recipe or adapts a recipe to the ingredients immediately available, and sometimes experiments

with or invents ingredients no one else has tried.

Definitions of Marketing Mix

According to Philip Kotler, “ Marketing mix is the combination of four elements called the 4P’s-
Product, Price, Promotion and Place that every company has the option of adding, subtracting or
modifying in order to create a desired marketing strategy”.

According to Kotler and Armstrong, “Marketing mix is the set of tactical marketing tools that the
firm blends to produce the response it wants in the target market”.

According to W. J. Stanton, “Marketing mix is the term used to describe the combination of the
four inputs which constitute the core of a company’s marketing system: the product, the price
structure, the promotional activities and the distribution system”

CHARACTERISTICS OF MARKETING MIX:

1. Marketing mix is the core of marketing process:

Marketing mix involves important decisions relating to each element of the mix. The impact of
the mix is best when proper weightage is allotted to each element and they are combined for
attaining best results.

2. Marketing mix has to be reviewed constantly in order to meet the changing

requirements:
The marketing manager has to constantly review the mix and the market scenario and make
necessary changes in the marketing mix according to changes in the conditions and complexity
of the market.

3. Changes in external environment facilitate alterations in the mix:

Changes keep on taking place in the external environment. For many industries, the customer is
the most fluctuating variable of environment. Customers’ tastes and preferences change very
fast. Brand loyalty and purchasing power also change over a period. The marketing manager has
to carry out market analysis constantly to make necessary changes in the marketing mix.

4. Changes taking place within the firm also necessitate changes in marketing mix:
Changes within the firm may take place due to technology or product line or in the size and scale
of operation. All such changes call for corresponding changes in the marketing mix.

5. Applicable to business and non-business organization:

Marketing mix is applicable not only to business organizations but also to non-business
organizations, such as clubs and educational institutions. For example, an educational institution
is expected to provide the right course (product), charge the right fee (price), promote the
institution and the courses, and provide the course at the right place.

6. Helps to achieve organizational goals:

An application of an appropriate marketing mix helps to achieve organizational goals like
increased profits and market share.

7. Concentrates on customers:
A clear focus point of marketing mix is the customer, and the marketing mix is expected to
provide maximum customer satisfaction

FEATURES OF MARKETING MIX

1. Interdependent variables

The marketing mix is made up of four unique variables product, price, place and promotion.
These four variables are interdependent and need to be aligned.
 2. Help Achieve Marketing Targets

The company aims to achieve its marketing targets such as sales, profits, customer retention and
satisfaction through the use of these variables.

3. Flexible Concept

The marketing mix is a dynamic concept and the focus on any one variable may be either
increased or decreased on the basis of existing marketing conditions and customer requirements.

4. Constant Monitoring

It is necessary to keep continuous watch on the changing trends and requirements, within the
company as well as in the market to ensure that the marketing mix elements stay relevant and
useful.

5. Customer as a focal point

The customer is the focal point of all marketing activity. The value of the product is determined
by customer perception and the goal is to achieve a satisfied and loyal customer.

DEVELOPING A MARKETING MIX

Intuition and creative thinking are key requirements for a marketing manager. But relying only
on these qualities is incorrect and can lead to inaccurate assumptions that may not provide the
desired results. To ensure that marketing mix is based on research and combines facts with
innovation, a manager should go through the following process:

Step 1

The first step on the marketing manager’s list is to define the unique feature, the product offers,
the customer surveys or focus groups and identify the importance of unique feature to consumers
and whether they can increase the sales of the product.
Step 2

The second step is to understand the consumer that would purchase the product, what they need,
what value they associate. All the other elements of the marketing mix will be designed in
accordance with the customer. This understanding will enable the product offered be relevant
and targeted.

Step 3

The next step is to understand the competition. The prices and related benefits such as discounts,
warranties and special offers need to be assessed. An understanding of the subjective value of the
product and a comparison with its actual manufacturing distribution cost will help set an ideal
price point.

Step 4

At this point the marketing manager needs to evaluate the options of place to understand where
the customer is most likely to make a purchase and the costs associated with using this channel.
Multiple channels may help target a wider customer base and ensure easy access. A product
which serves a niche market would concentrate distribution to a specific area or channel; hence
value of the product is closely related with availability of the product.

Step 5

Based on the target audience and the price identified the communication strategy can be
developed. The promotional methods need to appeal to the customers and ensure that the key
features and benefits of the product are clearly communicated and understood.

Step 6

A last step needs to be taken at this point to see how all the elements identified and planned
relate to each other. All marketing mix variables are interdependent and rely on each other for a
strong strategy. It has to be seen whether the selling channels strengthen the perceived value of
the product or the promotional material supports the selected distribution channels.
The marketing plan is finalized after ensuring that all four elements are in harmony and there are
no conflicting messages, either direct indirect.

