What Is Marketing Mix?
The definition of marketing mix can best be described as the combination of elements used to promote products or services. These variable elements are based upon the analysis of the “four P’s” of marketing: product, price, place, and promotion. Specific marketing tactics are then formed from the intersection of these four factors.
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 Does Marketing Mix Work?
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 (e.g. 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 are able to 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.
Marketing Mix Elements
Marketing mix elements (also known as tactics) 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).
Common Marketing Mix Tactics
Marketing mix elements 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).
What Are The Four Ps of Marketing?
Grasping the concept of the four P’s of marketing is essential since they fit together with the marketing mix to develop a marketing plan.
It always begins with an analysis of the product, the identification of a product’s benefits, and matching 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.
Place can occasionally be easy to find. 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.
Example of Marketing Mix
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 might look like this:
Marketing Mix Examples of Companies
The following real-world marketing mix strategy examples focus on companies that have chosen 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.
Another example of marketing mix is Tiffany & Co. applying product as their competitive edge. Their signature diamond cut (called a “Tiffany True Cut”) is only available at their store. The “Tiffany Blue” of their packaging is so distinctive that the Pantone Company has even 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 the 4 P’s were introduced in the 1960s, others have used it to create their own marketing mix strategies. This includes the 7 P’s model and the Boston Consulting Group Matrix.
What Are The 7 Ps?
The 7 Ps of Marketing add three additional areas to evaluate the marketing mix, including:
The Boston Consulting Group Matrix
The Boston Consulting Group Matrix assumes 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.
The Boston Consulting Group Matrix works off of a four-grid system that 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.
Note: Boosting marketplace growth isn’t always possible if markets are oversaturated and provide little room for expansion.
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
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
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
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'
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.
Marketing Strategy vs. Marketing Mix
It’s important to understand the difference between marketing strategy and marketing tactics (marketing mix).
Strategy is the long-term, forward-thinking plan that addresses sales in the market. The strategy to reach the target market comes first. Then, the marketing mix (tactics) is developed to support the strategy and sell a specific product to a specific, identified market.
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.” It's never wise to put all of your promotional dollars into one marketing tactic – no matter how promising it seems.
Developing a marketing mix increases the chance of reaching more people in the target market. It is the confluence of these elements – right product, right time, right place, right person – that results in a sale.
How to Use a Marketing Mix to Get Ahead
Whether using the four P’s, seven P’s, or the Boston model, the end goal is the same: to make sales. Models simply help marketing managers think through the many steps to choose the appropriate marketing tactics.