What Is Marketing Mix?
Marketing mix refers to the combination of elements used to promote products or services. These elements vary, based upon the analysis of the four main factors that influence marketing, which are referred to as the “four P’s” of marketing: product, price, place, and promotion. 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 the exact same way. Therefore, marketing managers develop product marketing plans based upon 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 develop a strategy and the tactical plan necessary to achieve said strategy. The marketing mix becomes part of the tactical plan, describing the elements that will achieve the product’s sales goals.
The Elements of the Marketing Mix
The elements 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).
The elements of the marketing mix (also called the tactics) 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
- 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 may use different marketing mixes in the hope of reaching a slightly different target market (or covering part of the market not reached by competitors).
The Four Ps of Marketing
Grasping the concept of the four P’s of marketing is essential since the two work together to develop into a marketing plan.
Product forms the cornerstone of the four P’s of marketing. Even the best marketing mix can fail if the underlying product concept is faulty. Building exceptional products is essential to the success and profitability of any company.
A deep and thorough analysis of the product itself is the first step. Marketers examine the product’s features, benefits, and advantages over the competition. They conduct competitive analysis to discover differentiating features of their products that they can highlight in their marketing materials. They may also conduct market research to discover the elements that customers find most appealing about their products.
Pricing products is both a science and an art. The price point for any product must be profitable for the company, 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, examining what prices the target market is willing to pay, and leveraging the psychological impact of price.
Have you ever noticed that “bargain” priced items end in unusual numbers? For example, Home Depot’s prices and in unusual numbers. Grass may sell for $52.58 per pallet, or wood may be priced at $7.98 for a 2” x 4” x 8”.
Psychological pricing tactics utilize human psychology as part of the marketing mix. Bargain pricing ends in unusual numbers (such as Home Depot’s prices often ending in 8) while luxury prices end in 0.
Depending on the target audience and the brand strategy, the final price point chosen as part of the product’s marketing mix may be a luxury price, a bargain price, or somewhere in-between.
Place in the marketing mix is the space where consumers engage with products. That 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, from supermarkets to convenience stores, restaurants, food trucks, events...the list is much longer than for golfers.
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.
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.
How the 4 Ps Work
The four P’s work in tandem and culminate in the selection of the promotional or marketing mix. The marketing mix always begins with an analysis of the product itself. It is the identification of a product’s benefits, then matching the target audience’s needs to guide the rest of the strategy (including choosing the appropriate price and where to promote the product).
Marketing Mix Example
Jane is a marketing manager for Simple Smartphone, a new smartphone developed for older people. Market research has revealed that people ages 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:
Who Developed Marketing Mix?
The term marketing mix was coined in the 1950s by Neil Borden, an advertising professor at Harvard University. A second professor, E. Jerome McCarthy, from Michigan State University, used Borden’s marketing mix concept as a springboard to build out the four P’s of marketing. From there, the concept spread, and others developed additional marketing mix strategies to help companies define and refine their marketing programs.
Other Marketing Mix Strategies
Since McCarthy came up with the four P’s in the 1960s, others have added to it and created their own marketing mix strategies. Two popular ones are the 7 P’s model and the Boston Consulting Group Matrix.
The 7 P’s of Marketing Mix
The 7 P Marketing Mix adds three additional areas to evaluate the marketing mix. The 7 P’s include:
The Boston Consulting Group Matrix
The Boston Consulting Group Matrix works from the assumption that identifying the type of customers that the product appeals to – then aligning the marketing strategy and mix to the customer type – is the most effective way to market products.
The Boston Consulting Group Matrix works off of a four-grid system. The grid system helps managers visualize where their products fall 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 boosting marketplace growth isn’t possible. Markets can be saturated, which means there is 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 that have low market growth rate but a relative 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. Why they have low market share is the question that needs to be solved. Can they be moved into the Star category or Cash Cow category? If not, 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 as a whole.
The strategy to reach the target market comes first. Then, the marketing mix develops to support the strategy.
For example, take Progressive Insurance: Their strategy appears to be to dominate the market for home and auto insurance by promising low prices. To dominate the market, they use a recognizable icon or spokesperson (Flo), television commercials, search engine marketing, and social media marketing.
Why Marketing Mix Is Important
There’s an old adage, “Don’t put all your eggs in one basket.” Marketers live by this axiom. They never like to put all their promotional dollars into one marketing tactic – no matter how promising it seems.
By 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.
How Marketing Mix Builds Competitive Edge
By differentiating any of the four factors in the four P’s marketing mix, for example, companies can build a significant competitive edge. If the difference is desirable enough to the target market, they’ll increase market share as more people buy their product.
Companies can also choose one of the four quadrants in the classic four P model (or one of the seven in the 7 P model) to focus on as their competitive edge.
Businesses Who Have Set Themselves Apart
Home Depot was previously mentioned as a company that uses psychological pricing as a factor to drive sales. Dollar Tree also leverages price as a factor by pricing everything in the store as $1 or lower, a strong signal to their target consumer that they’ll save money by shopping at Dollar Tree.
Tiffany’s jewelry store uses product as their competitive edge. Their signature diamond cut is called a “Tiffany True Cut” only available at their store. 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 a competitive edge in the marketing mix. Although they have memorable advertising, it’s their product design that sets them apart from all others.
These companies – and many others worldwide – have chosen to focus on one area of the marketing mix to use as their competitive advantage.
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.
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How can a marketing mix be improved?
Each element of the marketing mix can be tested, measured, and improved. Many companies implement regular testing strategies based on their marketing mix. They may analyze website data (including traffic, search, and response patterns), to find ways to tweak their marketing and improve it.
How are marketing mix and product life cycle related?
The marketing mix and a product’s life cycle are inexorably intertwined. New products need time and exposure to the target market to gain recognition and market share. Therefore, new product launches depend heavily on awareness campaigns.
The marketing mix for new product launches may lean heavily towards mass advertising via television and internet channels. Mature products with a clearly-defined target market may lean more towards direct response tactics, product tweaks, add-ons, and coupons to drive sales. Marketing mixes are constantly adjusted as products move through their life cycle to find the optimal mix that drives sales.
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