Marketing Mix – The 4 p’s of marketing

The Marketing mix is a set of four decisions which needs to be taken

before launching any new product. These variables are also known as
the 4 P’s of marketing. These four variables help the firm in making
strategic decisions necessary for the smooth running of any product /
organization.These variables are
1. Product
2. Price
3. Place
4. Promotions
Marketing mix is mainly of two types.
1) Product marketing mix – Comprised of Product, price, place and
promotions. This marketing mix is mainly used in case of Tangible goods.
2) Service marketing mix – The service marketing mix has three
further variables included which are people, physical evidence and
process. They are discussed in detail in the article on service marketing
mix.
The term marketing mix was first coined by Neil H Borden back in 1964
in his article “The concept of marketing mix”. Several strategic analysts
over the years believe that the marketing mix can make or break the
firm. Having the right marketing mix at the start of the marketing plan is
 absolutely essential. Over time the concept of marketing mix has
provided a steady platform for the launch of a new product or business.
As mentioned before, the marketing mix is characterized by four different
but equally important variables. These variables are never constant and
may be changed over time. However, a change in one of the variables
may cause a change in all the other variables as well. The variables are
as follows
1) Product – The first thing you need, if you want to start a business, is
a product. Therefore Product is also the first variable in the marketing
mix. Product decisions are the first decisions you need to take before
making any marketing plan. A product can be divided into three parts.
The core product, the augmented product and the tertiary product.
Before deciding on the product component there are some questions
which you need to ask yourself.
 What product are you selling?

 What would be the quality of your product?

 Which features are different from the market?

 What is the USP of the product?

 Whether the product will be branded as sub brand or completely

new?
 What are the secondary products which can be sold along with
primary (Warranty, services)
Based on these questions, several product decisions have to be made.
These product decisions will in turn affect the other variables of the
marketing mix. For example – You launch a car with is to have the
highest quality. Thus the pricing, promotions and placing would have to
be altered accordingly. Thus as long as you dont know your product, you
cannot decide any other variable of the marketing mix. However, if the
product features are not fitting in the marketing mix, you can alter the
product such that it finds a place for itself in the marketing mix.
2) Pricing – Pricing of a product depends on a lot of different variables
and hence it is constantly updated. Major consideration in pricing is the
costing of the product, the advertising and marketing expenses, any price
fluctuations in the market, distribution costs etc. Many of these factors
can change separately. Thus the pricing has to be such that it can bear
the brunt of changes for a certain period of time. However, if all these
variables change, then the pricing of a product has to be increased and
decreased accordingly.
Along with the above factors, there are also other things which have to
be taken in consideration when deciding on a pricing strategy.
Competition can be the best example. Similarly, pricing also affects the
targeting and positioning of a product. Pricing is used for sales
promotions in the form of trade discounts. Thus based on these factors
there are several pricing strategies, one of which is implemented for the
marketing mix.
3) Place – Place refers to the distribution channel of a product. If a
product is a consumer product, it needs to be available as far and wide as
possible. On the other hand, if the product is a Premium consumer
product, it will be available only in select stores. Similarly, if the product
is a business product, you need a team who interacts with businesses and
makes the product available to them. Thus the place where the product is
distributed, depends on the product and pricing decisions, as well as any
STP decisions taken by a firm.
Distribution has a huge affect on the profitability of a product. Consider a
FMCG company which has national distribution for its product. An
increase in petrol rates by 10 rs will in fact bring about drastic changes
in the profitability of the company. Thus supply chain and logistics
decisions are considered as very important costing decisions of the firm.
The firm needs to have a full proof logistics and supply chain plan for its
distribution.
4) Promotions – Promotions in the marketing mix includes the
completeintegrated marketing communications which in turn includes
ATL and BTL advertising as well as sales promotions. Promotions are
dependent a lot on the product and pricing decision. What is the budget
for marketing and advertising? What stage is the product in? If the
product is completely new in the market, it needs brand / product
awareness promotions, whereas if the product is already existing then it
will need brand recall promotions.
Promotions also decide the segmentation targeting and positioning of the
product. The right kind of promotions affect all the other three variables
– the product, price and place. If the promotions are effective, you might
have to increase distribution points, you might get to increase the price
because of the rising brand equity of the product, and the profitability
might support you in launching even more products. However, the
budget required for extensive promotions is also high. Promotions is
considered as marketing expenses and the same needs to be taken in
consideration while deciding the costing of the product.

