A marketing mix is composed of 4 basic ingredients generally known as the 4Ps of marketing. All 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 this competitive environment and globalization, then it should keep its basic ingredients diversified and unique. Also, this is a one way of getting a competitive advantage over your competitors.
4Ps of Marketing Mix – Basic Ingredients
The 4Ps of marketing mix start with the product. The product actually specifies the “thing” that you sell to others. It can be in the form of a physical product, service, idea, 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 market and tries to mold his product offerings in order to complete that gap. For example, due to industrialization, families are condensing in their size. Therefore, marketers should extend its product to a 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 in 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 the 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 a 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 plays an important role in the marketing process as customers are always sensitive to the price. Therefore, the price should not be 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 allow them to increase the price automatically.
Price also affects other functions of the business; the production department is suggested to increase the productivity of the product so that the price of the product is reduced.
3. 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 in a place that is convenient for the customers. So, the company develops appropriate distribution channels for the distribution of its product in an efficient manner.
The decision about the distribution channel is very significant for the success of the business. The company can analyze its strengths and the market condition, in order to decide whether it should deliver its products to customers through a chain of distributors, wholesalers & retailers or, 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 it should place its product nationally, regionally, or internationally.
The distribution element of the 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 transportation, logistics, warehousing, etc.
It is the most effective element of the 4Ps of the Marketing mix. Promotion is related to communication with the target customers about the product’s awareness. In simpler words, if a company does not introduce its product in the market, then how its sales can be increased? Therefore, businesses are spending huge amounts in this area of the 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 companies, which are as follows.
It includes special offers, like free samples, rebate offers, coupons, etc that are offered to the people on the purchase of a relative product or service.
It includes ads, magazines, billboards, TV & radio commercials, and also ads for websites, etc. All of these serve as messages that are one way in nature to develop the interest of a particular product or service in the market. Repetition of advertising messages is important to accomplish their goals.
These are non-paid news messages that create a positive image of a product or service in the market. For this purpose, probably companies take part in social and charity work and try to create a positive perception in people’s minds.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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