Pre Read: Marketing Mix

The term marketing mix was coined in an article written by Neil Borden called The Concept of the Marketing Mix. He started teaching the term after he learned about it from an associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients"; The marketer, E. Jerome McCarthy, proposed a four Ps classification in 1960, which has since been used by marketers throughout the world The marketing mix is a business tool used in marketing products. The marketing mix is often crucial when determining a product or brand's unique selling point (the unique quality that differentiates a product from its competitors).

[A] 4 Ps of Marketing
When marketing their products firms need to create a successful mix of: The right product Sold at the right price In the right place Using the most suitable promotion.

Marketing Mix is a combination of marketing tools that a company uses to satisfy their target customers and achieving organizational goals. McCarthy classified all these marketing tools under four broad categories: Product Price Place Promotion

These four elements are the basic components of a marketing plan and are collectively called 4 Ps of marketing. 4 Ps pertain more to physical products than services. Below is an illustration for marketing mix.

1. Product
Product is the actual offering by the company to its targeted customers which also includes value added stuff. Product may be tangible (goods) or intangible (services). While formulating the marketing strategy, product decisions include: What to offer? Brand name Packaging Quality Appearance Functionality Accessories Installation After sale services Warranty

2. Price
Price includes the pricing strategy of the company for its products. How much customer should pay for a product? Pricing strategy not only related to the profit margins but also helps in finding target customers. Pricing decision also influence the choice of marketing channels. Price decisions include: Pricing Strategy (Penetration, Skim, etc) List Price payment period Discounts Financing

 Credit terms Using price as a weapon for rivals is as old as mankind. but its risky too. Consumers are often sensitive for price, discounts and additional offers. Another aspect of pricing is that expensive products are considered of good quality.

3. Place (Placement)
It not only includes the place where the product is placed, all those activities performed by the company to ensure the availability of the product tot he targeted customers. Availability of the product at the right place, at the right time and in the right quantity is crucial in placement decisions. Placement decisions include: Placement Distribution channels Logistics Inventory Order processing Market coverage selection of channel members

4. Promotion
Promotion includes all communication and selling activities to persuade future prospects to buy the product. Promotion decisions include: Advertising Media Types Message Budgets Sales promotion Personal selling Public relations Direct marketing

As these costs are huge as compared to product price, So its good to perform a break-even analysis before allocating the budget. It helps in determining whether the new customers are worth of promotion cost or not. It often takes time and requires market research to develop a successful marketing mix. You should not depend on one mix always try new mixes. While designing the mix, make changes to all mixes in such a way that all conveys the same message. Dont confuse your customers by just changing one variable and keeping the rest same.

Limitation of Marketing Mix

Marketing mix (4 Ps) was more useful in early 19s when production concept was in and physical products were in larger proportion. Today, with latest marketing concepts, marketing environment has become more integrated. So, in order to extend the usefulness of marketing mix, some authors introduced a fifth P and then seven Ps (People, Packaging, Process). But the foundation of Marketing Mix still stands on the basic 4Ps.

Example with respect to Maruti's SWIFT Product: Initial launch version with basic features in Lxi/Vxi/Zxi formats Price: At 4.84 lacs (on road Mumbai) much lower than other competitors in the B + segment. Promotion: High decibel campaign kicked-off during the Football Worldcup 2006.The campaign emphasized the curvy sports car hatchback design targeting sport lover youth segment. Place: Selective distribution initially based on order-booking only in select cities and only through company dealerships. Dealers carry no inventory. Long delivery cycle time

[B] Extended Ps of marketing

Booms and Bitner included three additional 'Ps' to accommodate trends towards a service or knowledge based economy:

People

Process

Physical Evidence

5. People All people who directly or indirectly influence the perceived value of the product or service, including knowledge workers, employees, management and consumers. 6. Process Procedures, mechanisms and flow of activities which lead to an exchange of value. 7. Physical evidence The direct sensory experience of a product or service that allows a customer to measure whether he or she has received value. Examples might include the way a customer is treated by a staff member, or the length of time a customer has to wait, or a cover letter from an insurance company, or the environment in which a product or service is delivered

[C] 4 Cs of Marketing
Robert F. Lauterborn proposed a four Cs classification in 1993[5] which is more consumeroriented version of the four Ps that attempts to better fit the movement from mass marketing to niche marketing:

