What is the marketing mix?

Once a firm has defined its target market and identified its competitive advantage, it can create the
marketing mix, which is based on the 5Ps discussed earlier, that brings a specific group of consumers a
product with superior value. Every target market requires a unique marketing mix to satisfy the needs of
the target customers and meet the firm’s goals. A strategy must be constructed for each of the 5Ps, and
all strategies must be blended with the strategies of the other elements. Thus, the marketing mix is only
as good as its weakest part. For example, an excellent product with a poor distribution system could be
doomed to failure. An excellent product with an excellent distribution system but an inappropriate price
is also doomed to failure. A successful marketing mix requires careful tailoring. For instance, at first
glance you might think that McDonald’s and Wendy’s have roughly the same marketing mix. After all,
they are both in the fast-food business. But McDonald’s targets parents with young children through
Ronald McDonald, heavily promoted children’s Happy Meals, and in-store playgrounds. Wendy’s is
targeted to a more adult crowd. Wendy’s has no playgrounds, but it does have flat-screen TVs, digital
menu boards, and comfy leather seating by a fireplace in many stores (a more adult atmosphere), and it
has expanded its menu to include more items for adult tastes.

1. Product Strategy

Marketing strategy typically starts with the product. Marketers can’t plan a distribution system or set a
price if they don’t know exactly what product will be offered to the market. Marketers use the term
product to refer to goods, services, or even ideas. Examples of goods would include tires, MP3 players,
and clothing. Goods can be divided into business goods (commercial or industrial) or consumer goods.
Examples of services would be hotels, hair salons, airlines, and engineering and accounting firms.
Services can be divided into consumer services, such as lawn care and hair styling, or professional
services, such as engineering, accounting, or consultancy. In addition, marketing is often used to
“market” ideas that benefit companies or industries, such as the idea to “go green” or to “give blood.”
Businesses often use marketing to improve the long-term viability of their industries, such as the
avocado industry or the milk industry, which run advertising spots and post social media messages to
encourage consumers to view their industries favorably. Thus, the heart of the marketing mix is the
good, service, or idea. Creating a product strategy involves choosing a brand name, packaging, colors, a
warranty, accessories, and a service program.

Marketers view products in a much larger context than is often thought. They include not only the item
itself but also the brand name and the company image. The names Ralph Lauren and Gucci, for instance,
create extra value for everything from cosmetics to bath towels. That is, products with those names sell
at higher prices than identical products without the names. Consumers buy things not only for what
they do, but also for what they mean.

It is important for marketers to reinvent their products to stimulate more demand once it reaches the
sales decline phase.
Marketers must also create the right product mix. It may be wise to expand your current product mix by
diversifying and increasing the depth of your product line.

All in all, marketers must ask themselves the question “what can I do to offer a better product to this
group of people than my competitors”.

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?

2. Pricing Strategy

Pricing strategy is based on demand for the product and the cost of producing that product. However,
price can have a major impact on the success of a product if the price is not in balance with the other
components of the 5Ps. For some products (especially service products), having a price that is too low
may actually hurt sales. In services, a higher price is often equated with higher value. For some types of
specialty products, a high price is expected, such as prices for designer clothes or luxury cars. Even
costume jewelry is often marked up more than 1000 percent over the cost to produce it because of the
image factor of a higher price. Special considerations can also influence the price. Sometimes an
introductory price is used to get people to try a new product. Some firms enter the market with low
prices and keep them low, such as Carnival Cruise Lines and Suzuki cars. Others enter a market with very
high prices and then lower them over time, such as producers of high-definition televisions and personal
computers.

Consequently, prices too high will make the costs outweigh the benefits in customers eyes, and they will
therefore value their money over your product. Be sure to examine competitors pricing and price
accordingly.
When setting the product price, marketers should consider the perceived value that the product offers.
There are three major pricing strategies, and these are:

Market penetration pricing

Market skimming pricing

Neutral pricing

Here are some of the important questions that you should ask yourself when you are setting the product
price:

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?

3. Place (Distribution) Strategy

Place (distribution) strategy is creating the means (the channel) by which a product flows from the
producer to the consumer. Place includes many parts of the marketing endeavor. It includes the physical
location and physical attributes of the business, as well as inventory and control systems, transportation,
supply chain management, and even presence on the web. One aspect of distribution strategy is
deciding how many stores and which specific wholesalers and retailers will handle the product in a
geographic area. Cosmetics, for instance, are distributed in many different ways. Avon has a sales force
of several hundred thousand representatives who call directly on consumers. Clinique and Estée Lauder
are distributed through selected department stores. Cover Girl and Coty use mostly chain drugstores
and other mass merchandisers. Redken products sell through hair salons. Revlon uses several of these
distribution channels. For services, place often becomes synonymous with both physical location (and
attributes of that location such as atmospherics) and online presence. Place strategy for services also
includes such items as supply chain management. An example would be that an engineering firm would
develop offices with lush interiors (to denote success) and would also have to manage the supplies for
ongoing operations such as the purchase of computers for computer-aided drafting.

Understand them inside out and you will discover the most efficient positioning and distribution
channels that directly speak with your market.

There are many distribution strategies, including:

Exclusive distribution

Selective distribution

Franchising

Here are some of the questions that you should answer in developing your 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?

4. Promotion Strategy

Many people feel that promotion is the most exciting part of the marketing mix. Promotion strategy
covers personal selling, traditional advertising, public relations, sales promotion, social media, and e-
commerce. These elements are called the promotional mix. Each element is coordinated with the others
to create a promotional blend. An advertisement, for instance, helps a buyer get to know the company
and paves the way for a sales call. A good promotional strategy can dramatically increase a firm’s sales.

Public relations plays a special role in promotion. It is used to create a good image of the company and
its products. Bad publicity costs nothing to send out, but it can cost a firm a great deal in lost business.
Public relations uses many tools, such as publicity, crisis management strategy, and in-house
communication to employees. Good publicity, such as a television or magazine story about a firm’s new
product, may be the result of much time, money, and effort spent by a public-relations department.
Public-relations activities always cost money—in salaries and supplies. Public-relations efforts are the
least “controllable” of all the tools of promotion, and a great deal of effort and relationship-building is
required to develop the ongoing goodwill and networking that is needed to enhance the image of a
company.
Sales promotion directly stimulates sales. It includes trade shows, catalogs, contests, games, premiums,
coupons, and special offers. It is a direct incentive for the customer to purchase the product
immediately. It takes many forms and must adhere to strict laws and regulations. For example, some
types of contests and giveaways are not allowed in all the states within the United States. McDonald’s
discount coupons and contests offering money and food prizes are examples of sales promotions.

Social media is a major element of the promotion mix in today’s world. Most businesses have a
corporate website, as well as pages on different social media sites such as Facebook, Pinterest, and
Twitter. Social media is more powerful as a channel for getting the company’s message out to the target
market (or general public) than traditional advertising, especially for some target markets. Companies
(and even individuals) can use social media to create instant branding. E-commerce is the use of the
company website to support and expand the marketing strategies of the 5Ps. It can include actual “order
online” capabilities, create online communities, and be used to collect data from both existing and
potential customers. Some e-commerce websites offer free games and other interactive options for
their customers. All of this activity helps to build and strengthen the long-term relationships of
customers with the company.

In creating an effective product promotion strategy, you 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?