Understanding the Marketing Mix Concept – 4Ps By Martin

Source: https://www.cleverism.com/understanding-marketing-mix-concept-4ps/

August 5, 2014
Cleverism Magazine

Marketing is simplistically defined as ‘putting the right product in the right place, at the right price, at the right time.’ Though this sounds like an easy enough proposition, a lot of hard work and research needs to go into setting this simple definition up. And if even one element is off the mark, a promising product or service can fail completely and end up costing the company substantially.

The use of a marketing mix is an excellent way to help ensure that ‘putting the right product in the right place,…’ will happen. The marketing mix is a crucial tool to help understand what the product or service can offer and how to plan for a successful product offering. The marketing mix is most commonly executed through the 4 P’s of marketing: Price, Product, Promotion, and Place.

These have been extensively added to and expanded through additional P’s and even a 4C concept. But the 4Ps serve as a great place to start planning for the product or even to evaluate an existing product offering.

In this article, we will look at 1) the four P’s, 2) history of the marketing mix concept and terminology, 3) purpose of the marketing mix, 4) key features of the marketing mix, 5) developing a marketing mix, 6) key challenges, and 7) marketing mix example – Nivea.

THE FOUR P’S

Product

The product is either a tangible good or an intangible service that is seem to meet a specific customer need or demand. All products follow a logical product life cycle and it is vital for marketers to understand and plan for the various stages and their unique challenges. It is key to understand those problems that the product is attempting to solve. The benefits offered by the product and all its features need to be understood and the unique selling proposition of the product need to be studied. In addition, the potential buyers of the product need to be identified and understood.

Price

Price covers the actual amount the end user is expected to pay for a product. How a product is priced will directly affect how it sells. This is linked to what the perceived value of the product is to the customer rather than an objective costing of the product on offer. If a product is priced higher or lower than its perceived value, then it will not sell. This is why it is imperative to understand how a customer sees what you are selling. If there is a positive customer value, than a product may be successfully priced higher than its objective monetary value. Conversely, if a product has little value in the eyes of the consumer, then it may need to be underpriced to sell. Price may also be affected by distribution plans, value chain costs and markups and how competitors price a rival product.

Promotion

The marketing communication strategies and techniques all fall under the promotion heading. These may include advertising, sales promotions, special offers and public relations. Whatever the channel used, it is necessary for it to be suitable for the product, the price and the end user it is being marketed to. It is important to differentiate between marketing and promotion. Promotion is just the communication aspect of the entire marketing function.

Place

Place or placement has to do with how the product will be provided to the customer. Distribution is a key element of placement. The placement strategy will help assess what channel is the most suited to a product. How a product is accessed by the end user also needs to compliment the rest of the product strategy.

The Marketing Mix

Neil Borden - The Concept Of The Marketing Mix - Artigo original de 1949 from W. Gabriel de Oliveira

HISTORY OF MARKETING MIX CONCEPT AND TERMINOLOGY

The marketing mix concept gained popularity following an article titled “The Concept of the Marketing Mix” by Neil Borden published in 1964. Borden explained how he started using the term inspired by James Culliton who in the 1940s described the marketing manager as a ‘mixer of ingredients.’ Borden’s article detailed these ingredients as product, planning, price, branding, distribution, display, packaging, advertising, promotions, personal selling among many others. Eventually E. Jerome McCarthy clustered these multiple items into four high level categories that we now know as the 4 P’s of marketing. “Its elements are the basic, tactical components of a marketing plan”. Together, elements in these four categories help develop marketing strategies and tactics.

PURPOSE OF MARKETING MIX

The 4P’s were formalized and developed over the years by experts to ensure the creation and execution of a successful marketing strategy. Through the use of this tool, the attempt is to satisfy both the customer and the seller. When properly understood and utilized, this mix has proven to a key factor in a product’s success.

KEY FEATURES OF MARKETING MIX

Interdependent variables

The marketing mix is made up of four unique variables. These four variables are interdependent and need to be planned in conjunction with one another to ensure that the action plans within all four are complimentary and aligned.

Help Achieve Marketing Targets

Through the use of this set of variables, the company can achieve its marketing targets such as sales, profits, and customer retention and satisfaction.

Flexible Concept

The marketing mix is a fluid and flexible concept and the focus on any one variable may be increased or decreased given unique marketing conditions and customer requirements.

