Marketing is integral for the growth of any business or brand. Marketing is simply defined as the act of promoting a brand’s product or service. This would include any action from market research to advertisements. The problem is that most businesses do not have a solid marketing strategy in place. A lot of work and research is required for any marketing plan to be effective.
One way to ensure the creation of an effective marketing plan is by developing a marketing mix. The marketing mix is a tool that would help you determine the products or services you want to offer and also the creation of the right strategies to successfully market these products or services. To properly execute the marketing mix, you would need to understand the concept of the four marketing Ps: Price, Product, Place,and Promotion.
The four marketing Ps concept is very important. It plays a huge role from when you start creating the product, to its first marketing offering.
Outline of the article:
- The four marketing Ps
- How to use the 4 Ps of marketing�
- History of the marketing mix
- Features of marketing mix
- How to develop a marketing mix
Let’s get started.
The four marketing Ps
The concept of the marketing mix are sectioned into four key elements. Missing one of the elements can prove detrimental to your marketing plan. In this chapter, we would see what these elements represent.
Product
This the first element of the four marketing Ps. A product is an item or service that is offered for sale. The item can either be physical or exists in a virtual form, i.e, it can be tangible or intangible.
A valuable product is one that serves the need of a customer. The product has to be relevant to the customer, functional, and also of high quality.
There are three key features that a product must have:
A product should have a clear value proposition:Your potential users or target audience must be able to identify what they stand to gain from using your product. They need to understand the benefits your product offers and how it improves the quality of their lives.
A product must have a name:Your product should not just have any name, it must be a name that people can easily remember. The name is the basis on which your brand would be born. A great name helps your brand to stand out and can also make your brand memorable.
Read this guide onhow to name a new business of startup to help you get started.
A product must be adaptable:Consumer tastes and market trends change regularly. You should strive to create a product that is relevant no matter the changes that occur to the market.
Before you can successfully market a product internationally or locally, you need to understand what is unique about it.
To get started with the product creation process, these are some questions that you should answer:
- What need would your product/service satisfy?
- What features does your product have that would enable it to satisfy these needs?
- How would your customers use this product; can the product work offline or would it require internet access?
- What would the customer experience feel like when using your product?
- What are the physical features of the product, e.g, size, shape, color, etc.?
- What would you call the product?
- How would the product be branded?
- What makes your product different from your competitors?
- Are the features that you added to the products that customers would not use? If so, you should cut it off to make the product lighter and cost-effective.
Price
Once you have a detailed understanding of what your product is, the next step would be the pricing. In simple terms, pricing is the act of setting a value on a product. While the term might sound simple, a lot of people confuse costs for price.
Priceis what the customer (buyer) would pay for the product or service
Costis the investment of the seller in the product that is about to be sold.
There are three general approaches that a buyer can use in setting the price of a product. They include:
Cost-based pricing:
Cost-based pricing approach is usually based on theory than in real life market conditions. This approach ignores what other sellers have set for a price for the same or similar product. Instead, the seller would set a price in relation to how much it cost him to create that product.
It uses the manufacturing cost as the final basis to determine how much the product would cost. This strategy is simple and straightforward and can ensure a consistent rate of profit generation. The biggest disadvantage is that products can become underpriced or overpriced.
Competitive pricing
This is the approach where the sellers look at the prices of the competition before setting their own price. After finding out the price of the competitor’s product, the seller might decide to set the same price or more competitively, reduce the price of their own offer by a small percentage.
Competitive pricing is also called market-oriented pricingbecause businesses would consider the prices of the product in the market instead of analyzing their own cost.
A company can only adopt a competitive pricing approach after they have carefully studied the pricing strategy of their competition.
The three options that a business using the competitive pricing approach has are:
- Setting a price that is lowerthan what is offered by your competition
- Setting a price that is higher
- Or setting a price that matches the one set by your competition.
Demand-based pricing
The demand-based pricing approach is affected either through an increased or a diminishing demand for a product or service. Pricing is set using consumer demand (and therefore perceived value) of a product or service.
There are three methods that can be used to implement demand-based pricing. They include:
- Price skimming:First, prices of products are set so high that only buyers with high purchasing power can buy the product. After a while, the prices would be reduced so that buyers who couldn’t afford the product initially would now be able to. Lastly, the price would be set at the point where the company can operate in profit.
