Marketing Mix

What Is Marketing Mix?

The meaning of marketing mix can best be referred to as the combination of elements that are used to promote products or services. These elements vary and are based upon the analysis of the four main factors that influence marketing: product, price, place, and promotion (ie. the 4 P's of marketing). The intersection of these four factors influence the choice of specific marketing tactics that form the marketing mix. 

Marketing mix is considered an essential marketing theory that all business people should know in order to be conversant in the field of marketing.

How Marketing Mix Works

No two products are promoted in exactly the same way. Therefore, marketing managers develop product marketing plans based on their analysis and interpretation of many factors:

• The product’s attributes: Features, benefits, proof points (such as studies, testimonials)

• The target audience: Who will buy this product What problems will this product solve? What media does this target audience prefer? Where can we find them online, in print, on the airwaves? What do they like to do in their free time?

• The price: Is it an inexpensive product? A luxury product? Something in between?

• Brand: What is the company’s overall brand? What is the brand promise? How does this product fit into the brand?

Once these questions are answered, marketing managers craft a marketing mix strategy (and the tactical plan necessary to achieve said strategy). The marketing mix becomes part of the tactical plan and describes the elements that will achieve the product’s sales goals.

Elements of Marketing Mix

The elements (also known as tactics) of a marketing mix aren’t fixed but change over time. Often, marketing managers test various elements of the marketing mix to determine which tactics achieve the highest return on investment (ROI). 

Tactics of marketing mix can include one or all of the following:

• A website or landing page for the product
• Search engine marketing
• Social media marketing
• Paid search ads
• Paid social media ads
• Product reviews
• Sales and marketing brochures
• Print advertising in magazines, newspapers, and journals
• Packaging to appeal to the target audience
• Billboards
• Sponsorships 
• Online videos
• Trade show events
• Radio ads
• Television Ads
• Store demonstrations

There’s really no limit to the creativity that marketers use to develop their marketing mix elements. Similar products often use different marketing mixes in the hope of reaching a slightly different target market (or covering part of the market their competitors haven't).

The Four Ps of Marketing

Grasping the concept of the four P’s of marketing is essential since they fit together with marketing mix to develop a marketing plan. 

It always begins with an analysis of the product, then identifies a product’s benefits, and matches the target audience’s needs to guide the rest of the strategy (including choosing the appropriate price and where to promote the product).

1. Product

Even the best marketing mix strategy can fail if the underlying product concept is faulty. Building exceptional products is essential to the success and profitability of any company.

The first step is deeply analyzing a product’s features, benefits, and advantages over the competition. Competitive analysis can help determine the differentiating features of their products that can be highlighted in their marketing materials. Companies may also conduct market research to discover the elements that customers find most appealing about their products.

2. Price

Pricing products is both an art and a science. The price point for any product must be profitable for the company while covering costs and adding an adequate profit margin. Beyond that, determining retail price is a matter of comparing similar products in the market, their price points, what prices the target market is willing to pay, and how to leverage the psychological impact of price. 

Psychological pricing tactics utilize human psychology as part of the marketing mix. Bargain prices often end in unusual numbers (such as Home Depot, which often end '8') while luxury prices may end in '0'.

Depending on the target audience and the brand strategy, the final price point may be a luxury price, bargain price, or something in-between.

3. Place

Place may happen online or in a store, but knowing where people are likely to encounter, discover, and learn about products is essential. 

Sometimes, place is easy to find for a product. Golf enthusiasts, for instance, will probably interact with new clubs at golf courses and pro shops. It might not be as easy to determine where consumers might interact with a new flavor of ice cream. Unlike golfers, the list could extend from supermarkets to convenience stores, restaurants, food trucks, and special events. 

Knowing where people interact with the product (or are likely to encounter the product) leads directly into the last of the four P’s: promotion. 

4. Promotion

Promotion refers to the activities chosen to advertise the product – and how to distinguish and differentiate it in the marketplace. People often equate promotion with marketing, but without product, price, and place, it’s difficult to find the right promotional mix without wasting time and money.

