Marketing mix is composed of 4 basic ingredients generally known as 4Ps of marketing. All the marketing activities revolve around these 4Ps of marketing, which are product, price, place and promotion. There are 3 additional P’s that are also becoming important recently, but still these 4Ps of marketing are considered as the basis of the whole marketing process.
If a company wants to be successful in these competitive environment and globalization, then it should keep its basic ingredients diversified and unique. Also this is a one way of getting competitive advantage over your competitors.
4Ps of Marketing Mix – Basic Ingredients
The 4Ps of marketing mix starts with the product. Product actually specifies the “thing” that you sell to others. It can be in the form of physical product, service, idea, or information etc. In today’s diversified world, the product concept has become totally changed. Now a company itself cannot take any decision about the product to be sold, or rather, selects the product by analyzing the market (customers) to find any unsatisfied need. The success of any business in the selection of a potential product is basically based upon the unsatisfied need or want. This would create a potential demand for the product of the company, even before the manufacturing of the product. So an efficient marketer analyzes the unfilled gaps in the markets, and tries to mold his product offerings in order to complete that gap. For example, due to industrialization the families are condensing in their size. Therefore, the marketers should extend its product into smaller size so that the high demand of such families should be satisfied.
There is also a strong impact of the product of a business upon its other functions. For example, a company starts a new innovating product in the market. It will influence the other functions of the business in the following ways.
- The production department is affected by such a way that, they will have to find a way to increase the productivity of the new product, so that they could create an adequate quantity of the product to manage the demand.
- As the new product launches in the market, the competitors also start manufacturing imitating product. So, again the R & D department is influenced to create some changes in the features (etc) of the product in order to get the competitive advantage.
- The pricing strategy is also reviewed by the top management to adjust according to the new changes in the market.
- Even the marketer himself is also affected greatly by the product element of the marketing mix. He has to work as a team member with other departments to make the product more effective.
Price is plays an important role in the marketing process as customers are always sensitive to the price. Therefore, the price should not set by the management, infect marketer should make a careful analysis of the market. The marketer checks the buying potential of the targeted customers, the prices along with the products of the competitors. After that he prepares a price graph that contains different possible prices, and the final price is set from these combinations.
The main focus of the pricing strategy is that the price should not be more than the value of the product or service. This means that whatever the price of a product or service is, the consumers perceive that they are availing more value or satisfaction than the cost they are paying. When a company starts a new product, generally it keeps its price comparatively low, because the product is new to the customers. As the product becomes famous in the market, its demand increases, then it allow them to increase the price automatically.
Price also affects other functions of the business like; the production department is suggested to increase the productivity of the product, so that the price of the product is reduced.
- Place (Distribution)
Place or distribution means the availability of the product or service to the target customers. When a company launches a new product, then it will not earn any revenue until it places the new product at a place that is convenient for the customers. So, the company develops appropriate distribution channels for distribution of its product in efficient manners.
The decision about the distribution channel is very significant for the success of the business. The company can analyzes its strengths and the market condition in order to decide either it should delivers its products to customers through a chain of distributor, wholesaler & retailer or it should apply its direct sales force. Another important aspect of distribution is that the company also takes into account the geographical location of the distribution channel, which means that either it should place its product nationally, regionally or internationally. The distribution element of marketing mix affects the other departments of the business as the designing and packaging of the product changes according to the location of the product. The supply chain is also influenced by the distribution decision of the product, like the transportation, logistics and warehousing, etc.
It is the most effective element of the 4Ps of Marketing mix. Promotion is related to the communication with the target customers about the product’s awareness. In simpler words, if a company does not introduces its product in the market, then how its sales can be increased? Therefore, businesses are spending huge amount in this area of marketing mix in order to attract high traffic of customers towards their offerings in the competitive world.
For this purpose, there are certain methods or ways that are employed by most of the companies, which are as follow.
- Sales Promotion
It includes special offers, like free samples, rebate offers, coupons etc that are offered to the people on the purchase of relative product or service.
It includes ads, magazines, billboards, TV & radio commercials and also ads of websites etc. All of these serve as messages that are one way in nature to develop the interest of particular product or service in the market. Repetition of advertising messages is important to accomplish their goals.
- Public Relation
These are non-paid news messages that create a positive image of a products or services in the market. For this purpose, probably companies take parts in social and charity work, and try to create a positive perception in the people mind.