- Price discrimination:Prices are set based on the difference in demand. For example, as the travel date of an airline ticket gets closer, the prices of the ticket increases. Price discrimination also occurs when the price of a product changes depending on the location it is being sold.
- Price penetration:This is the opposite of price skimming. In this approach, the price of the product is kept very low so as to attract more customers. The approach is best when you are trying to increase your market share.�
These are some questions you should answer when you are setting the price of your product:
- Would they have to purchase it themselves or would you deliver it?
- What is the value of the product or service to the buyer?
- What discounts are you willing to offer your customers?
- What do your competitors do and how can you use their pricing to your advantage?
- How will an increase or decrease in price affect your profit margin and market share?
Promotion
The product is all set and you have chosen the best price to sell the product, the next step would be promotion. Promotion is any marketing communication that is used to persuade a target audience of the merits of a product or service.
Brands make use of promotion to either increase brand awareness, create interest for their product, increase sales, generate leads or increase brand loyalty.
For example, you just launched a new software. You are very confident of the value that your product can offer. The only problem is that your target audience does not know about this software. Well, how can they find out about the software? Through promotion.
Promotional activities are very important, especially when you are a new brand without any customer base already.
Promotion can take several forms. It can range from advertising, direct marketing, sales promotion, social media marketing, email marketing, video marketing, personal selling, public relations, and more.
Some important questions to answer:
- When and how can you get your promotional marketing messages to your target audience?
- Which advertising channel would you use to reach your audience?�
- What is the best time to promote your product?
- Are they any environmental issues that might affect the launch of your product?
- Which promotional strategies do your competitors use? And how does it affect your own promotional strategy?
- What is your marketing budget?�
Place
Location is one of the most crucial aspects of marketing. Your location would influence your ability to market yourself and face your competition.
Your location will determine your cost of operation, the taxes you would have to pay, and the regulations to follow.
Even with the rise of technology, virtual communication, and cloud businesses, the physical location of your business is very important. If your business is very far from your target audience, it might be difficult for them to find you. When your target customers cannot locate your business, it would be difficult to generate a good return on your investments.
When deciding on the location of your business, these are some questions you need to answer:
- Are the profits of your company reliant on customer traffic?
- Do you rely on suppliers to get your goods?
- How important is brand visibility to you?
- How accessible do you want your company to be?
- How can you access the right channels for distribution?
How to use the 4 Ps of marketing
The four marketing Ps are very important in helping you determine how you would offer your product or service to the market.
Another significant advantage of the 4 Ps of marketing is it can help you test the efficiency of the marketing strategy you already have in place.
Whether you are trying to market a new product or trying to optimize your existing marketing strategy, use the following steps to help you increase the efficiency of your marketing mix.
Step 1: Decide the product or service you want to optimize.
Step 2:After you have decided on the product, the next step would be to go through and answer the 4Ps questions as shown above.
Step 3:To optimize your product, it is important to ask questions. For example, ask why you need to add a particular feature? What if you reduce the size of the product and added more colors? What would reducing the price of the product mean to your profits? What channels of distribution and promotion would be most efficient? Why should you use wholesalers instead of retailers?
Step 4:After you have defined your marketing mix, the next step would be analyzing your marketing strategy from the perspective of the customer. You would do this by asking customer-focused questions. For example,
- Does my product offer any value or meet the needs of the customer?
- Will they easily find your product in the stores they shop?
- Will the price of the product be favorable to them?
- Will your promotion channels get to them?
Step 5:Keep on analyzing and reviewing your marketing mix until you are satisfied with it. It is important that you review the marketing mix regularly because certain changes and trends in the market cause some elements to change. You need to review your mix so that you can keep up with your competition.
History of the marketing mix
The term marketing mix became popular after Neil Borden published an article titled “The Concept of Marketing Mix”in 1964. According to him, he was inspired to use that term by James Culliton who described marketing managers as ‘mixer of ingredients’ in 1940.
In his article, Borden explained the elements of this mix to be product, pricing, promotions, distribution, packaging, display, advertising, planning, among others. Later on, E. Jerome McCarthy combined all the elements into four categories that are now known as the 4 P’s of marketing.
E. Jerome McCarthy defines these four elements as “the basic, tactical components of a marketing plan”.
Features of marketing mix
The four marketing Ps were created by experts to ensure the creation of an efficient marketing strategy. With these tools, marketers can create a strategy that would satisfy both the seller and the buyers of the products.
