(MB) The Marketing Mix Lesson

The Marketing Mix

The marketing mix is made up of four variables known as the 4 P's: product, place, price, and promotion. The primary objective of marketing is to optimize the marketing mix. To understand the mix we need a better understanding of each individual part.

• Product - In order to successfully market your product, you have to understand not only what you are selling, but who you are selling to. The first consideration in marketing should always be the needs of your customer. You must then be able to communicate to the customer the value added in using your product or service. Putting yourself in your customer's shoes is an excellent way to understand their needs. Ask yourself these questions: What fundamental advantages does your product or service offer? What additional benefits differentiate your product from others a customer might buy? What non-tangible benefits, such as excellent customer service, will you offer? Finding the answers to these questions and making sure they are a good fit for your customer is critical to this part of the marketing mix.
• Place - Place is not just about which store your product is in or even where in the store it is located. Place considers all of the little questions about how to get the product in the hands of the customer. This includes channels of distribution, market coverage, managing inventories, transportation and logistics. Does your product or service require customers coming to you? Then marketing your location is crucial. Will you deliver? How long will delivery take? Quick access to a product is a deciding factor in many buying decisions. How many times have you bought a product online and paid slightly more because a quick delivery was promised? With online sales, being able to easily track delivery is important. All of these things, not only have to be considered, but also marketed clearly to the customer.
• Price - A number of pricing strategies exist: premium pricing, penetration pricing, skimming pricing, and competitive pricing. Of the four, competitive pricing is the most prevalent. Price is a critical part of the marketing mix, because if the price is too high, you will drive customers away, but if it is too low, you may not be able to cover your costs. The price needs to be in line with the customer's perception of value. Offering trade in allowances, credit terms, or premiums may allow you to raise the price slightly if customers believe they are "getting more for their money."
• Promotion - Many people equate promotion with advertising, but it is much more than that. Promotion considers everything you have at your disposal to tell your customer about your product and the circumstances that led you to make those choices. Promotion is the medium that you use (online, TV, print, etc.), how it is delivered (web ads, social media sites, magazine ads, billboards, etc.), and where it is delivered (stationary billboard vs. wrapped media on a bus; website vs. mobile app). Promotion also includes those value added devices such as discount coupons, buy one-get one, and premiums (an additional coupon or gift with purchase.)

Marketing Mix Interactivity

Check your understanding of the Marketing Mix with the interactive task below.

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