4. What is Marketing Mix? What are its contents?

Introduction
A marketing mix includes multiple areas of focus as part of a comprehensive
marketing plan. The term often refers to a common classification that began as
the four Ps: product, price, placement, and promotion. Effective marketing
touches on a broad range of areas as opposed to fixating on one message.
Marketing [marketer] identifies consumers’ needs and supplies various goods and
services to satisfy those needs most effectively.
So the marketing manager concentrates on four major decision areas while planning
the marketing activities, namely, (i) products, (ii) price, (iii) place (distribution) and (iv)
promotion. These 4 ‘P’s are called as elements of marketing and together they constitute
the marketing mix. All these are inter-related because a decision in one area affects
decisions in other areas. In this lesson you will learn about the basic aspects relating to
these 4‘P’s viz., product, price, place and promotion.

Concept of Marketing Mix

Marketing involves a number of activities. To begin with, an organisation may decide on
its target group of customers to be served. Once the target group is decided, the product is
to be placed in the market by providing the appropriate product, price, distribution and
promotional efforts. These are to be combined or mixed in an appropriate proportion so as
to achieve the marketing goal. Such mix of product, price, distribution and promotional
efforts is known as ‘Marketing Mix’. The term ‘Marketing Mix’ has been popularized by
E. Jerome MaCarthy.

Definition
According to Philip Kotler, “Marketing Mix is the set of controllable variables that the
firm can use to influence the buyer’s response.”

R.S. Dawer, “Group of various policies used by producer to succeed in market can be
said as marketing mix.”

The controllable variables in this context refer to the 4 ‘P’s [product, price, place
(distribution) and promotion]. Each firm strives to build up such a composition of 4‘P’s,
which can create highest level of consumer satisfaction and at the same time meet its
organisational objectives. Thus, this mix is assembled keeping in mind the needs of target
customers, and it varies from one organisation to another depending upon its available
resources and marketing objectives.

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Components of Marketing Mix
At first Prof. Neil H. Borden of Harvard Business School had named ‘Marketing Mix.’
However, Prof. Jerome McCarthy of Michigan State University presented marketing mix
as four P’s in his book Basic Marketing published in 1960. According to him, the
components of marketing mix or four ‘P’s are as follows:
1. Product: Product is the most important component of marketing mix. Product means
goods, materials, services and even ideas. In marketing, the word ‘product’ does not
indicate only physical goods or materials. It also indicates quality, price, brand,
colour, packaging, seller’s service, goodwill, reputation, guarantee and warranty of
goods with which the customers can get satisfaction. So, product mix is the important
component. It includes:
Product planning, development, standardization, grading, branding, packaging, etc.

Product planning Packaging: Presenting goods in a wrapper, covering,

Product range in an attractive way (generally done by factory
Quality of product owners as a final process
Brand name
Packaging and Labeling Packing: Basic protection of goods, like damage,
After Sale Service leakage etc., meant for transport.
Warranty
Product refers to the goods and services offered by the organisation. A pair of shoes, a
plate of dahi-vada, a lipstick, all are products. All these are purchased because they
satisfy one or more of our needs. We are paying not for the tangible product but for
the benefit it will provide. So, in simple words, product can be described as a bundle
of benefits which a marketer offers to the consumer for a price. While buying a pair of
shoes, we are actually buying comfort for our feet, while buying a lipstick we are
actually paying for beauty because lipstick is likely to make us look good. Product
can also take the form of a service like an air travel, telecommunication, etc. Thus, the
term product refers to goods and services offered by the organisation for sale.

2. Price: Price is a very sensitive component of marketing mix. In it, decision on selling
price, discount, commission etc. are taken.

Price to be charged discount and allowances terms of credit

Price is the amount charged for a product or service. It is the second most important
element in the marketing mix. Fixing the price of the product is a tricky job. Many
factors like demand for a product, cost involved, consumer’s ability to pay, prices
charged by competitors for similar products, government restrictions etc. have to be
kept in mind while fixing the price. In fact, pricing is a very crucial decision area as it
has its effect on demand for the product and also on the profitability of the firm.

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3. Place: Another important component of marketing mix is place mix. This is also
called distribution mix. This includes two components: selection of distribution
channel and physical distribution of products.

Channel of distribution distribution policy transportation warehousing

(a) Selection of Distribution Channel: The means or medium used to carry products
to the ultimate consumers is called distribution channel. The business firm, which
can select proper channel to deliver goods to the customers at right place at right
time, can get success. The selection of distribution channel is affected by the
nature of product, distribution cost, financial position of the firm, market
situation, market competition, etc.
(b) Physical Distribution: Physical distribution works for carrying finished products
to the consumers and supplying necessary raw materials to the manufacturing
company. Physical distribution helps to supply products in right quantity to right
place at right time at lower cost. Under this include the activities such as
management of necessary means of transportation, warehouse for storing,
inventory control, material handling, order processing, place analysis etc. Among
them, management of transportation and warehouse are the most important.
These create place utility and time utility of products.

Goods are produced to be sold to the consumers. They must be made available to the
consumers at a place where they can conveniently make purchase. Woollens are
manufactured on a large scale in Ludhiana and you purchase them at a store from the
nearby market in your town. So, it is necessary that the product is available at shops in
your town. This involves a chain of individuals and institutions like distributors,
wholesalers and retailers who constitute firm’s distribution network (also called a
channel of distribution). The organisation has to decide whether to sell directly to the
retailer or through the distributors/wholesaler etc. It can even plan to sell it directly to
consumers. The choice is guided by a host of factors about which you will learn later
in this chapter.

4. Promotion: Promotion mix includes the activities such as personal selling,

advertising, sales promotion, publicity and public relations etc. promotional activity
becomes very important in attracting customers towards the products and creating
demands by giving information and message about the products. Today’s tough
competition and complex market situation have made promotional activities more
challenging. Success can be achieved in business only through proper promotional
policy and proper use of means and resources. So, a good business entrepreneur

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should make proper promotional policy and implement.(Promotion means giving
information)

Advertising Personal Selling Sales Promotion Publicity

If the product is manufactured keeping the consumer needs in mind, is rightly priced
and made available at outlets convenient to them but the consumer is not made aware
about its price, features, availability etc., its marketing effort may not be successful.
Therefore, promotion is an important ingredient of marketing mix as it refers to a
process of informing, persuading and influencing a consumer to make choice of the
product to be bought. Promotion is done through means of personal selling,
advertising, publicity and sales promotion. It is done mainly with a view to provide
information to prospective consumers about the availability, characteristics and uses
of a product. It arouses potential consumer’s interest in the product, compare it with
competitors’ product and make his choice. The proliferation of print and electronic
media has immensely helped the process of promotion.

Marketing Mix: A bird’s eye view

Price

Target
Product Customer Promotion

Place
(Distribution)