These are some key features you need to know to help you understand the entire process better:
Interdependent variables
The marketing mix is made of four elements. The elements or variables cannot stand on their own. For your marketing plan to work, each of the variable must work in conjunction with one another. The four variables complement each other. If one of the variables is not working, the whole system would break down.
Fluid concept
The concept of the marketing mix is fluid and flexible. None of the variables are constant. Every aspect of the mix is subject to change. One or more of the variables might be increased or decreased depending on the conditions of the market, customer requirements, trends & technological changes.
Constant monitoring
The market can be volatile and subject to regular changes. New trends come up and the only way you can keep up with your competitors is to constantly update your marketing mix and make it relevant to your industry. It is important to always keep an eye on the changes in trends that occur in your industry.
The customer as a focal point
A feature that determines if your marketing mix would be successful or not is your customer. The customer is focal to any activity when creating your marketing plan. The value of your product is determined by customer perception. If the customers cannot define your value proposition, it would be difficult for you to make any profit. When creating your marketing mix, your number one goal should be delivering value to the customer.
Importance of the marketing manager
You would require a skilled and experienced marketing manager to be in charge of executing the marketing mix. Your marketing manager would be in charge of executing strategies and ensuring that all variables of the four marketing Ps are optimized.
Achieving marketing goals/objectives
The marketing mix helps you to achieve your marketing/business goals. Through the use of these variables, you can increase sales, brand awareness, profits, customer retention, and engagement.
How to develop a marketing mix
To ensure that you have an efficient marketing mix, you need to create a system that is based on research, facts, and innovation. There is a step-by-step process you need to follow to get the job done right. These steps are:
Step 1: Develop a unique selling proposition (USP)
The first step you need to take when creating your marketing mix is to define your unique selling proposition (USP). You need to define the value your customer would gain from using your product or service.
A good way to define your unique selling proposition is by running customer surveys. Customer surveys would help you understand whether your USP is intriguing to the customers and if they would be interested in your product. When you have clearly defined your USP, you would be able to understand which key features to promote in your marketing campaign.
Step 2: Define your customer
The next step would be to define who your target customer is. You can only know how to market your product effectively when you know who would be buying it. All the other variables in the marketing mix would be a waste of time if you do not really understand who your target customer is.
You should ask these questions:
- Who are the customers?
- What needs do they have?
- What value would my product offer them?
Answering these questions would help ensure that your product is relevant to the customers and also helps in the marketing process.
Step 3: Define your competition
Your next step would be defining who your competition is. Understanding your competition would help you compete better. When you understand your competition, you can figure out how to set prices, whether you need to offer discounts or special offers to your customers.
Some times, your competitors might be doing things more efficiently than you. It is okay to steal their best ideas and improve on them. This way you can always stay in demand.
Step 4: Evaluate Placement options
The placement options help marketing managers to understand which location the customer is most likely to make a purchase and the cost that is associated with each marketing channel.
Having multiple marketing channels would help increase the ease of customers accessing your product and also your market reach.
On the other hand, if your product is niche-based, it is best to concentrate on distributing your product in a specific location or marketing channel. This would ensure that your customers will find you easily. If you have the best product but your customers find it difficult to locate your products, you would not earn profits.
Step 5: Develop a communication/promotional strategy
Your communication and promotional strategies are key features that help you get your products to your targeted customers. You need to develop a communication strategy to help communicate to your customers what they would gain from making use of your product or service.
With a great promotional strategy, you would be able to increase market awareness. The more people that know about your product, the more revenue you can generate.
Step 6: Constantly analyze your marketing mix
At regular intervals, you need to take a step back and analyze your marketing mix. Your marketing mix is interdependent of each other so you need every variable to be working optimally for a strong marketing strategy. Once every factor of the marketing mix is regularly cross-checked, it would be easier to adapt to any change in the industry.
Conclusion,
The marketing mix is very important in creating a strategy to successfully position your product in the market.
The four marketing Ps are key elements of the marketing mix that would help you define your marketing options. It is important that a business focuses on every aspect of the marketing mix when creating a product.
With these models, you would be able to create a new product, optimize an existing offer, improve your market reach in your target industry. An effective marketing mix can be the difference between a successful market offering and one that fails.
Which tips or strategies did you think I should have added that is not in this article?