“Marketing mix” is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market.Marketing mix is often synonymous with the four Ps: price, product, promotion, and place.
It simply means Putting the right product in the right place, at the right price, at the right time.
To create the right marketing mix, businesses have to meet the following conditions:
- The product has to have the right features for example, it must look good and work well.
- The price must be right. Consumer will need to buy in large number to produce a healthy profit.
- The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation.
- The target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output.
FOUR PS OF MARKETING
The major marketing management decisions can be classified in one of the following four categories:
- Place (distribution).
These variables are known as the 4 P’s of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market.
1) Product: As the product is the item being sold to the customer, the thing that will bring in money, its features and design need careful consideration. Whether the firm is manufacturing the product or purchasing the product for resale, they need to determine what product features will appeal to their target market.
The product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not the responsibility of the marketing function. However, it is concerned with what the product means to the customer.
Marketing therefore plays a key role in determining such aspects as:
- The appearance of the product – in line with the requirements of the market.
- The function of the product – products must address the needs of customers as identified through market research.
2) The price: The price is the amount a customer pays for the product. The price is very important as it determines the company’s profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.
When setting a price, the marketer must be aware of the customer’s perceived value for the product. Three basic pricing strategies are: market skimming pricing, market penetration pricing and neutral pricing. The ‘reference value’ (where the consumer refers to the prices of competing products) and the ‘differential value’ (the consumer’s view of this product’s attributes versus the attributes of other products) must be taken into account.
3) The place: ‘Place’ is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It may be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers.
4) Promotion: Promotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service.
Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion.
Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and this includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations.
The marketing environment is a term that is used to collectively identify all the elements that have some impact on the actual performance of a market. This includes events and factors that occur within the context of the market itself and also any elements that are based outside the market. The idea behind defining the market environment is to understand what forces are exerting some amount of influence in the marketplace and understand why and how a market reacts to those forces in certain ways.
The environments in which you will have to market your new product are a major factor in determining your strategy. In a real-life marketing plan you would spend a solid amount of time researching these environments.
The marketing environment is everything an organisation must take into consideration when developing and presenting a new product.
FACTORS AFFECTING MARKETING ENVIRONMENT
Marketing environment is made up of all the factors and forces that influence marketing. These forces can be internal like departments (other than marketing such as finance department and human resource department) or external like competitors, suppliers, economic or political situation. To understand them better, marketing personals divide them in two categories namely macro environment and micro-environment.
1) Micro-environment: The micro environment refers to the forces that are close to the company and affect its ability to serve its customers. The factors are:
(a) Suppliers: The suppliers to a firm can also alter its competitive position and marketing capabilities. These are raw material suppliers, energy suppliers, suppliers of labour and capital.
The bargaining power of the supplier gets maximized in the following situations:
- The seller firm is a monopoly or an oligopoly firm.
- The supplier is not obliged to contend with other substitute products for sale to the buyer group.
- The buyer is not an important customer.
- The suppliers’ product is an important input to the buyer’s business and finished product.
- The supplier poses a real threat of forward integration.
(b) Market Intermediaries: Every producer has to have a number of intermediaries for promoting, selling and distributing the goods and service to ultimate consumers. These intermediaries may be individual or business firms. These intermediaries are middleman (wholesalers, retailers, agents, etc.), distributing agency market service agencies and financial institutions.
(c) Customers: The customers may be classified as :
- Ultimate customers: These customers may be individual and householders.
- Industrial customers: These customers are organisations which buy good sand services for producing other goods and services for the purpose of earning profits or fulfilling other objectives.
- Resellers: They are the intermediaries who purchase goods with the view to resell them at a profit. They can be wholesalers, retailers, distributors, etc.
- Government and other non-profit customers: These customers purchase goods and services and make them available to those for whom they are produced, for their consumption in most of the cases.
- International customers: These customers are individual and organizations of other countries who buy goods and services either for consumption or for industrial use. Such buyers may be consumers, producers, resellers, and governments.
- Competitors: Competitors are those who sell the goods and services of the same and similar description in the same market. Apart from competition on price, there is likely tobe product differentiation. Therefore, it is necessary to build an efficient system of marketing. This will bring confidence and better results.
- Public: It is duty of the company to satisfy the people at large along with its competitors and the consumers. It is necessary for future growth. The actions of the company do influence the other groups forming the general public for the company. A public is defined as ‘any group that has an actual or potential interest in or impact on a company’s ability to achieve its objective. Public relations are certainly a broad marketing operation which must be fully taken care of.
2) Macro-environment: The macro marketing environment takes into account all factors that can influence an organisation, but are outside of their control. These are: political, economic, socio-cultural and technological.
- The political environment: These include all laws, government agencies and lobbying groups that influence or restrict individuals or organisations. It is important for marketers to be aware of these restrictions as they can be complex. Some products are regulated by both state and federal laws. There are even restrictions for some products as to who the target market may be, for example, cigarettes should not be marketed to younger children. There are also many restrictions on subliminal messages and monopolies. As laws and regulations change often, this is a very important aspect for a marketer to monitor.
- The economic environment: Consists of all factors-such as salary levels, credit trends and pricing patterns that affect consumer spending habits and purchasing power. This refers to the purchasing power of potential customers and the ways in which people spend their money. The four stages of the economy cycle thorough prosperity, recession, depression and recovery. Consumers spend more during the prosperity stage than in the depression stage, which is when the lowest amount of consumer spending takes place. Your marketing campaign, product offerings, and pricing must be taken into account for the current economic cycle to be successful.
- The socio-cultural environment: Includes institutions and other forces that affect the basic values, behaviours, and preferences of the society-all of which have an effect on consumer marketing decisions.
- The technological environment: Is perhaps one of the fastest changing factors in the macro environment. This includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards. As these markets develop it can create new markets and new uses for products. It also requires a company to stay ahead of others and update their own technology as it becomes outdated. They must be informed of trends so they can be part of the up coming events rather than becoming outdated and suffering the consequences financially.