Unit 4 : Marketing Mix

The marketing mix has been defined as the "set of marketing tools that the firm uses
to pursue its marketing objectives in the target market. These marketing tools are in
control of the marketers .
There are 4 basic marketing tools :
1. Product
2. Place
3. Price
4. Promotion
The product is offered to the customers at a price . This offer may be communicated to
the customers with the help of tools like advertisements , and the offer is made
available to the customers through places like retail shops . Companies like
Hindustan Unilever , Apple Inc. etc. are examplees of firms .
Concept of Marketing Mix
Marketing Mix helps in achieving the marketing objectives set by the firm in the target
market . ( Target market is defined as the market for which the product is focused for .
ex : Johnson & Johnson focuses its baby products at babies and mothers )
Marketing objectives are the goals a firm wants to achieve by marketing activities .
Increase in sales , profit and awareness about a product are some of the examples of
marketing obbjectives .
A marketer can satisfy the needs of his / her customers by offering something in
exchange for money . This offering is called a product , and its made available to the
customers at a price . There are specific places where this offering is made available ,
and marketers spread the information related to the offering through various media
like newspaperer ,TV , internet etc.
Meaning of Marketing Mix
Its blend or compound of all the marketing efforts honoring around the 4 ingredients
namely the 4Ps , Product , Place , Price , Promotion . These ingredients are
interrelated and revolve around potential customer satisfaction as the focal point .
Its the complex of mixes related to inputs and resources utilized in the marketing
program to attach the business objectives such as profit , return on capital employed ,
sales value , sales volume , market share , market growth etc.
Cost of product = Cost of manufacturing + Cost of marketing
What is a strategy ?
and : A strategy is what you're going to do . Marketing strategy is a link between a
product and a market . It provides a much desired direction for allocating all the
resources with the marketing effort .

The marketing strategy is translated into an action plan through the tools of
marketing management . These tools are together called Marketing Mix .
Marketing mix represents the firms market offer
Basically , a marketer carries out his marketing task by making a market offer . The
marketer creates a product that will meet the needs of the consumers .
He fixes a price for the offer that is acceptable to the consumer . He transports the
products to the retailer , so that the product reaches at a convenient place for the
consumer .
He communicates the benefits of the offer to the consumer by carrying out various
promotional activities such as :
1. Personal selling : it involves face to face interaction with the customer , like in
insurance selling
2. Advertising : through advertisements on radio , TV etc.
3. Sales promotion
The 4 elements , Product , Place , Promotion and Price constitute the market offer .
In other words , a market offer is a bundle of benefits the marketer extends to the
consumer . A competing offer from the competitor is another such bundle .
example of marketing mix : Maruti Suzuki , Wagon - Rvxi is available at 4.13 lakhs in
Maruti showrooms - this product is promoted through advertisements in various
media like TV , newspaper , radio etc .
Marketing mix varies from one organization to another according to the available
resources . A company with sound financial resources may spend large amounts on
advertising its brands , launching multiple brands of the same product , and
distributing it all over the country .
On the other hand , a company may also heavily promote the product at dealer
outlets , and may give massive incentives to dealers to push its products .
Components of Marketing Mix
Marketing begins with the identification of consumer needs and wants , and
culminates with successfully fulfilling those needs through the 4 Ps of Marketing .
The concept of 4 Ps of Marketing Mix , Product , Place , Price and Promotion was
introduced by Jerome McCarthy and developed by Philip Kotler .
4 Ps Concept of Marketing
1) Product Mix : it is the most basic marketing mix tool . A product can be a good ,
service , idea or a combination of these . It refers to the goods and services offered by
the organization for sale .

