Marketing Mix

• first used in 1953 when Neil Borden, in his American Marketing Association presidential address, took the recipe idea one step further and coined the term "marketing-mix".

• A prominent marketer, E. Jerome McCarthy, proposed a 4 P’s classification in 1960, which has seen wide use.

What is Marketing Mix?

Marketing Mix = 4 P’s Marketing • Product • Price • Place • Promotion

What is Marketing Mix?

Value perceived in the mind of the consumer

Cover location, distribution, channels and logistics

Marketing communications Collection of features and

benefits that provide customer satisfaction

The 4P’s

• Product - Customer /Consumer • Price - Customer cost • Place - Convenience • Promotion - Communication

4P’s & 4C’s

All  marke)ng  decision-­‐making  can  be  classified  into  four  strategy  elements,  some)mes  referred  to  as  the  marke)ng  mix  or  the  4P’s    • Product:  What  are  the  benefits  of  this  product  and  service  to  its  customers?  

• Price:  Should  a  price  be  charged  to  cover  costs  only?  Should  the  price  allow  for  a  profit?    

• Place:  What  can  be  done  to  make  this  product  and  service  more  accessible  and  available?  

• Promo/on:  What  can  be  done  to  increase  the  visibility  of  this  product  and  service?  What  can  be  done  to  increase  its  usage  or  exposure?  

The 4P’s

Product  is  the  actually  offering  by  the  company  to  its  targeted  customers  which  also  includes  value  added  stuff.  Product  may  be  tangible  (goods)  or  intangible  (services).  For  many  a  product  is  simply  the  tangible,  physical  en)ty  that  they  may  be  buying  or  selling.  While  formula)ng  the  marke)ng  strategy,  product  decisions  include:  ¢ What  to  offer?  ¢ Brand  name  ¢ Packaging  ¢ Quality  

Products

¢ Appearance  ¢ Func)onality  ¢ Accessories  ¢ Installa)on  ¢ AMer  sale  services  ¢ Warranty  

Price  includes  the  pricing  strategy  of  the  company  for  its  products.  How  much  customer  should  pay  for  a  product?  Pricing  strategy  is  not  only  related  to  the  profit  margins  but  also  helps  in  finding  target  customers.  Pricing  decision  also  influence  the  choice  of  marke)ng  channels.    Price  decisions  include:  • Pricing  Strategy  (Penetra)on,  Skim,  etc)  • List  Price  • Payment  period  • Discounts  • Financing  • Credit  terms  

Price

u Using  price  as  a  weapon  for  rivals  is  as  old  as  mankind,  but  it’s  risky  too.  Consumers  are  oMen  sensi)ve  for  price,  discounts  and  addi)onal  offers.  Another  aspect  of  pricing  is  that  expensive  products  are  considered  of  good  quality.  

It  not  only  includes  the  place  where  the  product  is  placed,    all  those  ac)vi)es  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  )me  and  in  the  right  quan)ty  is  crucial  in  placement  decisions.  Placement  decisions  include:  • Placement  • Distribu)on  channels  • Logis)cs  •  Inventory  • Order  processing  • Market  coverage  • selec)on  of  channel  members    

Place (Placement)

v  There  are  many  types  of  intermediaries  such  as  wholesalers,  agents,  retailers,  the  Internet,  overseas  distributors,  direct  marke)ng  (from  manufacturer  to  user  without  an  intermediary),  and  many  others.  

•  Place  decisions  relate  to  distribu/on,  how  the  library  plans  to  make  products  and  services  available  and  accessible  to  customers.    Place  adds  value  by  making  services  available  at  convenient  )mes  and  loca)ons;  by  crea)ng  a  pleasant  environment  in  terms  of  loca)on  size,  ligh)ng,  staff;  by  allowing  for  mul)ple  types  of  distribu)on:  Electronic,  mail  or  walk-­‐in.  Place  and  distribu)on  are  ways  to  differen)ate  your  services,  making  them  more  responsive  to  your  customersʼ’  needs.  

 •  With  the  arrival  of  newer  telecommunica/ons  and  electronic  delivery  mechanisms,  library  channels  of  distribu/on  must  be  looked  at  very  closely.  

Place

Promo/on  includes  all  communica)on  and  selling  ac)vi)es  to  pursuade  future  prospects  to  buy  the  product.  Promo)on  decisions  include:    • Adver)sing  • Media  Types  • Message  • Budgets  • Sales  promo)on  • Personal  selling  • Public  rela)ons/publicity  • Direct  marke)ng  • Sponsorship  

Promotion

q  The  elements  of  the  promo)ons  mix  are  integrated  to  form  a  coherent  campaign.  As  with  all  forms  of  communica)on.  

q  As  these  costs  are  huge  as  compared  to  product  price,  So  it’s  good  to  perform  a  break-­‐even  analysis  before  alloca)ng  the  budget.  It  helps  in  determining  whether  the  new  customers  are  worth  of  promo)on  cost  or  not.  

•  Marke/ng  mix  (4  Pʼ’s)  was  more  useful  in  early  19ʼ’s  when  produc)on  concept  was  in  and  physical  products  were  in  larger  propor)on.  Today,  with  latest  marke/ng  concepts,  marke)ng  environment  has  become  more  integrated.    

•  So,  in  order  to  extend  the  usefulness  of  marke)ng  mix,  some  authors  introduced  a  fiMh  Pʼ’s  and  then  seven  Pʼ’s  (People,  Packaging,  Process).    

•  But  the  founda)on  of  Marke/ng  Mix  s)ll  stands  on  the  basic  4Pʼ’s.    

Extended Marketing Mix – 7P’s

Extended Marketing Mix

The  7  P’s   The  7  C’s  

         Organisa/on  Facing    Customer  Facing    

Product   =   Customer/  Consumer  

Price   =   Cost  

Place   =   Convenience  

Promo)on   =   Communica)on  

People   =   Caring  

Processes   =   Co-­‐ordinated  

Physical  Evidence   =   Confirma)on  

Extended Marketing Mix