Marketing Mix

The marketing mix is probably the most famous phrase in marketing. The elements are the
marketing 'tactics'. Also known as the 'four Ps', the marketing mix elements are price, place ,
product, and promotion.
The concept is simple. Think about another common mix - a cake mix. All cakes contain eggs,
milk, four, and sugar. Howeer, you can alter the !nal cake by altering the amounts of mix
elements contained in it. "o for a sweet cake add more sugar# $t is the same with the marketing
mix. The o%er you make to your customer can be altered by arying the mix elements. "o for a
high pro!le brand increase the focus on promotion and desensiti&e the weight gien to price.
Promotion
Another one of the '('s is 'promotion'. This includes all of the tools aailable to the marketer for
'marketing communication'. As with )eil H.*orden's marketing mix, marketing communications
has its own 'promotions mix.' Think of it like a cake mix, the basic ingredients are always the
same. Howeer if you ary the amounts of one of the ingredients, the !nal outcome is di%erent. $t
is the same with promotions. +ou can 'integrate' di%erent aspects of the promotions mix to delier
a uni,ue campaign. The elements of the promotions mix are-
1. Personal Selling 2. Sales Promotion 4. Public Relations 4. Direct
Mail
. !rade "airs#$x%ibitions &. 'd(ertising ). Sponsors%ip
Product
!%e Product *ife +,cle -P*+. is based upon the biological life cycle. .or example, a seed is
planted /introduction01 it begins to sprout /growth01 it shoots out leaes and puts down roots as it
becomes an adult /maturity01 after a long period as an adult the plant begins to shrink and die out
/decline0.
Place
(lace is the mechanism through which goods and2or serices are moed from the manufacturer2
serice proider to the user or consumer.
Di/erent c%oices of place include0 1%olesalers, 'gents, Retailers, !%e 2nternet
The $nternet has a geographically disperse market.
)iche products reach a wider audience e.g. "cottish "almon direct from an $nerness
!shery.
There are low barriers low barriers to entry as set up costs are low.
3se e-commerce technology /for payment, shopping software, etc0
There is a paradigm shift in commerce and consumption which bene!ts distribution ia the
$nternet.
Price
There are many ways to price a product. 4et's hae a look at some of them and try to understand
the best policy2strategy in arious situations.
Premium Pricing
3se a high price where there is uni,ueness about the product or serice. This approach is used
where a substantial competitie adantage exists. "uch high prices are charge for luxuries such
as 5unard 5ruises, "aoy Hotel rooms, and 5oncorde fights.
Penetration Pricing
The price charged for products and serices is set arti!cially low in order to gain market share.
6nce this is achieed, the price is increased. This approach was used by .rance Telecom in order
to attract new corporate clients.
$conom, Pricing
This is a no frills low price. The cost of marketing and manufacture are kept at a minimum.
"upermarkets often hae economy brands for soups, spaghetti, etc.
Price Skimming
5harge a high price because you hae a substantial competitie adantage. Howeer, the
adantage is not sustainable. The high price tends to attract new competitors into the market,
and the price ineitably falls due to increased supply. 7anufacturers of digital watches used a
skimming approach in the 89:;s. 6nce other manufacturers were tempted into the market and
the watches were produced at a lower unit cost, other marketing strategies and pricing
approaches are implemented.
3t%er Pricing Strategies
Ps,c%ological Pricing
This approach is used when the marketer wants the consumer to respond on an emotional, rather
than rational basis. .or example, pricing at 99 cents not one dollar.
Product *ine Pricing
<here there is a range of product or serices the pricing refect the bene!ts of parts of the range.
.or example car washes. *asic wash could be =>, wash and wax =', and the whole package =?.
Product 4undle Pricing
Here sellers combine seeral products in the same package. This also seres to moe old stock.
@ideos and 5As are often sold using the bundle approach.
Promotional Pricing
(ricing to promote a product is a ery common application. There are many examples of
promotional pricing including approaches such as *6B6. /*uy 6ne Bet 6ne .ree0.
5alue Pricing
This approach is used where external factors such as recession or increased competition force
companies to proide 'alue' products and serices to retain sales e.g. alue meals at 7cAonalds.