It is the composite of products offered for sale by the firm over a period of time .
A product is purchased because it satisfies one or more needs of the consumer . A
consumer not only pays for the tangible product , but also for the benefit it will
provide .
So , in simple words , a product can be described as a bundle of benefits which the
marketer offers to the consumer at a price .
Classification of Products - Durability and Tangibility
Consumer goods
Industrial goods
Product Mix variables
1. Product line : is a group of closely related products which are capable of satisfying
a class need to be used together to be sold to the same consumers . It stands for
the entire range of products manufactured by a firm .
ex: Godrej has a product line of vanaspati , soaps , detergents , fridges , furniture ,
machine tools , soft drinks etc.
Product range : it speaks of the depth of specialization in terms of varieties based on
consumer pockets and functional requirements .
2. Product design : the market decision starts with designing the product in a way
which is required by the target consumer . Product design is an important factor in
the sale of many products .
It enhances the utility value , attractiveness , ease of operation , safety , appeal to
increase sales volume , reducing manufacturing and marketing costs , reducing
transportation costs etc.
3. Product package : packaging is the general group of activities in designing the
containers or wrappers for the products .
A good package has the pride of place in purchasing because it protects the product ,
provides convenience for the customers and the producers increases economy and
communicates . It provides convenience to both consumers and dealers .
Packages protect the product against deterioration , preserve freshness , flavor ,
fragrance , insure against evaporation loss etc.
Physical changes due to climatic conditions diminish loss from handling and reduces
the amount of shop wise merchandise .
4. Product quality : the quality of a product or service is its ability to satisfy the
consumer and thereby achieving the desired outcome of consuming the product .

Establishment of quality standards is a basic step in merchandising . Product quality

depends on a product design , engineering , choice of materials , manufacturing
process , workmanship and packaging .
3Ms - Men , Money , Materials , P - Processing
5. Product labelling : Labels are fixed to products to identify them and to describe their
ingredients , quality , quantity and other characteristics . A product label may be
either descriptive , informative , grade designating or a combination of these .
6. Product branding : a brand is a symbol , a mark , a name , a communication ,
product image , a quality , a value , a personality which brings about an identity to a
given product .
Products are identified or labelled with trademarks or brands composed of letters ,
numbers , words and designs .
A good brand name is one which is easy to remember , pronounce , describe the
product , or its use suggests product quality , distinctive and complement legal
sanction .
7. After sale services and guarantee : with every increase in the use of machinery ,
equipment , appliances , and gadgets , there is an inherent need of after sale service ,
guarantees and warranties against defect , service repairs , spare parts , maintenance
etc.
Manufacturers of machines , equipment , gadgets , and technical equipment will have
to establish service policy and a plan for servicing their equipments after sale .
Product decisions
1. Product design : Design sells products especially in the technology world
2. Product features : Features increase the products benefits
3. Product quality : must be reflected with the price charged
4. Product branding : should attract customers to your product
5. Product target market : the target market will control marketing from start to finish
6. Product positioning : carefully place your product in the market next to competitors
SWOT analysis is a process that identifies the Strengths, Weaknesses, Opportunities
and Threats of an organization .
2) Place Mix
Place or distribution mix stands for the matching arrangement for the smooth flow of
goods and services from the producers to the consumers .

Its concerned with the creation of place , time , and possession utilities . In other
words , it signifies two things , namely :
1. Physical distribution
2. Channels of distribution
Channels of distribution
A distribution channel is a chain of intermediaries through which a good or service
passes until it reaches the end consumer. It can include wholesalers, retailers,
distributors and even the internet itself.
Every manufacturer or producer is faced with a problem of developing plans and
policies involving the choice of a channel or channels of distribution . These plans and
policies are related with determination of number of distributers , middlemen ,
franchise agreement , stipulating the obligations of manufacturer and intermediaries
and the legal implications involved .
This involves detailed distribution , survey gathering information regarding the
operation of various types of middlemen , their functions , characteristics , policies ,
strengths , weaknesses and the ability to render efficient and economical distribution
service .
These policies are broadly of 3 kinds :
1. Intensive distribution : maximum number of outlets are there
2. Selective distribution : selected outlets are used
3. Exclusive distribution : only 1 outlet is used
Place Mix variables
The basic Place Mix variables are TWID :
1. Transportation : a selection is to be made of the most efficient , economical ,
regular , rapid and dependable mode of transportation of the firms products taking into account rail / roads / motor trucks / trailers / inland waterways /
pipelines / air transport / air shipment / post parcel .
Who all are involved in this process ?
ans : Distribution is achieved by using one or more of the following channels :
Zero Channel , Single Channel , Dual Channel and Multiple Channel .
A zero level channel is a direct marketing channel where there is no intermediary and
the producer sells directly to the consumer. For example direct mails, telemarketing
etc. A one level channel has one intermediary, typically a retailer between a
manufacturer and consumer. Similarly a 2 level channel and a 3 level channel have 2
and 3 intermediaries respectively.
2. Warehousing : it has its own place in the distribution of goods . It creates time
utility by adjusting supply and demand , preserving or conditioning , and obtaining
more favorable demand and market price .

