Marketing Mix

Marketing Mix:

The marketing mix is . . . The set of controllable

tactical marketing tools – product, price, place, and
promotion – that the firm blends to produce the
response it wants in the target market.
Kotler and Armstrong (2010).
 The first known mention of a mix has been attributed to a
Professor of Marketing at Harvard University, Prof. James
Culliton. In 1948, Culliton published an article entitled, The
Management of Marketing Costs in which Culliton describes
marketers as 'mixers of ingredients'.
 Some years later, Culliton's colleague, Professor Neil
Borden, published a retrospective article detailing the early
history of the marketing mix in which he claims that he was
inspired by Culliton's idea of 'mixers', and credits himself
with popularising the concept of the 'marketing mix. 
 
The 4 Ps, in its modern form, was first proposed in
1960 by E. Jerome McCarthy in his text-book, Basic
Marketing: A Managerial Approach.  
Who presented them within a managerial approach
that covered analysis, consumer behavior, market
research, market segmentation, and planning
 The Marketing Mix
 The prospect of extending the marketing mix first took hold at the
inaugural AMA Conference dedicated to Services Marketing in the
early 1980s, pointing to many important limitations of the 4 Ps
model.
 The papers indicate that service marketers were thinking that services
were fundamentally different from products, and therefore required
different tools and strategies.
 In 1981, Booms and Bitner proposed a model of 7 Ps, comprising
the original 4 Ps extended by process, people and physical
evidence, as being more applicable for services marketing
 Product
 Product means the goods-and-services combination the
company offers to the target market for attention,
acquisition, use or consumption that might satisfy a want or
need.
-Kotler and Armstrong (2010).
 Services are a form of product that consists of activities,
benefits or satisfactions offered for sale that are
essentially intangible and do not result in the ownership
of any thing.
Product planner need to think about product or
service on three levels. Each level adds more
customer value.
More basic level is the core customer value
(problem solving)
At the second level product planner must turn the
core benefit into the Actual product,
and the third is Augmented product around the
core benefit and actual product by offering
additional customer service and benefits.
Product level
 In developing the right product, you have to answer the following
questions:

 What does the client want from the service or product?

 How will the customer use it?
 Where will the client use it?
 What features must the product have to meet the client’s needs?
 Are there any necessary features that you missed out?
 Are you creating features that are not needed by the client?
 What’s the name of the product?
 Does it have a catchy name?
 What are the sizes or colors available?
 How is the product different from the products of your
competitors?
 What does the product look like?
Marketing decisions
Product design - features, quality
Product assortment - product range, product mix,
product lines
Branding
Packaging and labeling
Services (complementary service, after-sales service,
service level)
Guarantees and warranties
Returns
Managing products through the
The Product Life Cycle (PLC) is based upon the biological
life cycle.

The Customer Life Cycle (CLC) has obvious similarities

with the Product Life Cycle (PLC). However, CLC focuses
upon the creation and delivery of lifetime value to the
customer i.e. looks at the products or services that
customers NEED throughout their lives.
Price

Price is the amount the consumer must exchange to receive

the offering .
Solomon et al (2009)

The company’s goal in terms of price is to reduce costs

through improving manufacturing and efficiency, and most
importantly the marketer needs to increase the perceived
value of the benefits of its products and services to the
buyer or consumer.
Price
Pricing Strategy
Importance of:
knowing the market
elasticity
keeping an eye
on rivals

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Pricing strategies
Cost plus
Competition based
Value based
Skimming
Penetration
Psychological etc.
Marketing Decisions
Price strategy
Price tactics
Price-setting
Allowances - e.g. rebates for distributors
Discounts - for customers
Payment terms - credit, payment methods
Important questions for the marketer

How much did it cost you to produce the product?

What is the customers’ perceived product value?
Do you think that the slight price decrease could
significantly increase your market share?
Can the current price of the product keep up with the
price of the product’s competitors?

