The Marketing Mix

The marketing mix is comprised of four marketing activities; product, price, promotion and place
(distribution)(4Ps). The firm tries to integrate these activities so as to satisfy precisely the needs of
consumers. This necessitates the constant gathering of up-to-date information on the changing nature
of consumers needs and preferences. The essential ingredient for success is the integration of the
four Ps to match the needs of consumers on a continous basis.
Product
Decisions concerning the product element would include; branding, packaging, labelling, warranty and
servicing. Product planning concerns activities in the development of products/services that match the
needs of consumers.
Product planning converts market research data, in the light of technical cost and profit
considerations, into acceptable saleable products. Decisions made in this area are vital as they are
involved directly with creating products that satisfy consumer needs.
Pricing
In the context of pricing, consideration must be made of costs, customers and competitors. Price is
often used as a competitive tool. Consumers view price as a value for money issue. A price for a
product should reflect the cost to make the product at different levels of activity. The price should also
take the demand function into consideration with regard to how much consumers are willing to pay.
Finally the profit objective of the firm must be analysed when setting a price.
Promotion
Promotion aims to bring consumers from unawareness to action. It is also used to maintain interest in
an established product/service. Promotion can be used in a persuasive or an informative fashion. The
main elements of promotion include; advertising, personal selling, sales promotion, publicity and
public relations. It is vital to have a good understanding of ones audience and to integrate the above
elements effectively. A constraining factor for many firms in this sphere would be a limited budget.
Place
Goods to be of value have to be distributed to places where they are wanted, at the right time, in the
right quantities and in the right condition. The choice of distribution channel is vital in implementing
the marketing plan of the firm. The main consideration is to ensure that the product is available at the
time and place of greatest convenience to the customer.
Market Segmentation
Careful selection and accurate identification of target markets are pre-requisites for the development
of an effective marketing mix. Market segmentation is the process by which customers are divided
into homogenous groupings. Once the segment has been identified, a marketing mix can be
developed which will ensure best use of marketing resources. There are two main types of market for
consideration:
(a) Consumer markets consist of buyers/individuals in their households who intend to consume or
benefit from the purchased product and do not buy products for the sake of profit.
(b) Industrial markets are composed of institutions, government agencies, producers or resellers
that purchase a specific type of product for resale, direct use in manufacturing other products or use
in general daily operations.
Two main approaches stand out in target market strategy: the undifferentiated(mass market) and
the market segmentation approach.
The Undifferentiated approach
In adopting this strategy the market is treated as a whole. Management will adopt a single marketing
mix to reach as many consumers as possible. This type of approach tends to be pursued when a
large group of consumers in the total market are perceived to have the same want-satisfying benefits
for a product e.g. sugar, petrol, salt.
The market segmentation approach
This is a customer orientated approach embodying the marketing concept. It is a process by which
customers in markets with some heterogeneity can be grouped into smaller, more similar or
homogenous segments. It takes account of submarkets. One does not develop a marketing mix for
the whole market but rather separate mixes for different segments of the market. The total market is
viewed as being too diverse.
Concentrated and Differentiated Segmentation
These are the two main segmentation strategies. A Concentrated strategy involves pursuing a single
segment of the total market. It is often referred to as a niche strategy. Economies can be derived from
this specialist approach. This narrow focus may also mean leaving ones eggs in one basket.
Dominance of the segment is essential for success. Bailys have been extremely successful in the
adoption of this approach.
A Differentiated strategy involves targeting two or more segments of consumers. It is also known as
a multi-segment strategy. A separate marketing mix would be developed to target each segment.
Kelloggs use this strategy to great effect where they have developed a range of products to cater for
different segments of the cereal market.
Advantages of Market Segmentation
1. Allows for a better understanding of customer needs and wants.
2. More effective use of marketing resources.
3. Better able to understand market demand.
4. More realistic as targeting the whole market could prove difficult.
Bases for Consumer Segmentation
The market may be segmented according to:
(a) Geographic: include climate, terrain, natural resources population density
(b) Demographic: include age, sex, family, religion and race.
(c) Socio-economic: include occupation, income, education and social class.
(d) Psychographic: include motives and lifestyle.
(c) Product Related: include usage and benefit desired.