Chapter-2
Marketing Mix
Chapter Outline:
Marketing Mix
Characteristics of Marketing Mix
Decisions related to Marketing Mix
Components of Marketing Mix
Limitations of 4 P’s
Marketing Mix for Services.
1.1 Introduction:
One may define marketing as: Putting the right product in the right place, at the right price, at the
right time. You just create a product that a particularly group of people want, make the target
customers aware about your product, try to sell it at some place, and price it at a level which
matches the value customers feel they will get out of it. This is marketing. But this is not as easy
as it looks. It’s very difficult to find out what customers want and what the factors that affect
their purchase decision. One mistake can imbalance your position. In such situation marketing
mix is a good tool to plan about your product i.e. its features, image, its justified price, locations
to sell from and communication about the product etc.
"Marketing mix" is a general phrase used to describe the different kinds of choices organizations
have to make in the whole process of bringing a product or service to market. The 4 Ps is one
way of defining the marketing mix.
1.2 Definition:
Blend of elements like Product, Price, Place, and Promotion in to a marketing program that
provides need satisfying goods and services for the customers is known as Marketing Mix.
Marketing mix, simply stated, is the process of designing and integrating various elements of
marketing in such a way as to ensure the achievement of enterprise objectives.
A combination of Product, Price, Place, and Promotion is known as Marketing Mix.
1.3 Origin of the term:
The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing
Association presidential address. Borden started using the term around late 1940’s in his teaching
after James Culliton described marketing manager as a "mixer of ingredients". The term became
popular after the article written by Neil Borden called “The Concept of the Marketing Mix” in
1960. The ingredients in the mix referred to Product, Price, Planning, Pricing, Branding,
Distribution Channel, Packaging, Display, Servicing and Physical handling. E. Jerome McCarthy
later on groped these ingredients into four namely Product, Price, Place, and Promotion.
2.1 Characteristics of Marketing Mix
Marketing-mix is at the core of marketing process:
Marketing ix is a link between the firm and its customers. All the four elements are combined
and integrated in a way that leads to the satisfaction of the needs and wants of the customers. It
aims to design the right product, price it at a justified level, ensures availability at convenient
place and right and timely information to the customers.
It is dynamic in nature:
Once decided marketing mix is suppose to be changed in response to the changing environment.
Changes keep on taking place in the external environment in terms of customers’ tastes and
preferences, brand loyalty and purchasing power over a period of time. The marketing manager
has to carry out market analysis constantly to make necessary changes in the marketing mix.
Changes within the firm will also lead to the changes in the marketing mix of a company.
It helps in integrated decision making:
Marketing mix ensures that all the elements are inter-related and inter-dependent. Change in one
element may affect others as well. In an effective marketing mix all elements support each other
so it creates a synergy effect. It serves as a guide and helps in integrated decision making.
3.1 Decisions of Marketing Mix:
Marketing mix involves decisions regarding:
Availability of products in the market.
Marketer has to decide about number of things related to a product while launching in the
market. He/she would need to decide about type of product i.e. Consumer or industrial product;
nature of product i.e. durable or non-durable; naming the product i.e. name or no-name, private
vs. national brand; number of products to be launched i.e. single vs. multi-product line; features
in a product and packaging and labeling of the product.
Pricing for the products.
Marketer wills have to decide about the price that he/she wishes to charge for his/her products.
Marketers need to make careful choice among the various pricing strategies available namely:
cost plus, marginal pricing, penetration, skimming, going rate pricing etc.
Place for selling the Product.
Now a days marketers have many options to sell their products namely on-line and digital
mediums like internet, direct response TV, Smart phones etc. along with the traditional channels
like wholesalers and retailers. A marketer needs to make a choice between levels (o, 1 2 and 3
Levels) and intensity (Selective, Exclusive and Intensive Distribution) of the distribution
channel.
Promotion of the products.
Customers need to be made aware of the products and services that a manufacturer has to offer
for them. A marketer has many promotional tools to choose from like advertising, direct
marketing, sales promotion, personal selling, direct marketing etc. The decision to use a
particular promotion tool depends upon the resources available, type of target audience, objective
of the communication and availability of the media.
4.1 Components of Marketing Mix/ Four 'P's
Elements of the marketing mix are often referred to as the "Four 'P's", a phrase used since the
1960's
Product:
Product is something that is offered by the marketer in the market place that would serve as a
need satisfier for the customers in return of money. A marketer has to take in to consideration
like features of the product both tangible and intangible, quality, performance, durability, image,
association etc. Packaging also needs to be taken into consideration as now-a-days its importance
can’t be ignored. Every product has a life-cycle including the phases like introduction, growth,
maturity and decline. Product manager also need to consider its uniqueness and differentiation in
order to claim its uniqueness over the other products in the market. Marketer also needs to give
due consideration to the brand name and number of product lines to be launched in the market
place.
