What makes up the marketing mix?

One of the major failings of business owners is their preoccupation with the specific product or service they have to offer. This is usually at the expense of other marketing elements that they have failed to consider.

Marketing is complex, therefore all decisions and plans must be based on the evaluation of all of the components affecting the product or service, including pricing, distribution and promotion.

The objective of the marketing mix is:

• to place the right product (PRODUCT)
• at the right price (PRICE)
• in the right location (PLACE or distribution), and
• to make the right consumer aware that this product is available to satisfy their needs (PROMOTION).

The marketing mix is also known as the "4 Ps''.

This marketing process requires strategies and decisions on each of these elements. The interaction and interrelationship of all of these four elements must be considered, each factor cannot be treated in isolation.

Product

The product components to consider include research, development and testing, the number of items to be included in the product line, packaging, branding, and the issues of product launch.

Price

Pricing decisions will include assessment of the market conditions and competition, desired target returns on investment, product positioning, and image through price/quality relationships.

Distribution

This is often referred to as the "place decision" and refers to the method or location for distribution. Decisions must be made as to whether you retail or wholesale, how many participants there will be in the distribution process, and in which physical locations each of the types of the product will be made available.

Promotion

Without question, promotion is one of the most complex elements in a marketing effort. Many business owners think of promotion as advertising. This is wrong. Every product or service should have a promotional mix - that is a range of promotional options based on the needs of the marketplace and the characteristics of the product. It includes direct advertising, personal selling by sales representatives, sales promotion and premiums, unpaid direct promotion, public relations, and publicity. These elements form the promotion mix.

The promotion mix

The aim of promotion is to communicate and create awareness that the business has a product or service that will satisfy an individual's needs. Unless the market is made aware that the product exists, then all the costs and decisions made in creating the product will have been for nothing.

Promotion is not only complex, but represents a significant proportion of the total operating expenses of any business.

Highlight

Remember that promotion by itself can't sell a product or service if the need for that product or service is not there. Promotion can't create need and will not push the consumer to purchase. The function of promotion is to create awareness and convey information.

The factors of promotion

Promotion consists of five elements which together make up the promotion mix:

• advertising
• personal selling
• sales promotion
• publicity, and
• public relations.

Each business needs to select the elements for the promotional mix that are relevant and compatible with its product, the stage in its business life cycle, the channel of distribution, and the media and communications behaviour of the target market. But in most situations a combination of promotional elements will be required to achieve the desired goals.

There is no point in spending great sums of money on media that do not reach the target market, so the promotional mix must be designed backwards from the market. Expertise is readily available from marketing consultants and advertising agencies, who can plan promotional expenditures to maximise the desired impact.

The promotion mix decision factors

There are several factors influencing the decision as to a promotion mix.

Consumer characteristics - The characteristics of the consumer must be matched to the promotion utilised:

• If the market covers a large geographic area then advertising is probably the most effective approach and mass media will usually be required.
• If the consumer is a select group of individuals then personal selling may be ideal.
• If the main consumers are larger commercial enterprises, mass media advertising plus sales promotion and personal selling may be needed.

Product factors

Promotion must be tailored to the characteristics, features, and applications of the product or service being sold.

If the product is new, then demonstrations of the use and benefits are often required. This is where visual media, eg television and print, combined with in-store demonstrations can be effective.

If the product is complex and technically sophisticated, then personal selling is also the best approach.

For low-cost mass-market consumer goods, sales promotion through free sampling to induce trial and repeat purchase combined with advertising is a reasonable combination (think about free trial packs of shampoo inserted into magazines or mailboxes, etc).

The above examples or alternatives show the complexity of the decision.

 Tip

You will probably spend more on the promotional mix during a product's initial stages when your goal is making the market aware that your product or service exists.

Distribution factors

The nature and type of distribution to be used for the product is very relevant to the promotional mix.

If the business is a manufacturer, promotion must not only be to consuming markets, but it must also be directed to wholesalers, distributors, and retailers. This promotion, combining personal selling, advertising and sales promotion, is designed to support the channels of distribution and encourage their distribution of the product. The longer the channel of distribution, the greater and more complex the promotion decision.

If the business is a retailer then it should only be concerned with the direct promotion of its products to the consumer.

Company factors

The size and scale of operations of the business have a direct relationship to the promotional mix. New and smaller businesses with limited budgets may only be able to afford brochures, some direct mail and perhaps personal selling. Obviously the promotion budget determines the promotional mix.

Competitive factors

The general trend for most small businesses is the "follow the leader" approach - duplicating the activities of competitors. If, however, your goal is "differentiation" then this is not a wise strategy. No business is exactly like its competitors, so a promotional mix should reflect an awareness of competitors, but should include a mix that truly reflects the marketing objectives and character of the business.

Promotional budget

Let's face it - resources are nearly always limited, and rarely is there enough to cover the costs of everything you would like to do in terms of marketing and promotion. This "leftovers" philosophy can prove to be dangerous, particularly for new businesses. 

In times of recession, the trend in many sectors is to cut back on promotion as media costs rise sharply. However, during economic downturns, if competitors are reducing promotional activities, then the best response would be to increase the promotion planned to gain a marketing edge and potentially to increase market share.

More on Marketing click on the topics below

• Marketing Research

• Market Segmentation

• How to write Marketing Plans

• Cost Effective Marketing

• Cost Effective Advertising

 

"Marketing should be integrated into your main business function, and money must be allocated to establish the business and create awareness of products or services. This is a first priority for business survival."