, samples, contests,
usable benefits, etc.
iii) Personal Selling: As the name suggests, personal selling means selling products personally. It involves
face-to-face communication and interaction between the buyer and the seller with the motive of sale.
Personal selling does not mean influencing the buyer in purchasing what the seller is selling, but to provide
satisfaction to the customer. Some of the basic features of personal selling are better response, personal
interaction, relationships, etc.
iv) Public Relations: Public Relations means maintaining public relations with the public and by doing so,
the organisations can create goodwill. According to the Chartered Institute of Public Relations, Public
Relations is a strategic management function that adds value to an organisation by helping it to manage its
reputation.

In 1981, Booms and Bitner proposed a model of 7 Ps, comprising the original 4 Ps plus process, people and
physical evidence, as being more applicable for services marketing.
5. People
 People are essential in the marketing of any product or service. Personnel stand for the service.
 In the professional, financial or hospitality service industry, people are not producers, but rather the
products themselves.
 When people are the product, they impact public perception of an organization as much as any
tangible consumer goods.
 From a marketing management perspective, it is important to ensure that employees represent the
company in alignment with broader messaging strategies.
 This is easier to ensure when people feel as though they have been treated fairly and earn wages
sufficient to support their daily lives.

6. Process
 Process refers to a "set of activities that results in delivery of the product benefits".
 A process could be a sequential order of tasks that an employee undertakes as a part of their job.
 It can represent sequential steps taken by a number of various employees while attempting to
complete a task.

7. Physical Evidence
 It refers to the non-human elements of the service encounter, including equipment, furniture and
facilities.
 It may also refer to the more abstract components of the environment in which the service encounter
occurs including interior design, colour schemes and layout.
 Some aspects of physical evidence provide lasting proof that the service has occurred, such as
souvenirs, mementos, invoices and other livery of artifacts.