Fig 1.1: Marketing Mix
Price:
Pricing is the monetary sacrifice made by the customer in order to enjoy the benefits of the
products and services. From the manufacturer point of view pricing is the sum of money received
for what it has sold. Pricing is the process of determining what a company will receive in
exchange for its products. A marketer is suppose to set the right price for its products so that
customers may perceive value while buying a product or service. Pricing is done via keeping
number of factors in consideration like cost, profits, distribution channel, government,
competitors etc. A firm also needs to decide which particular strategy it would use.
Place:
Distribution or Place refers to the organizations or intermediaries involved in making a product
and services available to the customers from the manufacturer. This element is also concerned
with various methods of transporting and storing goods, and then making them available for the
customer. The aim of place is to get the right product to the right place at the right time. The
distribution channel involves intermediaries like wholesalers, retailers, distributors, agents etc.
The choice of distribution channel depends on a variety of factors like nature of product,
customers and market charateristics.
Promotion:
Promotion is the communication link between seller and buyers for the purpose of influencing,
informing or persuading a potential buyer’s purchasing decision. Promotion is all about
communicating with customers. A company’s total marketing communication program
consisting of various elements like advertising, personal selling, sales promotion, personal
relations, direct marketing etc is known as promotion mix. The elements of the promotions mix
are integrated to form a consistent campaign. Promotion aims to inform, persuade and remind
customers about the products and services of the company.
4.2 Limitations of 4 P’s
This is a framework that was used initially where physical products represented the larger
proportion of the economy. Later on many people added more P’s like People, Process, Physical
Evidence as the products also transformed from its basic creation to the more advanced forms.
According to the critics, the marketing mix has an internal orientation focusing on internal
processes and ignores the customer orientation as it doesn’t consider the elements of customer
feedback and interaction as a basis for building up relationships and retention.
The framework has been perceived having a product push nature rather than ‘collaborative’
character. Some critics have given product mix a mass marketing character as no interactivity
and personalized communication is supported in the model. Human factor has been absent in the
framework given by Kotler whereas it is the most important element in case of services. The
model is not interactive at all as it ignores the fact that customers are getting more value
demanding day by day and want more control over the communication and transaction. One-to-
one communication and relationship building are also fundamental elements of services
marketing not adequately addressed in the 4Ps.
Some people have gone one step ahead and have even demanded the replacement of the 4 P’s
framework with 4 C’s, 4 E’s and SIVA model.
4 P’s 4 C’s SIVA Model 4 E’s
Product Customer Solution Solution Experience
Price Cost Value Exchange
Place Convenience Access Everyplace
Promotion Communication Information Evangelism
Table 1.1: Replacement of 4 P’s
Despite all the criticism it faced it still continues to be the important tool in the market place. A
strong product, with the right price at the right place offered to the customer is an ideology that is
really had to change.
5.1 Marketing Mix for Services / 7 P’s
4 P’s described earlier is one of the many marketing mix lists that have been developed over the
years. Amongst the other marketing mix models developed over the years is Boom and Bitner's
7Ps, sometimes called the extended marketing mix, which include the first 4 Ps, plus people,
processes and physical layout decisions.7 P’s framework is generally used for Services.
Fig 1.2: 7 P’s of Marketing Mix
The additional three P’s are explained as under:
People
Involvement of human beings is a striking feature of all the services. People in the services refer
to the employees and the customers. It is very essential to use the appropriate staff and people in
services. Recruiting the right staff and training them appropriately in the delivery of their service
is essential as consumers make judgments of the service based on the employees they interact
with. Staff should have the appropriate interpersonal skills, aptitude, and service knowledge to
provide the service that consumers are paying for.
Process
Process refers to the systems or procedures used to assist the organization in delivering the
service. Imagine you go to McDonald to have a burger and French fries and you get your stuff
within 2 minutes. This is the result of the process that allowed you to obtain an efficient service
delivery.
Physical Evidence
Physical Evidence refers to the place where the service is delivered. It is the element that allows
the consumer to make judgments on the organization. Physical evidence includes the facility,
layout, color, ambience, temperature, dress code of the employees etc.
6.1 Examples of Marketing Mix
Fig 1.3: Nokia Handset
NOKIA
Product: Great Variety, Strong Brand Image, Many designs and number of features.
Price: Prices range from 1500-50,000 Rs. Skimming Pricing Policy and Cash allowances
Place: Tie up with HCL for distribution in India, available through Nokia Priority Centers, also
available through dealers and retailers.
Promotion: Excellent use of electronic media advertising and sales promotion tools. Print media
and outdoor media also efficiently used. Gifts like Yamaha bike, Philips TV, Mitsubishi split
AC, watches and digital diary given free with various models.
PANTALOON RETAIL
Product:
It has divided its retail business into two segments i.e. Lifestyle and Value.
Under the lifestyle segments various brands are as follows:
Pantaloons -Pantaloons stores have a wide variety of categories like casual wear, ethnic wear,
formal wear, party wear and sports wear for Men, Women and Kids.
Brand Factory: The stores offers a wide range of products including apparels for men and
women, infant wear, accessories, cosmetics, footwear, sportswear, luggage, home linen and
much more. Brand Factory has several Indian and International fashion brands including Levis,
Pepe Jeans, Dockers, Wrangler, Provogue, Arrow, Nike, Adidas, Reebok, Louis Phillip, Allen
Solly, Reid & Taylor, and Gini & Jony amongst others.