IMPORTANCE OF MARKETING MIX

Marketing Approach

It contributes towards the formation of an effective marketing strategy and its practical
implementation. Integrates the essentials of effective marketing, marketing and allows to analyse
and asses the feasibility and role of the product or service that the organization offers. Identifies
appropriate distribution channel for the proper placement of the product, sets a suitable price for
the value that is offered to the consumers and identifies and employs suitable promotional media.
It provides the organization with an all-inclusive and holistic marketing approach and gives
direction.

Value Creation

Marketing mix guides in identifying and assessing the diverse aspects of the products or services
in relation to their importance and utility to customers and their preferences. Furthermore, it also
provides direction for the selection of a suitable distribution channel, where the target consumer
is more likely to look around for offered services or products. The platform may range from
being a retail store to an online shop.

Marketing mix also includes directives for the allocation of a suitable price, which confers with
priorities and limitations of the target consumers. It helps to promote and advertise the products
and services effectively, so as to effectively deliver value to consumers.

Activity 1
Identify of 5 products to depict the concept of marketing mix by listing their products and
prices.
Session II: Marketing mix components – Service Sector and Consumer Goods

Learning Outcome Knowledge Performance Teaching & Training

Evaluation Evaluation Method
5. Types of 1. Identify the various 1. Identify Interactive Lecture:
Marketing mix types of marketing marketing mix of Discussing the
mix. products/services marketing mix
components of service
and consumer goods

6. Marketing mix 2. Marketing mix for 2. Specify 4P’s for Activity: Prepare a list
for Consumer goods consumer goods- 4P’s consumer goods of 4P’s and 7P’s of
and 4 C’s models prominent organizations

7. Marketing mix 3.Marketing Mix for 3. List the 7P,s for

for Services Services 7P,s services

TYPES OF MARKETING MIX

The Marketing Mix is a tool used by marketing professionals. It is often crucial when
determining product or brand's offering, and it is also called as 4P's (Product, Price, Promotion,
and Place) of marketing. However, in case of services the 4 P's have been expanded to 7P's or
8P's.
In recent times by giving more importance to customer a new concept has been introduced,
i.e. Concept of 4C's. The Concept of 4C's is more customer-driven with a replacement of 4P's.
According to Lauterborn's the 4C's are - Consumer, Cost, Communication, and Convenience.
According to Shimizu's the 4C's are -Commodity, Cost, Communication, and Channel

Marketing mix is mainly of two types.

1) Product marketing mix – It comprises of Product, price, place and promotions and is mainly
used in case of tangible goods.

2) Service marketing mix – The service marketing mix has three more variables included which
are people, physical evidence and process.

.4P'S - PRODUCER-ORIENTED MODEL OF MARKETING MIX

Product - A product is an item that is built or produced to satisfy the needs of a certain group of
people. Product can be tangible good or intangible service. It is defined as anything that can be
offered to a market to satisfy a want. It not only includes physical objects and services but also
the supporting services like packaging, installation, after sales services etc.

They can be categorized on the basis of

 1. Usage
(a) Consumer Goods: They are meant for personal consumption by the households or the final
consumers like soaps, biscuits or books
(b) Industrial Goods: They are meant for consumption or use as inputs in production of other
products or provision of some service for example nuts and bolts, machinery etc

2. Durability

(a) Durable goods: Durable goods are products which are used for a long period i.e., for months
or years together like mobile handsets, pressure cookers etc

(b) Non-durable goods: Non-durable goods are products that are normally consumed in one go
or last for a few uses.

3. Tangibility:

(a) Tangible goods: They have a physical form and can be touched and seen.

(b) Intangible goods: Intangible goods refer to services provided to the individual consumers or
to the organisational buyers

One must have the right type of product that is in demand for the market. Hence during product
development phase, a marketer must undertake an extensive research on the life cycle of the
product that they are creating.

Every product has a life cycle that includes the growth phase, the maturity phase, and the sales
decline phase. It is important for marketers to constantly reinvent their products to increase
demand once it reaches the sales decline phase.Marketers must therefore, create the right product
mix.

Ariel a high quality product popularized as a detergent that has enzymes for the removal of stain
without hampering the clothes. Ariel has been able to meet this demand of the industry by
introducing new and excellent products in the market at regular intervals. The company has also
re launched their own products with various innovations in order to keep pace with the changing
times. With its unique ingredients, Ariel assures its consumers of impeccable cleaning of
clothes. The various products of this brand are:
 Ariel 3 in 1 Pods to work together in three capacities for lifting stains, cleaning and
brightening the garments.
 Ariel Washing Liquid for doing the laundry and pre-treating the stains in one wash.
 Ariel Excel Washing Gel for excellent cleaning at low temperatures.
 Ariel washing powder for whites as well as coloured clothes and for direct cleaning in the
washing machine.
 Ariel Washing Tablets for convenient and easy washing of garments.
 Ariel Super Soaker.
 Activity 2
Prepare a list of 5 products in each of the of the categories on the basis of (i) Usage, (ii)
Durability (iii) Tangibility.