Constant Monitoring

It is vital to keep an eye on changing trends and requirements, within the company as well as in the market to ensure that the elements in marketing mix stays relevant and updated.

Role of Marketing Manager

A mature, intelligent and innovative marketing manager needs to be at the helm of the marketing mix. This pivotal role means that this manager is responsible for achieving desired results through the skill manipulation of these variables.

Customer as a focal point

A vital feature of the marketing mix is that the customer is the focal point of the activity. The value of the product is determined by customer perceptions and the goal is to achieve a satisfied and loyal customer.

This video shows how you can create value by using the marketing mix.

DEVELOPING A MARKETING MIX

Intuition and creative thinking are essential job requirements for a marketing manager. But relying on just these can lead to inaccurate assumptions that may not end up delivering results. To ensure a marketing mix that is based in research and combines facts with innovation, a manager should go through the following systematic process:

Step 1: Defining Unique Selling Proposition

The first item on the marketing manager’s agenda should be to define what the product has to offer or its unique selling proposition (USP). Through customer surveys or focus groups, there needs to be an identification of how important this USP is to the consumer and whether they are intrigued by the offering. It needs to be clearly understood what the key features and benefits of the product are and whether they will help ensure sales.

Step 2: Understanding the Consumer

The second step is to understand the consumer. The product can be focused by identifying who will purchase it. All other elements of the marketing mix follow from this understanding. Who is the customer? What do they need? What is the value of the product to them? This understanding will ensure that the product offering is relevant and targeted.

Step 3: Understanding the Competition

The next step is to understand the competition. The prices and related benefits such as discounts, warranties and special offers need to be assessed. An understanding of the subjective value of the product and a comparison with its actual manufacturing distribution cost will help set a realistic price point.

Step 4: Evaluating Placement Options

At this point the marketing manager needs to evaluate placement options to understand where the customer is most likely to make a purchase and what are the costs associated with using this channel. Multiple channels may help target a wider customer base and ensure east of access. On the other hand, if the product serves a niche market then it may make good business sense to concentrate distribution to a specific area or channel. The perceived value of the product is closely tied in with how it is made available.

Step 5: Developing Communication / Promotion strategy

Based on the audience identified and the price points established, the marketing communication strategy can now be developed. Whatever promotional methods are finalized need to appeal to the intended customers and ensure that the key features and benefits of the product are clearly understood and highlighted.

Step 6: Cross-check of the Marketing Mix

A step back needs to be taken at this point to see how all the elements identified and planned for relate to each other. All marketing mix variables are interdependent and rely on each other for a strong strategy. Do the proposed selling channels reinforce the perceived value of the product? Is the promotional material in keeping with the distribution channels proposed? The marketing plan can be finalized once it is ensured that all four elements are in harmony and there are no conflicting messages, either implicit or explicit.

Marketing Mix Development

KEY CHALLENGES

Over the years, marketing managers have felt that the traditional marketing mix has its limitations in how it is structured. Several important elements have been grouped within four larger categories thereby belittling their true importance amid several factors. Two main criticisms and their solutions:

Lack of Focus on Services

The conventional marketing mix tends to be applicable to tangible goods i.e. the traditional definition of products. Services or intangible goods are also a vital customer offering and can be planned for in much the same way as physical products. To cater to the unique challenges of services, the 4P model has been supplemented with 3 additional categories which are:

Physical Evidence is proof and a reassurance that a service was performed
People are the employees who deliver the service
Processes are the methods through which a service is executed and delivered to the customer

Lack of True Customer Focus

Though a total focus on the customer and what they desire is a vital element of the 4P model, this truth is often in danger of being overlooked by enthusiastic marketing teams. To counter this, Robert F. Lauterborn put forward his customer centric four Cs classification in 1990. This model converts the four P’s into more customer oriented four C’s:

Product to Customer Solution
Price to Customer Cost
Promotion to Customer Communication
Place to Customer Convenience

MARKETING MIX EXAMPLE – NIVEA

The Company

NIVEA is a well-known company that is in the high quality skin and beauty care product market. NIVEA is one the brands manufactured and sold by Beiersdorf, which was established in 1882. In UK, the company has always focused on ensuring availability of their products to as many people as possible. In addition, the company has always strived to understand the varied needs of its vast consumer base and bring as many specific products to market as possible.

