Marketing Mix is a strategy involving the “Four P’s of Marketing” used by a company in order to influence consumers into buying its products. The four P’s of Marketing stands for Product, Price, Place, and Promotion. Each of these four elements affects the other and their proportions can be adjusted to get the perfect combination. The agenda of the marketing mix is to mix various elements and places the right product, at right time, at the right price and at the right place in order to make a relevant and likable offering to the customers.
Let us understand the four P’s of marketing better so that you can understand why market research and its understanding is important to design a productive marketing mix.
1) Product:
The product can be defined as the good or a service that is offered to the customers in response to their need, want or demand. Products can be tangible items like books or pens or can be an intangible service like hospitality and insurances. A right product or service is the result of careful research and considerations of market demands and will effectively fulfill the customers’ need, want and demand. Following are the common points that companies usually consider at the time of designing a product or service:
- Aesthetic appeal: Are the products and its packaging eye-catching and appealing enough or not?
- Features/Benefits: Does it fulfill customers’ expectations and provide benefits that the customers are expecting?
- Functionality: Does the product functions properly or not?
- Competition: Will the product stand tall against all of its competitors available in the market?
- Reliability: Are the product’s quality and life durable or not?
2) Price:
Price is the amount of money a customer pays to buy a desired product or service. As the product is finalized, the next step to consider is to set a price to that product or service. In order to price a product, there are many factors that are needed to be considered and analyzed like the production cost, target market segment, variations in demand and supply, competitors’ price range and consumer’s ability and willingness to pay. Following are the popular pricing strategies based on these factors are:
Cost-based pricing: The calculation of the cost of production, distribution, and promotion is the first thing to analyze while deciding on product pricing. Accordingly, the product or service is priced in order to not only recover the production and promotion cost but earn profit as well.
Skimming: The companies normally launch their new product at a relatively high price in order to recover the production cost in a short period and gain maximum profit before the competitors launch similar products. Later as more and more similar products are launched in the market, the prices can be reduced so as to not suffer a loss.
Penetration pricing: Sometimes companies choose to go opposite of skimming and use penetration pricing as their strategy to easily enter the market segment. It starts with offering the new product at a relatively low price and then after capturing the required market share, it increases the price.
Economy pricing: In order to offer the product at a low cost, the company keeps its production, marketing and other costs low along with their profit margins so as to attract more customers.
3) Place
The Place in the marketing mix refers to the easy availability of the product in the right place. By the right place, it means where it is easily noticeable and to lots of buyers.
The entire distribution system is based on this element of the marketing mix. After having an understanding of the current distribution channel, you can design accordingly to make your product reach the desired places efficiently. The distribution channel can be a direct one where product reaches directly to customers without any intermediaries. Or the distribution channel can be an indirect one where intermediaries like agents, retailers, wholesalers, and distributors are involved.
4) Promotion
To make people notice the presence of your product or service is Promotion. Promotion helps companies’ showcases their products in a different and brighter light than their competitors. They use the promotion to explain their products with its benefits over the other similar products.
There are tons of ways to increase your product’s visibility in the market. Depending on the product, budget, and strategies, choose ones that best fit with your targeted audience. Promotion can be done with some of the following effective means:
- Public relations
- Advertising
- Personal selling
- Sponsorship
- Trade fair and exhibitions
- Social media marketing
- Direct Marketing
- Search engine marketing
- Email marketing