What did we cover?

It must be the MOST fundamental of all marketing concepts, behold… the marketing mix! I have touched on this in a previous blog, however this was centred around the digital tools within the marketing mix. This blog outlines the key considerations when outlining your organisation’s marketing mix.

 

The marketing mix

It’s made up of the famous 4P’s which consist of product, price, promotion and place. The marketing mix was put into place to assist marketers with the how, where, and what, they should be selling their product or services for. These 4P’s are the tactics that us marketers use to meet the needs of stakeholders. Each P can be broken down into its own mix of activities:

 

Product:

This mix is about understanding how decision making takes place for new product development, what products a company should keep and of course, which products should get the sack (discontinued). Another important part of this mix is deciding what can be done to maintain your product. Modifications of existing products mean you can keep up with the pace of changing customer needs and the external environment.

• Products will fall into categories, whether they are consumer or business to business marketing. These categories consist of convenience goods, shopping goods, speciality goods, raw goods, components, supplies, accessories, and installations. Here’s a good blog on the product classes if you wish to find out more.
• There are different levels to a product or service when talking about its value, the ‘bundle of benefits’ or ‘total product benefit’ CIM like to say. It starts with the core product; which will benefit the consumer, for example with the use of a mobile phone, the core product would be communication. The next level of value is described as actual product, this is the value of the features and capabilities of the product/ service as well as any branding, packaging or design. For a mobile phone this could be the quality of the camera. The last added value of purchase is called the augmented product, this is all about the sales ‘after care’ if you wish, such as value through a product warranty, guarantee, customer service and support.
• This was a model that was introduced by marketers to help better understand exactly how a buyer adopts and engages with a new product or technology. I’ve previously written a blog about the diffusion model, and you can have a look here if you haven’t already.

 

Price:

No shock here, this is where the pricing policy is discussed, as well as the methods and tactics for pricing. The desired positioning of a product is often reflected by the price. In this section we have the consumer in mind when considering what the pricing strategy will be for the product. The quality of the product must be reflected in its price for consumers to feel like they are getting a fair deal. For example, a corner shop with hand written neon stars as pricing labels wouldn’t be very successful with a Waitrose pricing strategy…

• Company and marketing objectives should be reviewed when looking at the pricing strategy. This is because an organisation looking to grow their market share might need to initially reduce costs to get them where they want to be. Likewise, a company wanting to increase profits, will need to increase pricing.
• There are a few pricing methods to choose from, and what works best will vary depending on the industry and organisation you are in. Pricing tactics include product line pricing, which is where products are ‘stepped’ (increased) dependant on their production cost, benefits and features. The next pricing tactic is optional product pricing, this means adding the option of extras to a single item, for a car the extra option might mean paying more in return for heated seats. Product bundle pricing, is for when products are sold together at a reduced price such as a multi pack bag of crisps.
• Pricing strategies for a product or a portfolio of products include cost-plus pricing. This is a simple way of calculating the cost it took to produce the product and adding a fixed percentage for profit; this method does incorporate the marketing costs or efforts that went in to aiding the sale. Demand-based pricing is probably the consumers worst friend, this means marketers will set the price at what their research tells them that people are willing to pay. For cars, if the price goes up then people are likely to look elsewhere, but if your bus fare went up in price then for that unfortunate consumer they don’t really have another option and are more likely to pay the extra cost. Competitor pricing is when an organisation with match their competitors pricing. This includes when a company ‘matches’ the cost but at a slighter lower price for a competitive advantage. Psychological pricing, which I’m sure you will have seen everywhere, this is when you see a price at £99 – the trick is to make you think you are paying less.

 

Place:

Here is where we think about where we place our product for the best sales, how we might get the product to the consumer, and how much distribution costs will be. Selling directly to consumers, will be cheaper for the company per item sold. We also have to think about when intermediaries are involved, how this will affect how much we sell each product for, as it will need to include logistics such as storage and transport.

Sometimes the P’s will crossover, that is why price also comes into this element when we’re talking about distribution.

• Developing a distribution network will save you effort and time, while increasing opportunity when selling in bulk, however, it will mean you don’t make as much profit per sale. These are some of the channels you might choose. Agents, this includes manufacture’s agents, brokers, fundraising agents, and selling agents, they don’t tend to take title or ownership of the product but will receive a commission for being the intermediary. Distributors do usually take ownership of the good you’re selling, and this comes with a ‘handling fee’. However, not all distributors will directly deal with the consumer, in some cases you will be responsible for customer support. Wholesalers will support the sale with a wide range of functions such as promotions, storage, customer feedback, and credit control to name a few. Retailers are anything from corner shops to, high street shops and supermarkets, and will only deal with the end-consumer. Direct routes involve the manufacture directly dealing with either the business buying their product, or the end-consumer; rather than an intermediary.

 

Promotion:

This leads onto what promotion mix will be used to promote your product or service. Here we will decide the appropriate marketing mix for our specific target audience, the right messaging to use, and consistently using this message across all tools, while also selecting what media choice will be the most effective.

• There are far too many aspects of the promotion mix to dive into for this blog, but I wanted to highlight some if the key points that this section of the P’s cover. Advertising covers media such as radio, television, internet advertising, these media messages follow the DRIP methodology (differentiate, Remind, inform, and persuade – the consumer to buy). Public relations which is what companies do to get a message to a large reach of people; will help organisations to develop relationships with the key influencers in the media as well as stakeholders, it’s also used to counteract negative coverage. Direct marketing is one of the most personal form of marketing that the consumer will experience, and it includes SMS, email, TV selling, or any other channel where you directly meet your target audience. Sales promotion is designed to increase sales, it might include a discounted flight ticket for a holiday, the idea it to convince people to purchase when presented with an offer, it could also be about loyalty vouchers.

 

There it is, the marketing mix. All the tactics you need to reach and meet the needs of important stakeholders.