Topic 2 Identify ways to market a business.

What is the marketing mix?

The marketing mix refers to the belief that for marketing to be effective it must include different elements working in conjunction with each other. The term generally refers to what is known as the four Ps:

  • Product
  • Price
  • Place
  • Promotion

Product

Product involves deciding what goods or services should be offered to customers. The product or service serves the basic need of the customer. The product provides the primary value to the customer and all other elements should be reinforcing the value proposition of the product. An important element of product strategy is new product development. Product decisions involve choices regarding brand names, packaging, and services that accompany the product offering.

Price

Price is the cost that the customer is willing to pay for the product and the way it is made available. Price represents on a unit basis what the company receives for the product which is being marketed. All other elements of the marketing mix represent costs. Marketers need to be very careful to arrive at a price and consider the factors that influence the setting of a price. In comparison to other elements of the marketing mix, the price can be changed easily. But an ill-considered change in price can change customer perceptions about the value of the marketing mix.

Place

Place involves decisions concerning distribution channels to be used, the location of outlets, methods of transportation, and inventory levels to be held. The product should be available in the right quantity, at the right time and place. Distribution channels perform three distinct functions. They transfer products from the manufacturer to the customers, they pass information from the manufacturer to the customers, and they retrieve payment from the customers to the manufacturer.

Promotion

Promotion refers to the decisions that must be made with respect to the promotional mix: advertising, personal selling, sales promotions, exhibition, sponsorship, and public relations. By these means, the target audience is made aware of the existence of the product and its benefits. Normally the company makes its first contact with customers through its promotional efforts. A customer does not buy a product unless he or she has formed certain expectations about it. Promotion shapes the expectations of customers about the product. Used rightly, promotion can raise customer expectations and drive sales.

The 4 Ps can be summarised as putting the right product at the right price in the right place at the right time!