The basic principle of marketing mix was developed in 1948 by James Culliton, who proposed identifying marketing decisions based on specific criteria. In 1953, Neil Borden, then President of the American Marketing Association, called this principle as “Marketing Mix”. In 1960, E. Jerome McCarthy developed the elements of Marketing Mix, which all start with the letter “P”. These elements were four at that time so they became known as 4P’s.
Definition of Marketing Mix
It is a set of marketing tools that the company uses to pursue its marketing objectives in the target market. It is known as 4P’s, i.e. abbreviations for four words starting with the letter P.
Marketing Mix is used for making marketing decisions, such as identifying the product and its specifications, fixing its price, determining sales channels, in addition to communication and promotional strategies as well as decisions that the marketer can control so that he can meet the requirements of customers and then penetrate into the market effectively.
Elements of Marketing Mix
Marketing Mix consists of four basic elements starting with the letter P. The 4Ps include:
Any goods or services produced on a large scale and in specific quantities by a company or a factory.
The product means, in its narrow concept, any physical thing, or anything with physical properties, to be sold to the purchaser in the market. However, in its broad concept, and in the context of marketing science, a product includes all tangible or intangible physical things received by an individual through an exchange process, i.e. the product is a package of tangible and intangible properties involving functional, social and psychological benefits.
Planning a product involves several factors including:
Determining the quality of the products (or products) provided to the consumer.
Identifying the shape and size of the product.
Choosing a trade name and a logo of the product that gains the approval of the consumer.
Identifying the services accompanying the provision of the good and warranty policies.
Identifying the data written on product label.
Choosing the shape and color of the product’s package.
Identifying new products, research and development programs.
The actual amount the purchaser pays for a product. It may be defined as the amount the consumer pays to the seller to obtain the product or the service.
The price is fixed after examining a number of variables, such as: the competition, price of raw materials, product identification and pre-estimation of the price by the purchaser.
Also, the price is defined as the amount determined by the seller for the price of its good or service, and is also defined as the art of transferring the value of the good or the service at some time into a monetary value. When a consumer pays the price of a good or a service, he is also paying for services provided in addition to the product such as after-sale service, repair and maintenance. He will also receive a well-known trade name and trademark as well as appropriate payment terms.
Fixing the price of a product is often related to its quality and performance. Setting the price of a product is critical to the company’s profit and survival and has an impact on the other elements of the marketing mix.
For example, a high price has to be justified in terms of quality, services or trade name, and must be supported by intensive advertising campaigns to convince the consumer to choose the product over competitors’ products.
Also, discounts offered to distributors have a direct impact on the willingness and the desire of the distributor to promote and distribute a product over another.
The important decisions the marketing manager shall take in the field of pricing include:
Fixing the base price of the good.
Fixing the discounts granted to distributors.
Fixing the prices of the services and the product warranty.
Identifying the terms of transportation.
Identifying the terms of credit if the company follows this policy.
It means the location where the product is sold. It also includes the methods of distributing and delivering the product to the purchasers, the manner by which the goods and services are delivered to the prospective consumer in the right place and at the right time, the manner which ensures the exchange process between the consumer and the purchaser.
Distribution has a significant role in the marketing mix. Any unique and innovative good sold at an appropriate price means nothing to the consumer, unless it is available in the right place and at the right time. Therefore, we can say that the distribution achieves both the spatial and temporal utility of the good.
The distribution’s decisions are as follows:
Distribution policies in terms of direct or indirect distribution.
Specifying the distribution degree.
Identification of programs that ensure the cooperation and development of relations between intermediaries.
Determining the transportation and storage decisions.
Promotion includes all communication activities with customers through advertising, public relations, sales promotion, direct mail and hidden marketing. Promoting a product impacts all the above-mentioned elements; e.g. the form and size of the product. All promotional expenses must also be included when fixing the product’s price. The location of the promotion is also critical to its success.
There are many important decisions in the field of promotion, as follows:
It includes determining the level of advertising and its importance to the company, the advertising message directed to the customer and the advertising methods used, It also involves identifying the advertising budget and allocating it to the different advertising medium.
It includes the use of certain methods and promotional offers to attract and convince customers, such as offering a percentage discount on the price of a product to attract customers or to make a promotional offer for a specific period, such as to offer another product as a gift when buying a specific product. These methods are used when sales are weak.
It aims at building good relations with the surrounding environment, which includes government authorities, consumers, shareholders, media, etc.
It is a face-to-face interview with the customer, which is flexible but costly. The nature of the good may require using this method.