The marketing mix is also known as the 4 p’s of marketing- product, price, place and promotion. From time to time you will also hear people add other p’s to these four, but these were the original’s and those that most marketing professionals believe are the most important.
Most of this is going to sound self-explanatory, so bear with me during this explanation:
Product: Don’t worry if your business doesn’t have a hard good product like this title suggests. In this case, product refers to whatever your business sells to the public. That can be a hard product or a service provided. Assume that if you provide a service that you can still work with the marketing mix formula.
Remember when you are talking about your product (or service) it includes all facets that the end user will enjoy. So if your product includes a service (you sell a product that also requires maintenance) then consider this in the mix.
If you have the opportunity to make yourself stand out by being different with your product or service, by all means, do so. It is easier to market a product that stands out from its competitors than one that is like all of the others, commonly referred to as a commodity. Even a product that is like everyone else’s can stand out if the service behind it is unique in its excellence.
Price: Most businesses agonize over the price of their product or service. It isn’t good to charge too much and you can’t make money if you charge too little. The best way to determine a price point is to accurately figure the cost of either manufacturing, purchasing or providing it. When you have a precise number for this, anything above it results in a profit.
The problem most businesses have in figuring an accurate cost of goods sold is that they don’t include everything in the cost. Nothing your business does is outside the cost of doing business. When you are just starting a business some of these numbers have to be estimated, but this estimate can also be based on industry standards. The research to find out what these are is worth your time.
Using your competition in determining a price is also helpful. But be careful you don’t fall in the trap of only using your competitor as the determination for your price. If your product or service is differentiated in any way (which hopefully it is-more to market that way) your costs may be different.
Place: This has taken on a completely new meaning in the last few years. Years ago, it simply meant the store where your product could be purchased. Now it is almost limitless. Not only can you have a storefront, but you can use a Web site, ebay, mail, trade show, parties, and the list goes on.
Keep an open mind when you look at how your product or service is sold or traded. You may have multiple avenues that can all be used effectively. These different paths for distribution are referred to as channels. Choose your channels wisely and greater success will be achieved.
Promotion: Getting the word out about your product or service is important. The world of marketing has many places and ways to tell your target market what you do.
In fact, some people get confused with all of the choices. The best way to start is with the simple ones. If you make it too difficult, you may get frustrated. You can continually add to your marketing efforts. If you are a small retailer, then advertising and direct mail are still very effective. A manufacturer working through a large channel of distributors can use direct mail, email and trade magazine ads.
If you are wondering what the point of the marketing mix is then you aren’t alone. The key to knowing and studying the above four p’s is how you optimize them together. No one part is more important than the others. It is finding the right combination that is important.
These four elements must be included and considered in the development of a strong marketing plan. When a major change is made in any of these factors it is considered to be strategic. For instance, many magazines added online editions over the last few years. Now some of them no longer have a print edition. They have converted the entire publication to online. This would be a major strategic move.
If a slight change is made this is considered tactical. Rather than charging $13.50 for your product, you decide to charge $12.99. Not a huge change, but something that you feel will benefit sales.
A large change in the marketing mix would be strategic. An example of this would be completely changing or adding to the distribution of your product. This change would affect the other p's in the mix.Now you understand the Marketing Mix. Simple, but important to the strategic decision-making process.
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