Marketing mix for new product line

Market research revealed an opportunity in the market for a younger customer base. This led to the launch of Nivea Visage Young in 2005. This product was developed for girls in the 13 to 19 year age range.

For the eventual launch of the product, the company needed to develop a balanced and relevant marketing mix to appeal to its young audience. Through its initial launch in 2005 to a subsequent re launch in 2007, the company focused closely on the marketing mix balance to help ensure that all elements of the product appeal to the target audience to achieve success.

Product

The company put significant importance in ongoing research to understand the constantly evolving market and consumer dynamics. This knowledge has helped the company develop more innovative new products that fulfill consumer needs. Through this research, it became clear that younger consumers wished for a more specific product that addressed the skin needs of their age category. The need was for a product that offered a beautifying regime for daily use rather than a medicated product that targeted specific skin problems. The latter were abundantly being offered by competition. The product was subsequently redesigned to meet these specialized requirements.

From the company’s perspective, some of the changes helped meet its commitment to the environment which included more efficient packaging to reduce waste, the use of more natural products and the use of recyclable plastic.

Price

An effective pricing strategy takes into account the product’s perceived and actual values. The final price should be based on both these in order to make the product attractive to both buyer and seller. After its relaunch, Nivea Visage Young was priced a little higher than before to account for the new formula, better packaging and extended range of products. Since the product as being bought by mothers for their daughters, it remained low enough to remain good value for money. Effective pricing means that sales from this product account for nearly 7 percent of all Nivea Visage sales.

Place

As mentioned, Nivea aims to have a wide reach for its products to ensure that it is easily available wherever needed by the extensive target market. The primary channels used are retail stores. High Street stores such as Boots and Superdrug account for nearly 65 percent of all sales. Another portion comes from grocery chain stores such as ASDA or Tesco. This covers young people making their own purchases (mostly high street), as well as their mothers buying for them (mostly grocery stores). These stores ensure a cost effective distribution channel that has a wide reach. The company manages its own cost by selling to wholesalers rather than directly to smaller stores. It also does not sell online directly, but the product is sold through stockists.

Promotion

Nivea’s has always tried to base its promotions on the actual lifestyle of its target market. The company does not find above the line promotions to be very effective as these are one way communications through TV for example. Instead, the promotion is more consumer led through different below the line solutions. Sample sales are a key activity that allows consumers to try out the actual product. There is also an interactive online magazine FYI (fun, young, independent) to increase product visibility and association. The company has also maintained a strong social media presence on popular social media networks. This used of new media has ensured a better brand awareness and association among target audience.

Conclusion

Through its successful use of a balanced marketing mix, Nivea Visage Young has managed to create a clear position in the market. It addresses a need felt by a specific niche segment. Traditional distribution methods are balanced by a unique product and updated promotional strategies. This ensures that the brand message reaches the right people at the right time in the right way.

As we see from the Nivea example, it is vital for any company to focus equally on all elements of the marketing mix while planning for a product. Eventually, there may be a need to divert more resources towards one variable such as strong distribution channels over promotional activities. But this needs to come after a clear plan and strategy has been decided upon. An effective marketing mix can mean the difference between a flash in the pan product or one that is bound to become a well-loved classic.

Move Over 4Ps – Revealing the Better Marketing Mix! By Elaine Fogel

Source: http://www.business2community.com/marketing/move-4ps-revealing-better-marketing-mix-01470829

March 1, 2016

How long have we been using the 4Ps of marketing? Marketer E. Jerome McCarthy proposed a 4Ps classification in 1960 – 56 years ago! Maybe it’s time for an overhaul?

First, let’s understand the 4Ps so we can improve upon them. In my book, Beyond Your Logo: 7 Brand Ideas That Matter Most For Small Business Success, I describe them this way:

PRODUCT

“What your business sells to its target audiences (includes name, brand identity, appearance, packaging, functions, features, benefits).”

PRICE

“How you price your goods and services (value, discounts, seasonal, sale pricing).”

PLACE

“Where you sell your company’s goods and services (distribution, locations, inventory, shipping).”

PROMOTION

“How you promote your goods and services to target market segments (advertising, sales, public relations, marketing communications).”

I suppose it’s OK and can still work, but for smaller businesses (or nonprofit organizations), simpler is better. So, I developed a better marketing mix. (I know, you’ll be the judge.)

