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10 Minute Guide

What it is What you should do
The ‘Marketing Mix’ is a term used to Make sure you have identified each
describe the combination of tactics of your target customer groups. If you
used by a business to achieve its have not already done so and would
objectives by marketing its products or like further information on grouping
services effectively to a particular target your customers, take a look at our 10-
customer group. It is also referred to as minute Target Customer briefing.
the ‘4 Ps’ – Product, Price, Promotion
and Place, or the ‘7 Ps’ – the 4 Ps with Now, with each customer group
the addition of People, Process and in mind, work through the steps
Physical Evidence. outlined below.

Why it is important Product

Businesses need to make sure Marketing is about identifying,
they are marketing – anticipating and satisfying customer
— The right product to needs. You need to be sure that your
— The right person at products and services continue to meet
— The right price in your customers’ needs.
— The right place and at
— The right time 1. Carry out simple research by
asking your customers –
For example, if you manufacture — What they think of each
pens, and have decided to target product/service
schoolchildren, it would be more — How satisfied are they
appropriate to market – with the quality
— Coloured ballpoint pens (product) — How satisfied are they
— At a low price (price) with any support services
— Selling them through newsagents you may provide
and stationers (place) — How effective it is in
— And promoting them through meeting their needs
point of sale material (promotion) — How they see their needs
changing in the short and
than it would be to market – long term future
— Gold fountain pens (product) 2. Carry out step 1 for each product
— At a high price, including insurance or service you offer
against loss (price) 3. Have a system for collecting and
— Selling them through specialist analysing feedback from your
outlets and jewellery stores (place) customers so that ideas are fed into
— And promoting them in a new product development process
glossy magazines and Sunday that is ongoing.
Supplements (promotion)
ã The Chartered Institute of Marketing 2004
10 Minute Guide: Marketing Mix

4. Ask yourself what stage of the 3. If you are selling to businesses you
product life cycle your products or will have to cover the cost of a sales
services have reached. The ‘product force. This can be an expensive
life cycle’ is one way of looking at overhead and will again impact
how the marketing mix links on your pricing.
together. Products are said to go
through stages – an introductory Price
stage, a growth stage, a mature Price generates profit so is an
stage and a decline stage. At each important element of the mix. You
stage a slightly different mix is need to consider -
appropriate – see the ‘What you 1. What your target group of
need to know’ section of this customers will be prepared to pay
material for more information. for your product or service. It is
5. Analyse the profitability of each important not to set the price too
product/service you offer. For more low as customers may think there is
information on calculating this, take something wrong with the product.
a look at the 10-minute 80/20 Rule. Equally, if you set the price too
Which products/services make the high, customers may think that it
biggest contribution or provide the is too expensive for the benefits
highest profitability? What support offered. Think about how you have
services do you offer with each ‘positioned’ your product in terms
product? Could it be improved, of quality. This will help you to
adding value with little cost? assess how to price it.
1. What it costs you to produce it.
Place This will show you what you need
‘Place’ is the means of distribution to charge and not what you could
you select depending on the type of or should charge. However, if you
product or service you are marketing. do not calculate what it costs you
Your choice will impact on your pricing to produce your product correctly,
and your promotion decisions. the more you sell, the more you
will lose. Don’t forget to make an
1. Are the customers for your allocation for costs such as selling
products and services consumers or which are usually treated as fixed.
businesses? If they are consumers (See item 1 for more information.)
you will have three main options – 3. What your competitors charge.
— Selling to wholesalers who will Look at your competitors’ web sites,
sell to retail outlets who will sell or simply phone them and ask for
on to the consumer a price list or quotation.
— Selling direct to retail outlets
— Selling direct to the customer Promotion
If your customers are businesses you The promotional mix is made up
will probably sell to them direct of 5 elements:
through your own sales force. — advertising
2. If you sell through wholesalers and — sales promotion
retailers, remember when you price — public relations
your products that they will each — direct marketing
want their own mark-up to cover — personal selling
their overheads. You will also need
to promote your products and
services to all members of the
channel. Wholesalers and retailers
will have to be persuaded to stock
your product and end customers
to buy them.
ã The Chartered Institute of Marketing 2004
10 Minute Guide: Marketing Mix