Today , storage involves 4 functions in the distribution of goods , namely , receiving ,

checking , transfer to warehouse , selecting and picking up goods .
3. Inventory levels : merchandising is responsible not only for what to make available
but also , how much to produce .
Merchandising staff along with marketing research staff , determines the volume of
merchandise the manufacturer experts to sell in a given period
say, a month, a quarter, a term or a year.
Sufficient inventory must be on hand of different sizes, colours, models, and varieties
to make immediate shipment upon the receipt of orders, failing which the sales and
advertising efforts go futile, orders cancelled, and customers are lost to competitors
and, hence profit are reduced.
4. Delivery
What are transactional functions ?
ans : Functions that are necessary for the transaction of goods on a regular basis .
ex: buying , selling , risk bearing etc.
Logistical functions perform the flow of goods , information between the point of origin
to the point of consumption
Facilitating functions facilitate both physical exchange and transaction of goods
3) Price Mix
Price Mix is the value of the product decided by the producers . Price Mix includes the
decision as to the price level to be adopted , discount to be offered , and terms of credit
allowed to the customers .
Importance of pricing strategy in marketing
The price of a product is based on the following variables :
1. Pricing policies and strategies 2. Terms of Credit 3. Terms of delivery 4. Margin
5. Resale price maintenance 6. Cost of manufacturing 7. Cost of marketing
8. Channels of distribution 9. Competitors price 10. Methods of distribution
11. Nature of the market
Importance of pricing
1. It should be flexible
2. It contributes to how consumers perceive a product or service
3. A firm wanting to indicate that it offers high quality product would charge a higher
price
4. A firm wanting to position as a low cost provider will charge a lower price

5. Equilibrium ( state of balance ) : if demand of a product increases with less supply ,

it will lead to a higher price
Resale price maintenance is an agreement between a manufacturer and a wholesaler
or retailer not to sell a product below a specified price .
4) Promotion Mix
Its the communication mix which deals with the personal and impersonal persuasive
communications about the product or service of the manufacturer . The most
distinguishable category of communicating to customers is Personal selling and
Impersonal selling .
Promotion Mix variables
1. Personal selling : it plays an important role in communicating between a firm and
its customers . The important questions to be answered to achieve a fair degree of
success are :
1. How important is customer selling and
2. Whats the role of personal selling in Marketing Mix and in management of sales
force
The qualities a salesperson should have is :
He should have a thorough knowledge of the product ( what the product has and what
the product doesn't have ) , salespersons are the brand ambassadors , they are not to
mention the competitor brand or their products .
2. Advertising : its a very popular method of impersonal communication using its wide
variety of media and media vehicles . These media are indoor , outdoor , direct and
display advertising .
In planning and advertisement , decisions must be made on the objectives of the to be
achieved , the audience to be reached , the media selection , advertising
appropriation , coordination in sales force , advertising agency , advertising
effectiveness , its evaluation etc.
3. Sales promotion : its the achievement of short term marketing objectives by
schematic means . Its the function in marketing of providing inducements to buy ,
offer , for a limited period only at the time and place .
Purchasing decision is made , which are supplementary to a products nominal value .
Precisely , which implies special offers .
4. Trade fairs and exhibitions : exhibition is the huge congregation of manufacturers
and dealers under a single roof for displaying , demonstrating , and selling their
products .
On the other hand , a trade fair is a mammoth gathering of prospects arranged by
manufacturers and dealers , where fun , frolic and entertainment are prominent .

5. Public relations : involves the installation and maintenance of mutual

understanding between a firm and all those who a likely to come in contact with
them . These sections in society are customers , stakeholders , admin , staff , and
general public .