Marketing mix

The term 'marketing mix' was first used in 1953 when Neil Borden, in his American Marketing Association presidential address, took the recipe idea one step further and coined the term marketing!mi" # A prominent marketer, $# %erome Mc&arth', proposed a ( ) classification in 19*+, which has seen wide use# The four )s concept is e"plained in most marketing te"t,ooks and classes#

Contents

1 -our )s . $"tended marketing mi" 3 -our &s ( -our &s in /&s compass model

Four Ps
$lements of the marketing mi" are often referred to as 'the four )s'0 Product ! A tangi,le o,1ect or an intangi,le ser2ice that is mass produced or manufactured on a large scale with a specific 2olume of units# 3ntangi,le products are often ser2ice ,ased like the tourism industr' 4 the hotel industr' or codes! ,ased products like cellphone load and credits# T'pical e"amples of a mass produced tangi,le o,1ect are the motor car and the disposa,le ra5or# A less o,2ious ,ut u,i6uitous mass produced ser2ice is a computer operating s'stem# Price 7 The price is the amount a customer pa's for the product# 3t is determined ,' a num,er of factors including market share, competition, material costs, product identit' and the customer's percei2ed 2alue of the product# The ,usiness ma' increase or decrease the price of product if other stores ha2e the same product# Place 7 )lace represents the location where a product can ,e purchased# 3t is often referred to as the distri,ution channel# 3t can include an' ph'sical store as well as 2irtual stores on the 3nternet# Promotion represents all of the communications that a marketer ma' use in the marketplace# )romotion has four distinct elements ! ad2ertising, pu,lic relations, word of mouth and point of sale# A certain amount of crosso2er occurs when promotion uses the four principal elements together, which is common in film promotion# Ad2ertising co2ers an' communication that is paid for, from cinema commercials, radio and 3nternet ad2erts through print media and ,ill,oards# )u,lic relations are where the communication is not directl' paid for and includes press releases, sponsorship deals, e"hi,itions, conferences, seminars or trade fairs and e2ents# 8ord of mouth is an' apparentl' informal communication a,out the product ,' ordinar' indi2iduals, satisfied customers or people specificall' engaged to create word of mouth momentum# 9ales staff often pla's an important role in word of mouth and )u,lic :elations# PRODUCT PRICE Product Variation Cost Recover! Pricing Product Penetration Pricing Differentiation Mr# ;ma 9ankar Mishra, Asso# )rofessor, 3B&9, 9 <=> A ;ni2ersit', Bhu,aneswar Product Innovation Price "kimming Product E imination

Marketing Mix

P$%CE Distri&ution C'anne Direct "a es Indirect "a es E(Commerce

PROMOTIO) Individua Communication Mass Communication *rand Management Cor+orate Identit!

?Fig# The ( Main -ields of Marketing Mi"@ )ackaging also needs to ,e taken into consideration# Broadl' defined, optimi5ing the marketing mi" is the primar' responsi,ilit' of marketing# B' offering the product with the right com,ination of the four )s marketers can impro2e their results and marketing effecti2eness# Making small changes in the marketing mi" is t'picall' considered to ,e a tactical change# )arm Bains sa's Making large changes in an' of the four )s can ,e considered strategic# -or e"ample, a large change in the price, sa' from A19#++ to A39#++ would ,e considered a strategic change in the position of the product# Bowe2er a change of A13+ to A1.9#99 would ,e considered a tactical change, potentiall' related to a promotional offer# The term 'marketing mi"' howe2er, does not impl' that the () elements represent options# The' are not trade!offs ,ut are fundamental marketing issues that alwa's need to ,e addressed# The' are the fundamental actions that marketing re6uires whether determined e"plicitl' or ,' default#

Extended marketing mix

There ha2e ,een attempts to de2elop an 'e"tended marketing mi"' to ,etter accommodate specific aspects of marketing#

Mr# ;ma 9ankar Mishra, Asso# )rofessor, 3B&9, 9 <=> A ;ni2ersit', Bhu,aneswar

-or e"ample, in the 19/+s, )icke s and ,o son suggested the inclusion of +ackaging# 3n the 19C+s -ot er proposed +u& ic o+inion and +o itica +o.er and *ooms and *itner included three additional ')s' to accommodate trends towards a ser2ice or knowledge ,ased econom'0

People 7 all people who directl' or indirectl' influence the percei2ed 2alue of the product or ser2ice, including knowledge workers, emplo'ees, management and consumers# Process 7 procedures, mechanisms and flow of acti2ities which lead to an e"change of 2alue# Physical evidence 7 the direct sensor' e"perience of a product or ser2ice that allows a customer to measure whether he or she has recei2ed 2alue# $"amples might include the wa' a customer is treated ,' a staff mem,er, or the length of time a customer has to wait, or a co2er letter from an insurance compan', or the en2ironment in which a product or ser2ice is deli2ered#