Here’s my explanation:

“Because marketing is no longer about ‘pushing’ messages out to buyers by interrupting them to hear you, marketers can now directly engage with their target audiences, drawing them in through the different stages of the new sales cycle. First, prospective customers become aware of your business’ brand or its products and services. This may be the result of content marketing, word-of-mouth referrals, search engines, webinars, and other channels that attract their interest.

After prospective customers see the same messages in multiple channels, they may be more keenly interested in your business’ products or services. If they decide to explore more about your business, they can research review sites, browse your website, or ask others if they have heard of your company.

They can also contact your business to seek further information. That’s the perfect time for you (or sales people) to engage with prospects further, solving their problems and fulfilling their needs. If prospects are not interested at that moment, they may (or may not) bookmark your site or file your company information for future reference.

After prospective customers have completed their research, they then make a decision whether or not to make a purchase. If they do, they convert into customers and the relationship continues.

You want to thank these new customers, engage them, and give them reasons to stay loyal to your business. The ultimate goal is to earn their trust so they become one of your company’s brand ambassadors, tooting your horn for you.” (Beyond Your Logo: 7 Brand Ideas That Matter Most For Small Business Success ©2015, Elaine Fogel)

Since many smaller businesses can’t afford to hire marketing consultants or agencies, and many business owners have limited marketing knowledge, I will now reveal “the better marketing mix!”

My Marketing Mix Based on the 5Ws of Journalism:

WHO: To whom are you marketing? Identify your target audiences.
WHAT: What products or services are you promoting to each audience?
WHERE: Where are you marketing to each audience? Where are your products and services available? Which marketing communication channels are you using to reach out to each target audience?
WHEN: When are you marketing to each audience? What is the time frame for each tactic?
WHY: Why are you marketing to each audience? What is the associated strategy?

Here’s a matrix of this model with an example for a B2C cosmetics company. Please note that this represents the beginning of writing the mix and is by no means a complete matrix.

If you find that your marketing mix is heavier in one channel than in another, you may decide to drill down even further.

Example:

If you rely a lot on content or social media marketing, you can develop a separate, auxiliary plan for these channels. Of course, this will depend on having the time availability, inclination, and desire to go into more detail. However, it will be a valuable asset for evaluation purposes.

Once you complete the final marketing mix, you can add details to create your action plan. The action plan will guide you through the steps required to complete each marketing and/or branding tactic.

Whether you decide to adapt my 5Ws or not, the most important advice comes from author, Lewis Carroll:

“If you don’t know where you’re going, any road will get you there.”

Image licensed from CanStockPhoto

Author: Elaine Fogel

As an author, speaker, marketer, brand and customer experience evangelist, educator, and consultant, Elaine Fogel engages, entertains, and motivates audiences and readers with stories and lessons gleaned from her diverse career as a singer, educator, television show host, and marketing executive. In addition to contributing to Business2Community, she writes… View full profile ›

The Marketing Mix and the 4Ps of Marketing

Understanding How to Position Your Market Offering

Source: https://www.mindtools.com/pages/article/newSTR_94.htm

What are the 4Ps of Marketing?

The 4Ps of marketing is a model for enhancing the components of your ‘marketing mix’ – the way in which you take a new product or service to market. It helps you to define your marketing options in terms of price, product, promotion, and place so that your offering meets a specific customer need or demand.

What is marketing? The definition that many marketers learn as they start out in the industry is: Putting the right product in the right place, at the right price, at the right time.

It's simple! You just need to create a product that a particular group of people want, put it on sale some place that those same people visit regularly, and price it at a level which matches the value they feel they get out of it; and do all that at a time they want to buy. Then you've got it made!

There's a lot of truth in this idea. However, a lot of hard work needs to go into finding out what customers want, and identifying where they do their shopping. Then you need to figure out how to produce the item at a price that represents value to them, and get it all to come together at the critical time.

But if you get just one element wrong, it can spell disaster. You could be left promoting a car with amazing fuel economy in a country where fuel is very cheap, or publishing a textbook after the start of the new school year, or selling an item at a price that's too high – or too low – to attract the people you're targeting.

The marketing mix is a good place to start when you are thinking through your plans for a product or service, and it helps you to avoid these kinds of mistakes. In this article and in the video, below, we'll discover more about the marketing mix and the 4Ps, and how you can use them to develop a successful marketing strategy.