The combination of tools you use 1. Look at all the processes involved in
depends on the budget you make getting your products to the
available, the message you wish customer. Start with the
to communicate and the group of identification of prospects and work
customers you are targeting. To find out through to after-sales support. Does
more about developing a promotional any stage cause a delay? How can
mix as part of your wider marketing you improve this?
mix, take a look at the 10-minute 2. Are your customers kept informed
Promotional Mix. about what is happening?
3. Do your staff keep their promises to
People customers?
The people employed in your 4. How effectively are you handling
organisation will determine the quality customer complaints?
of service your customers receive. This
is truer for services, but also impacts on Physical Evidence
businesses making tangible products. Physical evidence is a term used to
Happy, skilled and motivated staff make describe the type of image that your
happy customers. They are more likely business portrays through its physical
to think about the customer and deliver presence, namely its premises, the
good customer service if they are well appearance of its staff, its vehicles, etc.
trained and are recruited for their When customers do not have anything
positive attitude to customers. that they can touch, see or try before
they buy, they are more likely to assess
You can achieve a competitive you by the image you put across. It is
advantage over your competitors therefore particularly important if you
through offering a high level of offer services rather than tangible
pre-sales and after-sales support and products.
advice. Again, this can impact on the
price you set, as customers are likely to 1. How tangible is the product you
be prepared to pay more for the service market? If it is heavily dependent on
they receive but there may be a higher the service element (for example, a
cost for you to take into account. restaurant, or hotel, or window
cleaning service, or hairdressing)
Identify those staff who come into then you should pay particular
contact with customers, either face-to- attention to this element of the mix.
face or by phone. Even if you are a manufacturer, this
1. Carry out a task analysis of what element is important if customers
they do in terms of customer visit your premises.
contact. 2. Ensure that the image portrayed by
2. Involve your staff in setting your organisation is consistent with
standards for customer service. the type of product or service you
For more information on customer offer.
service, look at the 10-minute 3. Look at your reception area, your
Customer Service Programme. car park (are there spaces for
3. Prioritise training needs visitors near to the entrance), the
for these staff and provide appearance of your delivery staff or
appropriate training customer service staff, that
condition of your vehicles, etc.
Process Where can you make
The processes involved in delivering improvements?
your products and services to the
customer have an impact on the way in
which your customers perceive you.
ã The Chartered Institute of Marketing 2004
10 Minute Guide: Marketing Mix

What to do now Where to find out more

If you have not already done so, you For more on the marketing mix, try
need to think about your promotional looking at
mix. For more information on this, see
our 10-minute briefing on the - A Business
Promotional Mix. Open Learning Archive with a summary
of the marketing mix.
You should also plan a customer
service programme. You can see what is
involved by looking at the 10-minute onstore.htm - Key topics from many
Customer Service Programme. marketing courses designed for
marketing learners and free from
What you need to know Lessonstore.
If you want to take forward some
of the ideas described here, below http://www.businessbureau-
are some keywords (shown in italics)
that you can use to search for further marketing/marketing_mix.htm - Tips on
information on this website or establishing the right product, price,
in various marketing texts. place and promotion for your business.

Product – about the product life

cycle and product portfolio analysis

Price – about different approaches

to pricing that are market based,
and about marginal costing.

Promotion – about the advantages

and disadvantages of the various
promotional tools, about customer
behaviour, and about budget
setting techniques.

Place – about appropriate

channels to market for your
products and services

People, Process & Physical Evidence –

about customer service and
effective processes and
environments for the delivery of
your products and services.
ã The Chartered Institute of Marketing 2004
10 Minute Guide: Marketing Mix

An example in practice Process – The case emphasises that the

Look at the e-marketing case company sees it important to err on the on . side of caution, offering a level of
service it knows it can deliver, so that
This case shows that customers are not disappointed. It
has clearly defined its target audience carries out e-mail surveys after
through marketing research. deliveries are made, ensuring that
customer expectations continue to be
Product – Its product is garden met.
equipment and plants. However, the
company has differentiated itself from Physical Evidence – Securicor is the
its competitors through its website and ‘face’ of at the
the provision of extensive information. moment. The image they put across
It offers enhanced service through an must give the same credibility as
effective search facility and advice on provides itself.
planting. Greenfingers already checks on this
through its e-mail surveys. At this point
Place – The company deals direct with it will be important that the image is
the customer, outsourcing only its consistent with the rest of its mix.
deliveries. It has indicated that it may
consider bricks and mortar outlets in
the future.

Price – The case does not give details of

pricing policies, which will have to
cover the costs of delivery and
contribute to overheads with the aim of
moving the business into profit.

Promotion – The company has

integrated on-line and off-line
promotion. Promotion includes on-line
affiliations (providing content for
several portals), a mail-order catalogue
in selected consumer magazines, direct
mailing, and interactive TV.

People – The case highlights the fact

that the management team were
recruited for the combination of The Chartered Institute of
experience in marketing, gardening and Marketing will work with you
on-line that they bring to the business. to identify and develop your
They have selected Securicor to training needs.
undertake their deliveries.

Please contact our

Training Advisory Team on:

Phone: +44 (0) 1628 427 200

for all your training enquiries.
ã The Chartered Institute of Marketing 2004