Price - The price of the product is basically the amount that a customer pays for consuming it.
Price is a very important component of the marketing mix definition. It is crucial in determining
the organization’s profit and survival. Changes in price affect the demand and sales of the
product.

Pricing helps to shape the perception of a product in consumer’s eyes as a low price is associated
with inferior goods. While too high prices might make them value their money over the product.
Hence, examining competitor’s pricing while deciding prices becomes important. A new
company which has not made a name for itself yet, is unlikely to have a target market which is
willing to pay a high price. They might be able to charge higher prices once the product is
acceptable in the markets.

When setting the product price, marketers should consider the perceived value that the product
offers. Major pricing strategies followed are:

 Market Penetration Pricing: The objective of penetration price strategy is to gain a

foothold in a highly competitive market. The firm prices its product lower than the others
in competition to achieve an early breakeven point and to maximise profits in a shorter
time span or seek profits from a niche.
 Market Skimming Pricing: Most commonly used strategy and refers to a firm’s desire to
skim the market by selling at a premium price.
 Differential Pricing: It involves in a firm differentiate its price across different market
segments.
 Geographic Pricing: It seeks to exploit economies of scale by pricing the product below
the competitor’s in one market and adopting a penetration strategy in another.
  Product Line: These are a set of strategies which a multi-product forms usually adopt.

Sunfeast biscuits from ITC uses varied pricing policies. Some of the products are premium
products while the other products are the regular ones. Hence it has been decided to keep the
pricing policy variable as well as competitive. Discounts and other sales promotion schemes
on high priced items like Sunfeast dark fantasy bring the prices down. Cost plus pricing is
used for products like Sunfeast glucose and various other biscuits.

Promotion - Promotion represents the different methods of communication that are used by
marketer to inform target audience about the product. It is an essential component of marketing
as it can boost brand recognition and sales. Promotion is comprised of various elements like:

 Advertising
 Sales Promotion
 Personal Selling
  Public Relations

 Advertising typically covers communication methods that are paid for like television
advertisements, radio commercials, print media, and internet advertisements. In
contemporary times, there seems to be a shift in focus from offline to the online world.
 Sales Promotion comprises of tools used to promote sales in a given territory and time.
They are short term in nature and aim at stimulating quick sales. Advertising aims at
creating awareness and also provides a rationale to buy a product; sales promotion
induces him/her to buy the products. They include discount coupons, price offs, prizes,
lucky draws, free trials etc.
 Personal Selling is a direct display of the product to the consumers or prospective buyers.
It refers to the use of salespersons to persuade the buyers to act favourably and buy the
product.
 Public relations, on the other hand, are communications that are typically not paid for.
This includes press releases, exhibitions, sponsorship deals, seminars, conferences, and
events.
 Word of mouth is an informal communication about the benefits of the product by
satisfied customers and ordinary individuals. Word of mouth can also circulate on the
internet. When effectively used it has the potential to be one of the most valuable assets
we have in boosting the profits online. An extremely good example of this is online social
media and managing a firm’s online social media presence.

In the year 2003, ITC stepped in the manufacturing of biscuits and introduced the ‘Sunfeast’
range that at first dealt with biscuits and later on with other food items also. In order to make its
brand a household name it has launched exciting and innovative campaigns that denote the
various qualities of its products like the flavour and exclusive taste. To promote its range of food
products, famous actors and sports personalities were signed. Sachin Tendulkar, the cricket icon,
Shahrukh Khan, the superstar, SaniaMirza, the tennis star have all been the brand ambassador’s
at one time or other. Television, magazines, newspapers have proved to be an effective and
influential medium for advertisements as they are able to spread awareness among every age
group of people. The slogan ‘Spread the Smile’ has become the essence of the brand and the
catchy and colourful advertisements have helped the company in acquiring a large share of the
market.

Knowledge Assessment 2
Which element of the promotion mix is being referred to in the following statements?

(a) A short term incentive to encourage trial or purchase of a new product.

(b) It does not cost money but may involve huge amount of time and effort by the marketeer

(c) It is an informal communication about the benefits of the product by satisfied customers and
ordinary individuals

(d) The tools include Press Conference, publications and news.

(e) It is a paid form of non-personal communication by an identified sponsor.