Marketing Mix Example

Jane is a marketing manager for Simple Smartphone, a new smartphone developed for older people. Market research has revealed that people 60 and over find the newer generation of smartphones difficult to use. Jane’s company took that information and developed a new product to compete in the smartphone market against Apple, Samsung Galaxy, and similar phones.

The four P’s quadrant for the new Simple Smartphone looks like this:

Marketing Mix Strategy Examples of Real Businesses

The following companies – and countless others – have chosen to focus on one area of the marketing mix to use as their competitive advantage. 

Dollar Tree leverages price as a factor by pricing everything in the store at $1 or lower. This sends a strong signal to their target consumer that they’ll save money by shopping at their stores. 

Tiffany’s jewelry store uses product as its competitive edge. Available only at their store, the company's signature diamond cut is called a “Tiffany True Cut.” The “Tiffany Blue” of their packaging is so distinctive that the Pantone Company (a company that organizes and catalogues colors for the printing industry) mixed and named the color after the brand. 

Apple focuses on product innovation as the quadrant to leverage for their competitive edge in the marketing mix. Although it has memorable advertising, it’s the product design that sets Apple apart from all others. 

Other Marketing Mix Strategy Examples

Since McCarthy came up with the four P’s in the 1960s, others have used it to create their own marketing mix strategies, including the 7 P’s model and the Boston Consulting Group Matrix.

The 7 P’s of Marketing Mix

The 7 P Marketing add three additional areas to evaluate the marketing mix, including:

The Boston Consulting Group Matrix

The Boston Consulting Group Matrix works from the assumption that the most effective way to market products is by identifying the type of customers that the product appeals to then aligning the marketing strategy and mix to the customer type.

This four-grid system helps managers visualize where their products land on the growth and profit potential scale. If a product shows low market growth or low-profit potential, managers select a marketing mix to boost market growth, profit potential, or both.

Sometimes, however, boosting marketplace growth isn’t possible. Markets can be saturated, meaning that there's little room for growth.

How to Interpret the BCG Matrix

Each box in the BCG matrix reflects a category of low-to-high market growth rate and low-to-high profit potential. The goal is to move question marks and "pets" into either the cash cow or star category (the two most profitable areas). 

• STARS are products with both high market growth rate and high relative market share. These products have both a high potential growth rate but may already have saturated the market. 
• CASH COWS are products with a low market growth rate but a relatively high market share. Cash cows produce reliable, predictable revenue to a market constantly consuming the product. 
• QUESTION MARKS are in a high growth market but have relatively low market share. The reason for their low market share needs to be solved. Can they be moved into the Star category or Cash Cow category? If no, why not?
• "PETS": are products with both a low growth market and low market share. These products may need to be reinvigorated with new concepts, packaging, or formulas – or retired and removed from the product line.

The Boston Consulting Matrix helps companies categorize their products by market share and growth potential. From there, they can adjust their marketing mix to capture more market share (which will in turn affect the market growth rate). 

Marketing Mix vs. Marketing Strategy

To distinguish between the marketing mix and marketing strategy, it’s important to understand the difference between tactics (marketing mix) and strategy (marketing strategy).

Tactics are short-term steps to sell a specific product to a specific, identified market. Strategy is the long-term, forward-thinking plan to address sales in the market. The strategy to reach the target market comes first, then the marketing mix develops to support the strategy. 

For example, Progressive Insurance's strategy appears to be to dominate the market for home and auto insurance by promising low prices. To do so, they use a recognizable spokesperson (Flo), television commercials, search engine marketing, and social media marketing.

Why Marketing Mix Is Important

Marketers live by the axiom, “Don’t put all your eggs in one basket.” They never like to put all their promotional dollars into one marketing tactic – no matter how promising it seems. 

When developing a marketing mix, they increase the chance of reaching more people in the target market at the right time (and the right place). It is the confluence of these elements – right product, right time, right place, right person – that results in a sale.

Using a Marketing Mix to Get Ahead of the Competition

Using the four P’s, seven P’s, Boston model, or other models is a tool to help achieve the confluence of elements. No matter which marketing mix model is used, the end goal remains the same: to make sales. Models simply help marketing managers think through the many steps needed to select the appropriate marketing tactics to sell products.