Thus as we see from the above diagram, all the four variables of
marketing mix are inter related and affect each other. By increasing the
pricing of the product, demand of the product might lessen, and lesser
distribution points might be needed. On the other hand, the product USP
can be such that maximum concentration is on creating brand
awareness, thereby increasing need of better pricing and more
promotions. Finally, the overall marketing mix can result in your
customer base asking for some improvement in the product, and the
same can be launched as the upgraded product.
The role of marketing mix in Strategy – Marketing mix plays a crucial
role while deciding the strategy of an organization. It is the first step
even when a marketing plan or a business plan is being made. This is
because, your marketing mix decision will also affect segmentation,
targeting and positioning decisions. Based on products, segmentation
and targeting will be done. Based on the price, positioning can be
decided. And these decisions will likely affect the place and promotion
decisions. Thus, the marketing mix strategy goes hand in hand with
segmentation targeting and positioning.

Service Marketing Mix

The service marketing mix is also known as an extended marketing mix

and is an integral part of a service blueprint design. The service
marketing mix consists of 7 P’s as compared to the 4 P’s of a product
marketing mix. Simply said, the service marketing mix assumes the
service as a product itself. However it adds 3 more P’s which are
required for optimum service delivery.

The product marketing mix consists of the 4 P’s which are

Product, Pricing, Promotions and Placement. These are discussed in my
article on product marketing mix – the 4 P’s.
The extended service marketing mix places 3 further P’s which include
People, Process and Physical evidence. All of these factors are necessary
for optimum service delivery. Let us discuss the same in further detail.
Product – The product in service marketing mix is intangible in nature.
Like physical products such as a soap or a detergent, service products
cannot be measured. Tourism industry or the education industry can be
an excellent example. At the same time service products
are heterogenous, perishable and cannot beowned. The service product
thus has to be designed with care. Generally service blue printing is done
to define the service product. For example – a restaurant blue print will
be prepared before establishing a restaurant business. This service blue
print defines exactly how the product (in this case the restaurant) is
going to be.
Place - Place in case of services determine where is the service product
going to be located. The best place to open up a petrol pump is on the
highway or in the city. A place where there is minimum traffic is a wrong
location to start a petrol pump. Similarly a software company will be
better placed in a business hub with a lot of companies nearby rather
than being placed in a town or rural area.
Promotion – Promotions have become a critical factor in the service
marketing mix. Services are easy to be duplicated and hence it is
generally the brand which sets a service apart from its counterpart. You
will find a lot of banks and telecom companies promoting themselves
rigorously. Why is that? It is because competition in this service sector is
generally high and promotions is necessary to survive. Thus banks, IT
companies, and dotcoms place themselves above the rest by advertising
or promotions.
Pricing – Pricing in case of services is rather more difficult than in case
of products. If you were a restaurant owner, you can price people only for
the food you are serving. But then who will pay for the nice ambience you
have built up for your customers? Who will pay for the band you have for
music? Thus these elements have to be taken into consideration while
costing. Generally service pricing involves taking into consideration
labor, material cost and overhead costs. By adding a profit mark up you
get your final service pricing. You can also read about pricing strategies.
Here on we start towards the extended service marketing mix.
People – People is one of the elements of service marketing mix. People
define a service. If you have an IT company, your software engineers
define you. If you have a restaurant, your chef and service staff defines
you. If you are into banking, employees in your branch and their behavior
towards customers defines you. In case of service marketing, people can
make or break an organization. Thus many companies nowadays are
involved into specially getting their staff trained in interpersonal skills
and customer service with a focus towards customer satisfaction. In fact
many companies have to undergo accreditation to show that their staff is
better than the rest. Definitely a USP in case of services.
Process – Service process is the way in which a service is delivered to
the end customer. Lets take the example of two very good companies –
Mcdonalds and Fedex. Both the companies thrive on their quick service
and the reason they can do that is their confidence on their processes. On
top of it, the demand of these services is such that they have to deliver
optimally without a loss in quality. Thus the process of a service company
in delivering its product is of utmost importance. It is also a critical
component in the service blueprint, wherein before establishing the
service, the company defines exactly what should be the process of the
service product reaching the end customer.
Physical Evidence – The last element in the service marketing mix is a
very important element. As said before, services are intangible in nature.
However, to create a better customer experience tangible elements are
also delivered with the service. Take an example of a restaurant which
has only chairs and tables and good food, or a restaurant which has
ambient lighting, nice music along with good seating arrangement and
this also serves good food. Which one will you prefer? The one with the
nice ambience. That’s physical evidence. Several times, physical evidence
is used as a differentiator in service marketing. Imagine a private
hospital and a government hospital. A private hospital will have plush
offices and well dressed staff. Same cannot be said for a government
hospital. Thus physical evidence acts as a differentiator.