Marketing Mix

By Prof.Sagar Lalka

Definition:
Marketing mix is the combination of elements that you will use to market your product. There are four elements: Product, Place, Price & Promotion. They are called the four Ps of the marketing mix.

Marketing Manager is a mixer of all marketing Ingredients and he creates a mix (blending or combination) of all the marketing elements and resources.

Four Ps

- Product - Price - Place - Promotion

Four Ps
These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response.

Product Mix
Brand Style Colour Design Product Line Package Warranty Service

Price Mix
Pricing Strategy Pricing policy Basic Price Terms of Credit Discounts Allowances

Promotion Mix
Personal Selling Advertising Publicity Sales Promotion - Dealer - Consumer

Place Mix
Distribution Channels - Wholesalers - Retailers - Mercantile Agents Physical Distribution - Transport - Warehousing - Inventory

Product

Price

Marketing Strategy and Its Elements

Place

Promotion

Elements

Product - A Product is anything that satisfies a need or want and can be offered in an exchange. It can be a good, service or Idea.

Price - It is the value placed on the something of value in an exchange. Consumers exchange something of value normally purchasing power(Money) for the satisfaction or ability they expect a product to provide.

Promotion - It refers to marketing activities used to communicate positive, persuasive information about an organisation, its products and activities to directly or indirectly expedite exchanges in a target market.

Place - It refers to marketing activities that make products available to consumers at the right time and at a convenient location.

To be Continued..

Understanding Marketing Mix

Lifebuoy's Marketing Mix Allocation to marketing mix elements(Rs.Crore)

Price per 100gm Pack

Rs.8.00

Sale quantity MT
1,50,000

Product Place/Distribution

Promotion

Total

600

270

50

920

Mix 1
Annual Sales = Rs.1275 Crore Total Expenditure of Rs.1070 Crore - Fixed Cost = 150 Crore - Marketing Mix = 920 Crore Lifebuoy brings profit of Rs.205 Crore

Lifebuoy's Marketing Mix

Allocation to marketing mix elements (Rs.Crore)

Price per 100gm Pack

Rs.8.50

Sale quantity MT
1,50,000

Product

Place/Distribution

Promotion

Total

580

260

80

920

Mix 2
Annual Sales = Rs.1275 Crore Total Expenditure of Rs.1070 Crore - Fixed Cost = Rs.150 Crore - Marketing Mix = Rs.920 Crore Lifebuoy brings profit of Rs.205 Crore Effectiveness is on Branding

Lifebuoy's Marketing Mix Price per 100gm Pack Rs.9.00 Sale quantity MT 1,50,000 Product

Allocation to marketing mix elements(Rs.Crore) Place/Distribution Promotion Total

620

260

90

970

Mix 3
Annual Sales = Rs.1350 Crore Total Expenditure of Rs.1120 Crore - Fixed Cost = Rs.150 Crore - Marketing Mix = Rs.970 Crore Lifebuoy brings profit of Rs.230 Crore

Lifebuoy's Marketing Mix Price per 100gm Pack Rs.9.25 Sale quantity MT 1,50,000

Allocation to marketing mix elements(Rs.Crore) Product Place/Distribution Promotion Total

660

300

100

1060

Mix 4
Annual Sales = Rs.1480 Crore Total Expenditure of Rs.1210 Crore - Fixed Cost = Rs.150 Crore - Marketing Mix = Rs.1060 Crore Lifebuoy brings profit of Rs.270 Crore

Assembling The Mix

It requires knowledge of the effect of each element of the mix on sales,and the interrelationship of the various elements Marketing Managers employ statistical techniques and actual field experiments. Judgement and quantitative analysis have their due roles in deciding an optimal mix

Decisions forms
What is the best combination of the four Ps in a given situation? Which line of products, or which individual products, should be offered to an identified target market? What should be the price structure? Which channel has to be selected?

What is the right promotion strategy? How to balance the impact of increase/decrease in the allocations? How should the total marketing effort and resources of the firm be portioned among the elements?

Linkage

The Marketing effort required for achieving the targeted sales, translates itself into Marketing Budget and the distribution of this budget over the four Ps, indicates the Marketing Mix position.

When the marketing manager has completed assembling the marketing mix, it means he has on his hands the Marketing Budget. He has decided the marketing effort/marketing expenditure. He has decided how it should be allocated over four Ps. Marketing Mix expressed in rupee terms becomes the marketing budget.