One of most common phrases in marketing is The Marketing Mix – so what is it?

The Marketing Mix is a mixture of four ingredients (known as the 4 Ps). There is an extended Marketing Mix with 7 Ps but we will just concentrate on the basic 4Ps today.

A business needs to create a successful mixture of

The right PRODUCT
at the right PRICE
in the right PLACE
using the right PROMOTION

Imagine The marketing Mix as the mixture for baking a cake. If you alter the quantities of the ingredients, you add more flour for example the finished result will be different. By altering the Marketing Mix you change how the customer perceives your product and how it fits in to the market place. When working on your products, the price, how you distribute them and how you promote them remember the most important thing – CUSTOMERS. Always think from your customers point of view, maybe it should be 4Ps and 1C

Product
The product has to have the right features for your customers. It has to offer them a benefit they desire and it has to work well and look good. For example if you were selling dishwashers the machine you offered to a busy restaurant that used it constantly, eighteen hours a day, every day of the week and wanted the dishes to be washed as quickly as possible would be different to the machine you offered a small family who used it at home every other day. Your product has to fit the needs of your customers.

There are actually three elements to any product
The Core product – this is the benefit the product offers your customers.
The Actual product – this is the physical product your customers can use.
The Augmented product – this is the non-physical part of the product that adds value (such as a warranty).
If your products look good and do the job they were intended to do you are well on your way.

Price
The Price must be right – are you offering a high volume low value product or a premium product at a premium price? Researching opinions about pricing is important as it indicates how customers value what they are looking for as well as what they want to pay. There are many ways to work out a suitable price:

Premium Pricing
Use a high price where there is uniqueness about the product or service.

Penetration Pricing
The price charged for products and services is set artificially low in order to gain market share.

Economy Pricing
This is a no frills low price. The cost of marketing and manufacture are kept at a minimum.

Price Skimming
Charge a high price because you have a substantial competitive advantage. However, the advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply.

Premium pricing, penetration pricing, economy pricing, and price skimming are the four main pricing policies/strategies.

However there are other important approaches to pricing.
Psychological Pricing. The consumer to respond on an emotional, rather than rational basis.

Product Line Pricing. Where there is a range of product or services.

Optional Product Pricing. Optional 'extras' increase the overall price of the product or service.

Captive Product Pricing. For example an office printer manufacturer will charge a low price for the printer and recoup its margin (and more) from the sale of the ink.

Product Bundle Pricing. Here sellers combine several products in the same package. Think of satellite TV

Promotional Pricing. Such as BOGOF (Buy One Get One Free).

Geographical Pricing. For example rarity value, or where shipping costs increase price.

Value Pricing. Used where external factors such as recession or increased competition force companies to provide 'value' products and services to retain sales

Place
The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation. On average 20% of the cost of a product goes on getting it to the customer, this includes transport, storage and making goods available. The choice of distribution system will depend on your circumstances.

Promotion
Your customers and potential customers need to be made aware of the existence and availability of your products. Promotion helps you spread your costs over a larger output. By successfully promoting your products you sell more which reduces the cost per item.

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