Four Cs
The -our )s is also ,eing replaced ,' the -our &s model, consisting of consumer, cost, con2enience, and communication# The -our &s model is more consumer!oriented and fits ,etter in the mo2ement from mass marketing to niche marketing# The product part of the -our )s model is replaced ,' consumer or consumer models, shifting the focus to satisf'ing the consumer# Another & replacement for )roduct is &apa,ilit'# B' defining offerings as indi2idual capa,ilities that when com,ined and focused to a specific industr', creates a custom solution rather than pigeon!holing a customer into a product# )ricing is replaced ,' cost, reflecting the realit' of the total cost of ownership# Man' factors affect cost, including ,ut not limited to the customers cost to change or implement the new product or ser2ice and the customers cost for not selecting a competitors capa,ilit'# )lacement is replaced ,' the con2enience function# 8ith the rise of internet and h',rid models of purchasing, place is no longer rele2ant# &on2enience takes into account the ease to ,u' a product, find a product, find information a,out a product, and se2eral other considerations# -inall', the promotions feature is replaced ,' communication# &ommunications represents a ,roader focus than simpl' promotions# &ommunications can include ad2ertising, pu,lic relations, personal selling, 2iral ad2ertising, and an' form of communication ,etween the firm and the consumer#

Four Cs in 7Cs compass model

A formal approach to this customer!focused marketing mi" is known as (&?&ommodit', &ost, &hannel, &ommunication@ in /&s compass model# This s'stem is ,asicall' the four )s renamed and reworded to pro2ide a customer focus# The four &s Model pro2ides a demandDcustomer centric 2ersion alternati2e to the well!known four )s suppl' side model ?product, price, place, promotion@ of marketing management#
o

)roductE &ommodit'

Mr# ;ma 9ankar Mishra, Asso# )rofessor, 3B&9, 9 <=> A ;ni2ersit', Bhu,aneswar

o o o

)rice E &ost )lace E &hannel )romotionE &ommunication

The four elements of the /&s compass model are0

1#&ommodit'0 the product for the consumers or citi5ens# .#&ost0 total marketing cost# 3#&hannel0 marketing channels# (#&ommunication0 not promotion, marketing communication#

/&s &ompass Model is in a customer oriented marketing mi"# -ramework of /&s compass model

/&s0?&1@&orporation ?and &ompetitor@, ?&.@&ommodit', ?&3@&ost, ?&(@&ommunication, ?&5@&hannel, ?&*@&onsumer, ?&/@&ircumstances &ompass0 o to &onsumer0 N F Needs, 8 F 8ants, 9 F 9ecurit', $ F $ducation o &ircumstances0 N F National and 3nternational, 8F8eather, 9 F 9ocial and &ultural, $ F $conomic

?&1@ &orporation? and competitor@ is the core of (&s# 1@ 3t is necessar' to place more emphases on the organi5ation of the companiesG .@ 3t is necessar' to e"ecute marketing plans in con1unction with the compan''s o,1ecti2esG 3@ 3t is necessar' to tackle the internal communication related pro,lems like corporate communication or corporate identit' s'stem?&39@, etc# 3n the market, there are the companies of the same ,usiness, the competitors# But at the time of economics downturn, companies or corporations produce the con2enient ?&.@HcommoditiesI for the consumers or citi5ens with the consideration of the total marketing?&3@ HcostI, and first of all gain their consents through the sufficient ?&5@HcommunicationsI and then their confidences ,' selecting the effecti2e?&(@ HchannelsI in con1unction with the uncontrolla,le e"ternal circumstances# This is the wa' to sur2i2e in the period of low growth economics# ?&*@ &onsumer &onsumers are those people encircling the companies# 3nstead of 1ust the customers of () marketing model, the' are the ordinar' citi5ens nurtured ,' the motto of the consumerism# Bowe2er of course the' are also including the customers and the potential customers#

four directions marked on the compass0 the factors related to the consumer can ,e e"plained ,' the first characters of four directions marked on the &ompass# ?N,8,9,$@ N F Needs0 companies can offer more alternati2es to meet the 2arious needs of the consumers#

Mr# ;ma 9ankar Mishra, Asso# )rofessor, 3B&9, 9 <=> A ;ni2ersit', Bhu,aneswar

8 F 8ants0 the su,stantiated needs to e"pect the accordingl' commodities# 9 F 9ecurit'0 the safet' of the commodities, the safet' of the production process and the ade6uate after!sell warrant'# $ F $ducation0 consumer right to know the information of the commodities#

?&/@&ircumstances Besides the customers, there are also 2arious uncontrolla,le e"ternal en2ironmental factors encircling the companies# The same as the factors of the consumers, the' can also ,e e"plained the first character of the four directions marked on the compass# ?N,8,9,$@

NF National and 3nternational &ircumstances

The National &ircumstances are related to politic and law# 3nternational en2ironment now also ,ecomes important#

8F8eather

-or most of the natural disasters, the companies can do little ,ut tr' to predict when the' will happen and ad1ust the marketing plans#

9F9ocial and &ultural &ircumstances

8hen e"ploring a new o2ersea market, it is essential to stud' the social circumstances of that nation#

$F$conomic &ircumstances0 economics climate is changing due to man' other uncontrolla,le factors like energ', resources, international income and e"pense, financial circumstances and economic growth etc safi#

Mr# ;ma 9ankar Mishra, Asso# )rofessor, 3B&9, 9 <=> A ;ni2ersit', Bhu,aneswar