Watch this video to discover more about the Marketing Mix and the 4Ps of Marketing.

Understanding the Tool

The marketing mix and the 4Ps of marketing are often used as synonyms for one another. In fact, they are not necessarily the same thing.

"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. The 4Ps is one way – probably the best-known way – of defining the marketing mix, and was first expressed in 1960 by E. J. McCarthy.

The 4Ps are:

Product (or Service).
Place.
Price.
Promotion.

A good way to understand the 4Ps is by the questions that you need to ask to define your marketing mix. Here are some questions that will help you understand and define each of the four elements:

Product/Service

What does the customer want from the product/service? What needs does it satisfy?
What features does it have to meet these needs?
- Are there any features you've missed out?
- Are you including costly features that the customer won't actually use?
How and where will the customer use it?
What does it look like? How will customers experience it?
What size(s), color(s), and so on, should it be?
What is it to be called?
How is it branded?
How is it differentiated versus your competitors?
What is the most it can cost to provide and still be sold sufficiently profitably? (See also Price, below.)

Place

Where do buyers look for your product or service?
If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or direct, via a catalogue?
How can you access the right distribution channels?
Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send samples to catalogue companies?
What do your competitors do, and how can you learn from that and/or differentiate?

Price

What is the value of the product or service to the buyer?
Are there established price points for products or services in this area?
Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin?
What discounts should be offered to trade customers, or to other specific segments of your market?
How will your price compare with your competitors?

Promotion

Where and when can you get your marketing messages across to your target market?
Will you reach your audience by advertising online, in the press, on TV, on radio, or on billboards? By using direct marketing mailshots? Through PR? On the Internet?
When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch or subsequent promotions?
How do your competitors do their promotions? And how does that influence your choice of promotional activity?

Note

As the four Ps all need to be considered in relation to one another, it doesn't really matter in what order you define them. This is why you may find them quoted in a different order from the one used above. In particular, they're often referred to in the order "place, price, product, promotion."

The 4Ps of marketing is just one of many lists that have been developed over the years. And, whilst the questions we have listed above are key, they are just a subset of the detailed probing that may be required to optimize your marketing mix.

Amongst the other models that have been developed over the years is Boom and Bitner's 7Ps, sometimes called the extended marketing mix, which include the first 4Ps, plus people, processes and physical layout decisions.

Another approach is Lauterborn's 4Cs, which presents the elements of the marketing mix from the buyer's, rather than the seller's, perspective. It is made up of Customer needs and wants (the equivalent of product), Cost (price), Convenience (place), and Communication (promotion). In this article, we focus on the 4Ps model as it is the most well-recognized, and contains the core elements of a good marketing mix.

Using the 4Ps of Marketing

The model can be used to help you decide how to take a new offer to market. It can also be used to test your existing marketing strategy. Whether you are considering a new or existing offer, follow the steps below to help you to define and improve your marketing mix.

Start by identifying the product or service that you want to analyze.
Now go through and answer the 4Ps questions – as defined in detail above.
Try asking "why" and "what if" questions too, to challenge your offer. For example, ask why your target audience needs a particular feature. What if you drop your price by 5 percent? What if you offer more colors? Why sell through wholesalers rather than direct channels? What if you improve PR rather than rely on online advertising?

Tip:

Check through your answers to make sure they are based on sound knowledge and facts. If there are doubts about your assumptions, identify any market research, or facts and figures that you may need to gather.
Once you have a well-defined marketing mix, try "testing" the overall offer from the customer's perspective, by asking customer focused questions:
1. Does it meet their needs? (product)
2. Will they find it where they shop? (place)
3. Will they consider that it's priced favorably? (price)
4. And will the marketing communications reach them? (promotion)
Keep on asking questions and making changes to your mix until you are satisfied that you have optimized your marketing mix, given the information and facts and figures you have available.
Review your marketing mix regularly, as some elements will need to change as the product or service and its market grow, mature and adapt in an ever-changing competitive environment.

Key Points

The marketing mix helps you define the marketing elements for successfully positioning your market offer.

One of the best known models is the 4Ps of Marketing, which helps you define your marketing options in terms of product, place, price, and promotion. Use the model when you are planning a new venture, or evaluating an existing offer, to optimize the impact with your target market.