The Marketing Mix Explained
E. Jerome McCarthy developed the original concept of the marketing mix over 40 years ago.
It was designed to suggest that you should have a balanced mix of marketing activities within your marketing plan. Holistically you have product or services, priced correctly for your market, at the right location for maximum effect with powerful promotional activities to communicate your offerings to your target customers.
Elements of the Mix
These attributes are known as The 4 Ps because the components named above, all begin with the letter "P". As the illustration shows, these are "Product", "Price", "Promotion" and "Place". More recently the 4 Ps became 6 Ps with People and Process integrated into the concept. Here's a rundown of what each of these terms means.
Summary of the 6Ps
|1: Product||The customer benefits derived from using your products.|
|2: Price||The buying cost and discounting practices for customers.|
|3: Promotion||Communication plans highlighting why they should buy from you.|
|4: Place||The location of all your sales channels.|
|5: People||The staff involved in the selling and procurement process.|
|6: Process||The operational procedures needed to procure a sale.|
The first P is your product or service derived from researching and satisfying the needs of your customers directly.
When describing your products, you should list the benefits that your customer receives rather than just listing attributes.
Highlighting the benefits helps structure the other "Ps", especially promotional activities and the messaging in communications material. When aligning the features and benefits directed to your customers, you should answer the following questions:
- What are the specific customer needs?
- Is the product part of an existing group?
- Are there variations in size, colour, and cost?
- How does it differ from existing products already in the market?
The second P is the price of your product and decisions surrounding overall pricing strategies. Pricing is a complex area to get absolutely right.
Your salespeople will want to undercut competitors and have the lowest price because that's easy to sell.
This strategy could work in a commodity scenario but unlikely for premium products.
A higher priced product often implies high quality, and consumers expect more value from the result of their purchase. You can test levels of pricing for different target groups to find the right level of pricing over time. Mix these with the perceived benefits and your pricing strategy should deliver the profits and margins required.
You need to answer the following questions about price:
- What profits do you make from one sale?
- Are there discounts available, and in what circumstances?
- Is the price higher or lower than the average in the market?
- Will your competitors change their pricing after you've launched?
The third P is about promoting your products and services. Promotional activities may include "above the line" brand advertising, specific product offerings through below the line activities, face to face selling, direct marketing and public relations.
The communications aspect of your business is the final element to develop after your overall business strategy and analysis.
When developing any marketing activities, you should consider the following:
- What budget do you have to communicate to your customers?
- Are you developing the plans in-house or using an agency?
- Will you use online promotion including social media exposure?
- How do your customers currently respond to marketing messages?
The final P is about 'place'. Location, location, location is a phrase often mentioned in retailing and is still an essential part of the mix. If you operate a retail store, your location should be where there's a steady stream of potential customers walking past or easy access parking facilities.
A shop tucked away on a side street will not be found so easily. With the internet, there are additional options to explore to get your services in front of new potential customers.
When deciding on location or sales channels, ask yourself the following:
- Where are your customers physically located when making a purchasing decision?
- How are they going to get access to your product?
- What are all the sales channels to be used?
- Are there other distribution channels available to further extend your sales activities?
Cate Costa of New Venture Mentor has produced a comprehensive video on how to implement the 4Ps for a small business owner. She discusses more general marketing guidance, and it's worth watching in its entirety.
The Evolution to The 6Ps
As marketing evolved, University Professors also believed elements were missing. The latest mix now includes people and processes to form "6Ps".
Your staff make things happen in your organisation, and it's essential to have the right mix of experience and knowledge to implement your plans.
Like all HR strategies, ensure they have clear responsibilities, are trained well in their area and are rewarded for performance achievements. Your management team also plays a key role in direction and motivation.
ISO9001 is all about having processes in place that the company follows. Whether those methods are improving the business is not a concern for this quality indicator.
The quality of your final results and consistency should help set you apart from your competitors. Having processes in place that work and adhered to makes for an efficient operation.
Many now dismiss the four Ps as being out of date and too simplistic and developed the theory further as the 4Cs.
American Marketer Robert Lauterborn developed these in the 1990s as markets developed, and communication advances made it easier to compare products and services.
- Convenience replaced place.
- Cost instead of price.
- Communications instead of promotion.
- Customer needs instead of product.
Perhaps "cost" is listed because it begins with the letter "C" whereas price is more appropriate when dealing with marketing issues.
Although you should take all elements together in any strategy, there's no need to use the terminology listed.