E-zone – electronic speciality store that offers products like computers, laptops, handycams, MP
3 players and mobile phones. Entertainment products such as Plasma / LCD, Flat TVs, Home
Theatre systems, DVD players, Stereo systems, Refrigerators, Air-Conditioners, Washing
Machines and Microwave ovens.
Central:-Central houses over 300 brands across categories such as apparel, footwear and
accessories for women, men, children and infants apart from a whole range of Music, Books,
Coffee Shops, Food Courts, Super Markets (Food Bazaar), Fine Dining Restaurants, Pubs and
Discotheques. The mall also has a separate section for services such as Travel, Finance,
Investment, Insurance, Concert/Cinema Ticket Booking, Bill Payments and other services. In
addition, Central houses Central Square, a dedicated space for product launches, impromptu
events, daring displays, exciting shows, and art exhibitions.
Planet Sports:- India's largest multi-brand sports and lifestyle speciality retail chain, Planet
Sports offers the largest collection of International sports and lifestyle brands. Planet Sports
stores have extensive offerings for sportswear and equipment across all categories including
running, tennis, training, golf, fitness, basketball, motor sports as well as other lifestyle products.
Home Town – It is one stop destination for all the home needs. It offers products like Furniture
Bath and Sanitary Ware, Modular Kitchens, Paints and Wallpaper, Tiles and Wooden Flooring,
Carpentry and Hardware, Electricals and Decor Lighting, Electronics, Furnishings and
Accessories etc.
Value: under the value segment, various brands are:
Big Bazaar: Big Bazaar is a hypermarket that caters to every need of the family. It has
positioned itself on the value for money preposition. It stores merchandise including categories
like fashion, home furnishings, utensils, crockery, cutlery, sports goods and much more at prices
that will surprise you. And this is just the beginning.
Food Bazaar: Food Bazaar is a chain of supermarkets that offers food items with convenience,
cleanliness and hygiene through the bazaar-like atmosphere created by displaying staples out in
the open. The best of everything offered with a seal of freshness and purity will definitely make
your final buying decision a lot easier.
Fair Price: KB’s FairPrice are neighborhood stores spread across an average area of 1,000 to
1,500 sq. ft. These are simple but modern, self-service ration shops. These stores retail only 300
essential products at simply the lowest prices in town.
Other brands of Pantaloons include Brew Bar – a beer bar, Café Bollywood – a national chain of
eateries, Chamosa – a pan-Indian chain of snack counters, aLL, Blue Sky, Etam, Fashion Station,
Gini & Jony, Navaras, Bowling Co. – state-of-the-art premium family entertainment centre,
offering multiple, novel and unique leisure and entertainment options and F 123 - offers a wide
range of gaming options ranging from bowling and pool to redemption and interactive video
games to bumper cars.
Price:
Pantaloons Retail revolutionized the Indian retail scenario with its pricing strategies. It can be
seen in Food Bazaar and Big Bazaar. It mainly focuses on value for money aspect.
Place:
Pantaloons serve customers in 85 cities and 60 rural locations across the country through over 15
million square feet of retail space. Through multiple retail formats, it connects a diverse and
passionate community of Indian buyers, sellers and businesses. Around 220 million customers
walk into the stores each year and choose products and services supplied by over 30,000 small,
medium and large entrepreneurs and manufacturers from across India.
Promotion:
Pantaloons uses magazines, newspapers, television, radios, hoardings, internet etc for promoting
the brand. They have joint ventures and alliances with many companies to promote the brand.
Seasonal Discounts, Sales Discounts during Festivals are offered to attract consumers.
People:
The management hires people for the top end from the other reputed companies. It has also tie up
with some management schools to provide the pool of talent for the junior level. Many a times,
company has been ranked as the best employer.
Process:
Pantaloons Retail has implemented SAP with an investment in keeping pace with the technology.
SAP is helpful in building robust transaction management system.
Physical evidence:
It has a huge list of awards, recognition in its kitty like Most Admired Fashion Group Of The
Year, Most Admired Food & Grocery Retailer Of The Year , Most Admired Food Court , Most
Admired Retailer of the Year, ,Most Admired Food & Grocery Retailer of the Year –
Supermarket
Summary:
This chapter basically dealt with marketing mix. Marketing mix is a term that refers to
combining P’s of marketing namely Product, Price Place and Promotion which are used to
achieve the organization’s objective. We also discussed the P’s framework this is used in case of
service which adds three more P’s to the 4 P’s which are process, physical evidence and People.
The chapter also entailed discussions regarding criticism of 4 P’s approach and its gradual
replacement by other components. Characteristics of marketing mix were also discussed along
with examples.
Review Questions:
Q.1 What do you understand by the term marketing mix? What are the major elements of
Marketing Mix?
Q.2 Explain the 4 P’s approach of Marketing Mix with examples.
Q.3 What are the major decisions taken in marketing mix approach? What are the characteristics
of marketing mix?
Q.4 How marketing mix for products is different from that of services?
