The Marketing Mix
By Lisa Gallen
In this blog I will be demonstrating my knowledge on the
marketing mix and how organisations apply this marketing programme to their
business. I will be looking at several organisations to use as examples of how
they incorporate the marketing mix elements in their own way and comparing
other organisation to see how they may be the same or contrast.
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| The Markteing Mix, the 4 P's |
The marketing mix is a marketing
tool which is composed by four different elements – product, price, place and
promotion, known as the 4 P’s. These elements are there to support and
strengthen a product and its brand in order to promote it. The 4 P’s first
emerged in the late 1940’s with the theory created by the marketer Eugene
Jerome McCarthy. However, in the 1990’s, the 4 P’s was changed to the 4 C’s.
There are different theories on 4 C’s, but some say it was based on Robert F.
Lauterborn’s theory (consumer, cost, communication and convenience) or Koichi
Shimizu’s 4 C’s theory (commodity, cost, communication and channel). These
different theories are all considered to be a part of the marketing mix as each
theorist believes that all the components to their theories are all crucial elements
for organisations to consider when they start to plan the marketing of their
product or service (Acutt, 2013) .
Withal, all elements are equally important as they all support each other in
creating the brand image and a unique selling point for their product so they
stand out to the competition.
Product
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| Product and Services, keyboard graphic |
One of the crucial elements of
the marketing mix is the actual product created. The goods, service or idea
produced by the organisation is created to fulfil the consumers’ needs and satisfy
them with unique features and appearance to make it stand out from the rest of
competition on the market. If the product is a success with their customers,
this will gain loyalty from the customers and they will return. Also, good
publicity and more sales will come from returning customers as they will most
likely recommend the product to their family and friends. The product can be
intangible or tangible as it can be a physical item that you can touch, or it
can be a service or idea. Marketers also must ensure that they have the right
product that is in demand in the market. This must entail extensive research
into the product life cycle.
Products have a finite life
that goes through several stages such as the introduction, growth, maturity and
the declining stage. The introduction stage is when a new product has been
launched and is put on the market. The next stage, which is the growth stage of
the product, is when the product is becoming more popular, making the need for
improvement such as new features being added, or a new model has been created
to continue its growth. Following this stage comes the maturity stage which is
when this product is becoming outdated as lots of products on the market are
just like which then stabilises sales making it less profitable. Finally, the
last stage of the product life cycle is the declining stage where companies are
either forced out or voluntary leave the market as their product will not be
making any more money therefore making the product not suitable for the market. For example, Apple brings out new high-tech
smartphones every year such as this years iPhone 8. The life cycle stages for
the iPhone go very quickly as there are also lots of other competing companies
bringing out smartphones with unique features to out-do each other. However,
when IKEA brings a new product it will have a longer lasting life as technology
is always changing and IKEA creates furniture that can stay in style for years.
One other type of product
strategy that marketers use is the branding of products. Branding is the
process involved in creating a unique image for the product by using an
exclusive name, logo, design or slogan. If a consumer likes a product from a
certain brand, they are more likely to buy another product from the brand. One
of the world’s best loved chocolate brands, Cadbury’s, partnered with
Pearlsfisher (the worldwide branding agency) to redesigned the Cadbury Buttons
and Giant Buttons as the product line has expanded. This is to catch the
consumers eye and keep it up to date to keep them interested (Pearlfisher, n.d.) . Yet, Apple
have kept their logo the same since the brand emerged in 1976. Their logo
appears on the back of every iPhone, iPad, MacBook and any other Apple product.
This is to keep the customer to return as they know how popular Apple is and
will recognise the fashionable logo and purchase these products.
Price
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| Price Tag graphic |
How much customers pay for a
product is another important element for marketers to consider in the
production process. This is the most important component of the marketing mix
as this only one that generates cash for the organisation as all the others are
costs. There are two types of competitions in the market when introducing a new
product which is the price competition and the non-price competition. In price
competition, two products on the market which are similar are judged by
consumers on their price and will buy the least expensive out of the two. With
this, each producer will try and compete to match or beat the price of the competing
product. In a non-price competition, each producer will use factors such as
better product features, packaging, quality of product, customer service or
delivery compared to the other similar products on the market rather than the
price to increase the demand of their product. Also, the price of the
production of the product, cost of distribution, cost of advertisement and the
cost of promotion all need to be considered when deciding a price for a product
so when the product is on the market they can make a profit.
Marketers use pricing
promotions to attract a customer to purchase and try their product or service.
This could also be strategy to convince a customer who has previously purchased
the product to become a returning customer when offering a ‘Buy One Get Another
Free’ or a ‘3 for £3.00’ offer. For example, Coca Cola could have an offer on a
crate of 12 Coca Cola cans for just £5, with a big, flashy, colourful sign
attract the customer to the stand which then convinces them that this is the best
and cheapest option because they have been tricked into thinking so. Similarly,
Cadbury hold price promotions regularly with their multibuy offers when you can
buy 3 chocolate bars for the price of two. This then encourages people to buy
an extra two chocolate bars even though they were only there to buy one because
they see this price promotion.