The traditional Marketing mix is a 4 Ps model and is business oriented. The 4 Cs model of marketing on the other hand is more consumer oriented. Because of its focus on consumers, the 4 Cs model is mainly used for Niche Marketing. However, just like the traditional marketing mix, it can also be used for mass markets. The four variables in the 4 Cs model are Consumer Cost Convenience Communication

Consumer The principle of four Cs of marketing states that your customer should be your prime focus. Unlike the traditional marketing mix where the primary focus is on Products, in the 4 Cs model, the primary focus is on the customer. Thus the companies which follow this model believe in making products which satisfy their customers. They are generally ready to offer customizable products and because they have a general set of target customers, this principle is only applicable for smaller market segments and not for mass markets. For mass markets, the traditional marketing mix can be used. Cost Cost is equivalent to Pricing in the traditional marketing mix. Cost is a very important consideration during consumer decision making and hence in the 4 Cs principle, the cost variable is given special attention. The 4 Cs model generally plans on the basis of Customers and not products. And hence they have to plan the cost of the product on the basis of their customer. If you are targeting a SEC A segment, then the costing of the product needs to be premium to have proper psychological positioning. On the other hand, if your product is for the SEC B and SEC C classes, then it needs to have a lower costing. Thus over here, costing of the product depends on the customer. Communication The concept of communication remains same for both, the traditional marketing mix as well as for the 4 Cs of marketing. Off course, the marketing communications for a company following the 4 Cs of marketing is completely different as it needs a completely different Segmentation, targeting and positioning. As said before, the 4 Cs of marketing are generally used for Niche products. The media vehicles used for marketing communications for a mass product and that for a niche product are different. A niche marketing company might use more of BTL rather than ATL whereas in a mass marketing company, ATL communications are very important. Convenience Convenience is equivalent of distribution or placement of the traditional marketing mix. When you have a niche customer base, the convenience of the customer in acquiring your product plays a critical role. Take a niche product like Heavy machinery as an example or even products like television and air conditioners. What if the companies who sell these products do not give you delivery and installation. You will not buy the product as you wont be ready to pick up the machine and install it yourself. You will be looking out for your own convenience. Thus convinience, like distribution, plays a critical role. The customer will not buy your product if it is not convenient to him.

All in all, the traditional marketing mix model helps a company define its strategy more efficiently. However, the 4 Cs model, although not much different, really helps if you are a customer oriented firm.

[D] 4 As of Marketing
The 4 As of marketing has been coined by Prof. Prof Jagdish Sheth, Rajendra Sisodia. Acceptability, Affordability, Accessibility and Awareness. Taken together, these attributes are called the "4As." The 4A framework derives from a customer-value perspective based on the four distinct roles that customers play in the market: seekers, selectors, payers and users. For a marketing campaign to succeed, it must achieve high marks on all four As, using a blend of marketing and non-marketing resources. The 4A framework helps companies create value for customers by identifying exactly what they want and need, as well as by uncovering new wants and needs. (For example, none of us knew we "needed" an iPad until Apple created it.) That means not only ensuring that customers are aware of the product, but also ensuring that the product is affordable, accessible and acceptable to them.

Awareness

Affordability

Acceptability

Accessibility

[D] Comparison of 4 p, 4 c , 4 A and 4 os of Marketing

Four Cs Customer Needs: Identifying customers' problems and how the company can solve them by developing the product. Four As Acceptability: The product should be socially and legally accetable as well as attractive and fashionable. Four Os Four Ps

Objects: The way the product is manufactured as well as its level of quality.

Product

Cost to Customer: Determining the cost of the product that the customer will perceive as fair.

Affordability: The product should be available at a price that the customer can affort to pay.

Objectives: Considerations about the revenue the company should generate and the price at which this revenue objective should be met.

Price

Convenience: Making the product available to customers without their having to make an effort. Communication: Ways the company will use to get their message about the product across to the customer.

Accessibility: The product should be conveniently accessible even for people with disabilities.

Organization: Sale and distribution of the product; determining Place the destribution methods to be used.

Awareness: As many people should know about the product as possible.

Operations: Promotional operations that most suit the product, such as telemarketing, direct mail etc.

Promotion