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Marketing Mix
• 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-mix".
• A prominent marketer, E. Jerome McCarthy, proposed a 4 P’s classification in 1960, which has seen wide use.
What is Marketing Mix?
Marketing Mix = 4 P’s Marketing • Product • Price • Place • Promotion
What is Marketing Mix?
Value perceived in the mind of the consumer
Cover location, distribution, channels and logistics
Marketing communications Collection of features and
benefits that provide customer satisfaction
The 4P’s
• Product - Customer /Consumer • Price - Customer cost • Place - Convenience • Promotion - Communication
4P’s & 4C’s
All marke)ng decision-‐making can be classified into four strategy elements, some)mes referred to as the marke)ng mix or the 4P’s • Product: What are the benefits of this product and service to its customers?
• Price: Should a price be charged to cover costs only? Should the price allow for a profit?
• Place: What can be done to make this product and service more accessible and available?
• Promo/on: What can be done to increase the visibility of this product and service? What can be done to increase its usage or exposure?
The 4P’s
Product is the actually offering by the company to its targeted customers which also includes value added stuff. Product may be tangible (goods) or intangible (services). For many a product is simply the tangible, physical en)ty that they may be buying or selling. While formula)ng the marke)ng strategy, product decisions include: ¢ What to offer? ¢ Brand name ¢ Packaging ¢ Quality
Products
¢ Appearance ¢ Func)onality ¢ Accessories ¢ Installa)on ¢ AMer sale services ¢ Warranty
Price includes the pricing strategy of the company for its products. How much customer should pay for a product? Pricing strategy is not only related to the profit margins but also helps in finding target customers. Pricing decision also influence the choice of marke)ng channels. Price decisions include: • Pricing Strategy (Penetra)on, Skim, etc) • List Price • Payment period • Discounts • Financing • Credit terms
Price
u Using price as a weapon for rivals is as old as mankind, but it’s risky too. Consumers are oMen sensi)ve for price, discounts and addi)onal offers. Another aspect of pricing is that expensive products are considered of good quality.
It not only includes the place where the product is placed, all those ac)vi)es performed by the company to ensure the availability of the product tot he targeted customers. Availability of the product at the right place, at the right )me and in the right quan)ty is crucial in placement decisions. Placement decisions include: • Placement • Distribu)on channels • Logis)cs • Inventory • Order processing • Market coverage • selec)on of channel members
Place (Placement)
v There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marke)ng (from manufacturer to user without an intermediary), and many others.
• Place decisions relate to distribu/on, how the library plans to make products and services available and accessible to customers. Place adds value by making services available at convenient )mes and loca)ons; by crea)ng a pleasant environment in terms of loca)on size, ligh)ng, staff; by allowing for mul)ple types of distribu)on: Electronic, mail or walk-‐in. Place and distribu)on are ways to differen)ate your services, making them more responsive to your customersʼ’ needs.
• With the arrival of newer telecommunica/ons and electronic delivery mechanisms, library channels of distribu/on must be looked at very closely.
Place
Promo/on includes all communica)on and selling ac)vi)es to pursuade future prospects to buy the product. Promo)on decisions include: • Adver)sing • Media Types • Message • Budgets • Sales promo)on • Personal selling • Public rela)ons/publicity • Direct marke)ng • Sponsorship
Promotion
q The elements of the promo)ons mix are integrated to form a coherent campaign. As with all forms of communica)on.
q As these costs are huge as compared to product price, So it’s good to perform a break-‐even analysis before alloca)ng the budget. It helps in determining whether the new customers are worth of promo)on cost or not.
• Marke/ng mix (4 Pʼ’s) was more useful in early 19ʼ’s when produc)on concept was in and physical products were in larger propor)on. Today, with latest marke/ng concepts, marke)ng environment has become more integrated.
• So, in order to extend the usefulness of marke)ng mix, some authors introduced a fiMh Pʼ’s and then seven Pʼ’s (People, Packaging, Process).
• But the founda)on of Marke/ng Mix s)ll stands on the basic 4Pʼ’s.
Extended Marketing Mix – 7P’s
Extended Marketing Mix
The 7 P’s The 7 C’s
Organisa/on Facing Customer Facing
Product = Customer/ Consumer
Price = Cost
Place = Convenience
Promo)on = Communica)on
People = Caring
Processes = Co-‐ordinated
Physical Evidence = Confirma)on
Extended Marketing Mix
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