What is Marketing Mix?

It is a set of marketing tools that the firm uses to pursue its marketing objectives in the target market. It is a set of controllable and interrelated variables (4 Ps) that a company assembles to satisfy a target group better than its competition.
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 It is also termed as Integrated Marketing McCarthy classified these tools into four broad groups, which he called the four Ps of marketing: product, price, place, and promotion.

Components of Marketing Mix

Marketing Mix

Product

Place

Target Market
Product Variety Quality Design Features Brand Name Packaging Sizes Services Warranties Returns Channels Coverage Assortments Locations Inventory Transport

Price List Price Discounts Allowances Payment Period Credit Terms

Promotion Sales Promotion Advertising Sales Force Public Relations Direct Marketing

 Marketing-mix decisions must be made for influencing the trade channels as well as the final consumers.

Function of Each Marketing Mix

Product
To satisfy the needs and wants of the target market.

Placement (or Distribution)

To make the product conveniently available to the target market consistent with their purchasing pattern.

 Promotions
To build and improve consumer demand. Promotions has four components called the Promotions Mix :
Advertising to effectively inform and persuade the target market. Public Relations to offer a positive image of the company and the brand. Selling to get the customers to buy. Sales Promotions to convince customers to buy immediately.
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 Price
To make the product affordable to target market and reflect the value of benefits provided.

 The firm can change its price, sales force size, and advertising expenditures in the short run. It can develop new products and modify its distribution channels only in the long run.

 Thus the firm typically makes fewer periodto-period marketing-mix changes in the short run than the number of marketing-mix decision variables might suggest.

 The four Ps represent the sellers' view of the marketing tools available for influencing buyers.

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 From a buyer's point of view, each marketing tool is designed to deliver a customer benefit. Robert Lauterborn suggested that the sellers' four Ps correspond to the customers' four Cs: Four Ps Four Cs Product Customer solution Price Customer cost Place Convenience Promotion Communication
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 Winning companies will be those that can meet customer needs economically and conveniently and with effective communication.

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 No single element of the marketing mix must be decided on independently of the other elements.

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As an Exmple:
Shakeys primary target market are families. In the late 70s up to the early 80s, another segment composed of beer drinkers who would patronize the pizza parlor late in the evening was steadily growing. Music and bands were thus added to cater the needs of this emerging segment.
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 The image of the new segment, however, dominated and alienated the originally family market which values a wholesome place to eat without the noise and smoke created by beer drinkers.

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 Shakeys then decided to refocus its attention back to its original target market by renovating their stores to attain a brighter and more wholesome look as expected by their customers.

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Illustration of Marketing Mix

TACO BELL Product...Border Lights, a new menu of "light foods" Price.....Value Pricing as with their other menu items Promotion...Various media and methods, a commercial that appeared during the 1995 Superbowl to announce the arrival.
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 Place...Taco Bell has increased its points of access (where you can by its products) by a factor of 4 over the last couple of years...including gas stations etc.

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Exercises
Group the class with 2 members each. Think of two (2) products and two (2) service oriented business, and apply the marketing mix principle.

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Marketing Management Philosophies

The Production Concept
Consumers favor products that are available & highly affordable. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution. (considers economies of scale)

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 This orientation makes sense in developing countries such as China where the largest PC manufacturer, Legend, and domestic appliances giant Haier take advantage of the country's huge inexpensive labor pool to dominate the market.

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 It is also used when a company wants to expand the market.

The key idea focus on efficiency of internal

operations
The firm is focused on what it does best

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 Less concerned on customers needs The management focus on improving production and distribution. Oldest philosophy This type of philosophy is useful in two types of situation

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 1. when the demand for a product exceeds the supply 2. when the products cost is too high and improved productivity is needed to bring it down.

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 The Product Concept

It holds that consumers favor those products that offer the most quality, performance, or innovative features. Managers in these organizations focus on making superior products and improving them over time, assuming that buyers can appraise quality and performance.

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 Product-oriented companies often design their products with little or no customer input, trusting that their engineers can design exceptional products.

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 A General Motors executive said years ago: How can the public know what kind of car they want until they see what is available? GM today asks customers what they value in a car and includes marketing people in the very beginning stages of design.

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 However, the product concept can lead to marketing myopia. Railroad management thought that travellers wanted trains rather than transportation and overlooked the growing competition from airlines, buses, trucks, and automobiles.

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Colleges, department stores, and the post office all assume that they are offering the public the right product and wonder why their sales slip. These organizations too often are looking into a mirror when they should be looking out of the window.

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 The Selling Concept

The consumers will buy products ONLY if the company promotes/ sells the product. It holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products.

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 The organization must, therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers must be coaxed into buying, so the company has a battery of selling and promotion tools to stimulate buying.

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 The selling concept is practiced most aggressively with unsought goodsgoods that buyers normally do not think of buying, such as insurance and funeral plots. The selling concept is also practiced in the nonprofit area by fund-raisers, college admissions offices, and political parties.

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 Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants. In modern industrial economies, productive capacity has been built up to a point where most markets are buyer markets (the buyers are dominant) and sellers have to scramble for customers.

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 Prospects are bombarded with sales messages. As a result, the public often identifies marketing with hard selling and advertising. But marketing based on hard selling carries high risks.

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 It assumes that customers who are coaxed into buying a product will like it; and if they dont, that they wont bad-mouth it or complain to consumer organizations and will forget their disappointment and buy it again. These are indefensible assumptions.

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 In fact, one study showed that dissatisfied customers may bad-mouth the product to 10 or more acquaintances; bad news travels fast, something marketers that use hard selling should bear in mind

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Examples of Selling Driven Companies

Avon Cosmetics Life Insurance

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 The Marketing Concept

It holds that the key to achieving organizational goals consists of the company being more effective than its competitors in creating, delivering, and communicating customer value to its chosen target markets.

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 Theodore Levitt of Harvard drew a perceptive contrast between the selling and marketing concepts: Selling focuses on the needs of the seller; marketing on the needs of the buyer.

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 Selling is preoccupied with the sellers need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it.

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 The marketing concept rests on four pillars: target market, customer needs, integrated marketing, and profitability. The selling concept takes an inside-out perspective. It starts with the factory, focuses on existing products, and calls for heavy selling and promoting to produce profitable sales. The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates activities that affect customers, and produces profits by satisfying customers. 41

 holds that achieving organizational goals (making profit) depends on understanding the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. E.g. Disney, McDonalds, Bosch are customer-driven companies.

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 The Societal Marketing Concept

It holds that the organization should not only satisfy the needs and wants but also improve both customers and societys well-being. This newest philosophy focus on customer long-term welfare, since today we have environmental problems, resource shortages, population growth etc.

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 E.g. Critics against fast-food restaurants that food has a lot of fat and salt harmful for health, a lot of packaging increasing waste and pollution.

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 Here, the companies try to balance (1) company profits, (2) consumer wants, (3) societys interests.

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 Less toxic products More durable products Products with reusable or recyclable materials Marketing that preserves or enhances an individuals and societys long-term best interests

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Assignment:
Think of businesses or companies that adopt the different marketing management philosophies. (three for each philosophy)

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