Another way marketers
encourage people to purchase their products is with pricing tactics. Companies
may use a variety of pricing tactics to attract customers depending on the
company’s marketing goals and objectives. There are many different tactics such
as premium pricing, penetration pricing, economy pricing, price skimming and
psychological pricing. For example, Harrod’s is a luxury department store who
choose premium pricing for their products. Premium pricing is when products are
priced more expensive than other types, even though the product might be
similar to another product on the market with a cheaper price. This is to
create an illusion that the more expensive product is better because of the
price (Richards, 2005) . However,
IKEA uses the psychological pricing tactic with prices ending in 99p.
Psychological pricing is used to attract customers to buy their product as it
appears be the smart decision to buy something with an odd number rather than
even. For instance, IKEA will bring out a new lamp at £12.99 and this would be
more appealing to buy rather than a lamp priced at £13 (Skobaya, 2016) .
Promotion
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| Price Promotion image |
One way for a marketer to
promote their product is by advertising it. Advertising is key promotional
strategy to promote anything through many ways such as radio, television,
newspapers or magazines, word of mouth or print that could be on a billboard to
a poster. For example, over the years Cadbury have produced a number of
humorous television adverts from the children with the dancing eyebrows to dancing office workers that are having an
unexciting day until they eat a square of Cadbury’s Dairy Milk bar with ‘Yes
Sir, I Can Boogie’ by Baccara playing in the background. As customers wouldn’t
expect this to happen when they buy the chocolate, the catchy adverts stick in
their heads and will be more persuaded to buy the chocolate bar. However, Coca
Cola has a very unique way of advertising such as the Coca Cola Christmas Truck
Tour inspired by their iconic Christmas advert which you can view below. The advert was about spreading
Christmas cheer with a bottle of Coca Cola when Santa Claus hands out bottles
of Coca Cola to the children which was first shown on TV in 1995. Every year, a
Coca Cola Christmas Truck travels to shopping malls all around the UK for Santa
to give out free bottles of Coca Cola.
As well as Advertising, sales
promotions is also an important aspect of the promotion of a product. A sales
promotion is the process of persuading a potential customer to buy a marketer’s
new product using an incentive or a deal to potentially boost sales. The two main
types of sales promotion is consumer and trade. The consumer strategy is known
as a ‘pull’ promotional strategy as it is aimed directly at the consumer to
create a boost in sales and increase the demand for this product in the market.
The other strategy, known as the trade promotional strategy which is a ‘push’ strategy,
is aimed to attract wholesalers and retailers want to stock the organisations
product within their stores. For example, McDonalds has a ‘pull’ promotional
strategy with their Happy Meals that come with a free toy for children. This
makes the consumer want to return to the organisation as it satisfies the needs
of the children. Furthermore, Emirates Airline is another organisation with a ‘pull’
promotional strategy with their frequent flyer loyalty club, ‘Skywards’. It is
free of charge to apply and consumers who regularly fly with this airline can
start collecting air miles that they can save up to the eventually get money
off flights (Emirates Airline,
n.d.) .
Place
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| fast food restaurant, McDonald's branch sign |
The Place element of the
marketing mix is the distribution strategy which is where the location of the
products are being sold. Each type of product or service dictates what kind of
retailer your product should be located in. If an organisation owns its own
retail shop, the distribution ends with the organisation and the organisation
sells it to the consumer directly.
One way to distribute your
product to your costumers is with the intensive distribution channel. Intensive
distribution is when an organisation sells its products through many different
locations. This can be a costly way of distributing resulting in the producer
having to lower their price. For example, Rolex’s can be sold from many
up-market jewellers such as Goldsmiths or Fraser Hart. However, Apple have a
more exclusive distribution as consumers can only being purchase Apple products
at its own Apple shop.
Additionally, the location of
an organisation plays an important role in how their customers can access their
products. For example, there are 1,249 McDonald's restaurants in the UK so this
will be a very accessible for customers to be able to purchase the their meals.
However, there is only one Harrods which is located in Knightsbridge, London so
this would only allow people living in or visiting London will reach this
store.
Bibliography
Bibliography
Acutt, M. (2013, February). Definition of the
Marketing Mix. Retrieved from The Marketing Mix:
http://marketingmix.co.uk/definition-marketing-mix/
Emirates Airline. (n.d.). Skywards. Retrieved
from Emirates Airline: https://www.emirates.com/english/skywards/about/skywards.aspx
Pearlfisher. (n.d.). Cadbury. Retrieved from
Pearlfisher: http://www.pearlfisher.com/work/cadbury/
Richards, L. (2005). Different Types of Pricing
Strategy. Retrieved from Chron: http://smallbusiness.chron.com/different-types-pricing-strategy-4688.html
Skobaya. (2016, April 30). Secret behind IKEA's
pricing strategy. Retrieved from T1 2016 MPK732 Marketing Management
(Cluster B):
https://mpk732t12016clusterb.wordpress.com/2016/04/30/secret-behind-ikeas-pricing-strategy/