Promotion
Promotion includes all of the activities marketers
undertake to inform consumers about their
products and to encourage potential customers to
buy these products.
Promotion is comprised of various elements like:
Sales Organization
Public Relations
Advertising
Sales Promotion
Promotion includes all of the tools available to the marketer for
marketing communication.

As with Neil H. Borden’s marketing mix, marketing

communications has its own promotions mix. Whilst there is no
absolute agreement on the specific content of a marketing
communications mix, there are many promotions elements that
are often included such as sales, advertising, sales, promotion,
public relations, direct marketing, online communications
and personal selling.
 Marketer need to answer the following questions:

How can you send marketing messages to your

potential buyers?
When is the best time to promote your product?
Will you reach your potential audience and buyers
through television ads?
Is it best to use the social media in promoting the
product?
What is the promotion strategy of your competitors?

Place:
Place includes company activities that make the
product available to target consumers.
Kotler and Armstrong (2010)

Place is also known as channel, distribution, or

intermediary. It is the mechanism through which goods
and/or services are moved from the manufacturer/
service provider to the user or consumer
Marketing decisions
Strategies such as intensive distribution, selective
distribution, exclusive distribution
Franchising
Market coverage
Channel member selection and channel member
relationships
Assortment
Location decisions
Inventory
Transport, warehousing and logistics
Here are some of the questions that marketer should
answer in developing distribution strategy:
Where do your clients look for your service or product?
What kind of stores do potential clients go to? Do they
shop in a mall, in a regular brick and mortar store, in
the supermarket, or online?
How do you access the different distribution channels?
How is your distribution strategy different from your
competitors?
Do you need a strong sales force?
Do you need to attend trade fairs?
Do you need to sell in an online store?
 Expanded marketing Mix

In 1981, Booms and Bitner proposed a model of 7 Ps,

comprising the original 4 Ps plus process,
people and physical evidence, as being more applicable
for services marketing
People
(People are) . . . All human actors who play a part
in service delivery and thus influence the buyers’
perceptions; namely, the firm’s personnel, the
customer, and other customers in the service
environment.
Zeithaml et al (2008).
People are the most important element of any
service or experience. Services tend to be produced
and consumed at the same moment, and aspects of
the customer experience are altered to meet the
individual needs of the person consuming it.
Marketing decisions
Staff recruitment and training
Uniforms
Queuing systems, managing waits
Handling complaints, service failures
Managing social interactions
 Process
Process
Process is) . . . The actual procedures,
mechanisms, and flow of activities by which the
service is delivered – this service delivery and
operating systems.
Zeithaml et al (2008).
Marketing decisions:
Process design
Blueprinting (i.e. flowcharting) service processes 
Standardization vs customization decisions
Diagnosing fail-points, critical incidents and system failures
Monitoring and tracking service performance
Analysis of resource requirements and allocation
Creation and measurement of key performance indicators
(KPIs)
Alignment with Best Practices
Preparation of operations manuals
 Physical Evidence

(Physical evidence is) . . . The environment in which

the service is delivered, and where the firm and
customer interact, and any tangible components that
facilitate performance or communication of the
service.
Zeithaml et al (2008)
Physical Evidence is the material part of a service.
Strictly speaking there are no physical attributes to a
service, so a consumer tends to rely on material cues.
There are many examples of physical evidence,
including some of the following buildings, equipment,
signs and logos, annual, accounts and business reports,
brochures, your website, and even your business cards.
Marketing decisions:
Facilities (e.g. furniture, equipment, access)
Spatial layout (e.g. functionality, efficiency)
Signage (e.g. directional signage, symbols, other
signage)
Interior design (e.g. furniture, color schemes)
Ambient conditions (e.g. noise, air, temperature)
Design of livery (e.g. stationery, brochures, menus,
etc.)
Artifacts: (e.g. souvenirs, mementos, etc.)
7 Ps
4Cs