The Marketing Mix is a tool invented by the American professor Neil Borden, to describe the different types of choices organizations have, when bringing a product or service to market.
The basic principles of Borden’s model were refined over the years until professor and author E. Jerome McCarthy reduced them to four elements, called the “Four Ps” of marketing.
As a company evolves, it must continually assess the customers’ needs, to know whether it is providing the right product. In this course (as in the world of marketing) “products” can be both tangible goods or intangible services. In assessing which customers it wants to serve, a company gains direction in terms of the products or services it will offer.
The “product life cycle” is a frequently used model for analyzing a product. It identifies the stages of a product, by observing sales volumes over time. Traditionally, the product life cycle charts the following four stages:
1. Introduction Stage
This stage of the cycle could be the most expensive for a company launching a new product. The size of the market is still small, although it will be increasing. However, the cost of development, production, and marketing can be very high, especially if it’s a competitive sector.
2. Growth Stage
The growth stage is typically characterized, by strong growth in sales and profits, and the company starts to benefit. This makes it possible for businesses to invest more money in the promotional activity, to maximize the potential of this stage.
3. Maturity Stage
During the maturity stage, the product is established, and the manufacturer’s aim is now to maintain the market share they have built up. This is probably the most competitive time, for most products and businesses need to invest wisely in any marketing they undertake.
4. Decline Stage
Eventually, the market for a product will start to shrink, and this is what’s known as the decline stage. The cause of this shrinkage could be, the market becoming saturated (i.e. all the customers who might buy the product, have purchased it already), or the consumers switching to a different type of product.
Price not only affects the profit that the company will receive, but also the perception of the product by the consumer. If the quoted price is much higher or much lower than expected, it can negatively affect the buying decision and reduce consumer confidence.
The company’s pricing policy determines in which price segment the product will be placed. This directly affects consumer perception. Price setting directly affects the strategy of entering the market.
When setting a price, you need to think about different pricing tactics for different distribution channels, for example, you can set special volume discounts or offer a special price for a certain set of goods, such a “package” offer will also help to cope with misgrading.
It is equally important to take into account the prices that are planned to be set for the duration of various promotions (if the company plans to hold them) or to determine the conditions for promotional events.
This component of the marketing mix examines the product distribution model. The product must be not only in the right place, but also at the right time for the consumer to decide to buy it.
It is necessary to determine the geography of the goods, the planned expansion to other markets and territories. The channels through which the goods will be distributed are no less important, it is necessary to provide for the rules of display, its size and fines for dealers in case of violation of the requirements. Determine how many goods you need to keep in stock in case of force majeure.
This section includes all kinds of marketing communications. They can be aimed at informing consumers about products, creating or adjusting its image, as well as creating a need to purchase or re-purchase.
This section defines the desired promotion strategy (push or pull). The budget for communications and the planned share of the brand’s voice in the total flow of advertising messages are determined.
The result that is planned to be achieved as a result of promotion is determined (it should be expressed in specific numbers, for example, the expected market share or an increase in the level of customer loyalty by 10%).
Communication channels are selected, the necessary events are planned that the company plans to organize or in which it is necessary to participate. A media strategy and a plan for holding campaigns and other promotional events are being developed.