(f) It is done through popular audio visual and print media

(g) A direct display of the product to the consumers or prospective buyers.

Answers: (a) Sales Promotion (b) Public Relations (c) Word of Mouth (d) Public Relations (e)
Advertising (f) Advertising (g) Personal Selling

Place - Place or distribution refers to making the product available for customers
at convenient and accessible places. We have to position and distribute the product in a place that
is accessible to potential buyers.This comes with a complete knowledge of the target market.
Understanding them inside out will help discover the most efficient positioning and also increase
the market share. Reaching out to the market can be through planning distribution structure and
logistics. The distribution structure refers to the channel design and structure, and management
of channels while logistics refers to the physical aspect of distribution. The distribution can be
carried out through the channel members and they would comprise of manufacturer, distributor,
wholesaler/dealer and retailer. The increase in length of the distribution channel increases the
distance between the customer and manufacturer.

Organizations can employ distribution alternatives on the basis of their products and they,
include:

 Intensive distribution: It involves making the product available at all possible outlets,
example of soft drinks which are available through multiple outlets to ensure easy
availability to the customer.
 Exclusive distribution: The firm decides to distribute through one or two major outlets,
example of designer wear or high priced automobiles.
 Selective distribution: This is the middle path approach to distribution as the firm selects
some outlets to distribute its products thereby enabling the manufacturer gain optimum
market coverage and more control.

Maggi employs intensive distribution. Its channel partners include distributors, retailers and
consumers. Nestle follows a twofold path for distribution. In the first, the product is available to
every local store and the second where the stock is made available in every mall and shopping
centers.

4C'S - CONSUMER-ORIENTED MODEL OF MARKETING MIX

In the recent times, the customer has gained importance and the concept of 4C‘shas been seen as
an extension of 4P’s. According Lauterborn, the 4C’s are consumer, cost, communication and
convenience.

Consumer - In this model the Product is replaced by Consumer. Marketers focus more on the
needs, wants and demands of consumer. The product is designed and produced considering the
requirements of consumer.
Cost - Price is replaced by Cost. The cost refers to the total cost of owning a product. It includes
cost to use the product, cost to change the product, and cost of not choosing the competitor's
product.
Communication - Promotion is replaced by Communication. According to Lauterborn promotion
is manipulative while communication is cooperative. Communication includes
advertising, public relation, personal selling, and any method that can be used to encourage
proper, timely, and accurate communication between marketer and consumer.
Convenience - Place is replaced by Convenience. It focuses on the convenience in getting
product information, convenience in reaching to the store/product, and ease of buying.
Marketing Mix for Service Sector
An expanded marketing mix for services was proposed by Booms and Bitner (1981), consisting
of the 4 traditional elements–product, price, place, and promotion and three additional elements–
physical evidence, participants, and process. These additional elements go beyond the
conventional 4Ps and distinguish ‘customer service’ for service firms from that of manufacturing
firms.

7 PS OF THE SERVICE MARKETING MIX

The customer service for a service firm cannot be distinctly divided into pre-purchase and post-
purchase elements, because production and consumption of a service takes place at the same
time. The service provided can prove to be effective in terms of satisfying the customer, only if
the gap between which is expected service and offered service is decreased. More the wider gap
more the number of disappointed customers; and disappointed customers may result in lowering
that company’s image. Hence understanding the 7P’s of services mix becomes important.
1. Product
Most of the services are not visible because they are performances rather than objects, specific
manufacturing procession concerning uniform quality can rarely be set. Because of this
intangibility, the firm may find it difficult to understand how consumers perceive their services.
To develop a good customer service, the service marketer should focus on tangible cues and also
create a strong organisational image. This can be done by communicating clearly to the
customers the features of the service being provided.
 ICICI Bank provides a variety of banking products for all its customers. The major
product of ICICI bank is its excellent customer service. The bank is known for its 12
hours operation and for its out of the box customer service initiatives. It has equal focus
on retail customers as well as customers belonging to the corporate world. Their banking
products include:
 Consumer Banking – It includes a number of deposits like Saving account, Recurring
account, Fixed deposit account, special accounts for senior citizens and also teenagers.
 Cards – These cards include Credit card, Travel card and Debit cards.
 Investment banking – Various options like Tax Saving Bonds, Mutual Funds, Foreign
Exchange Services and Pure Gold Investments are provided.
 Loans – This include Personal Loans, Medical Equipment loans, Farm Equipment Loans,
Vehicle Loans and Loans against Securities.
  Finance – Channel Finance is one of the strong products which ICICI bank has in its
kitty. Plus, there are numerous forms of Finance provided by the bank.
 Corporate Banking
 Insurance – ICICI bank is known for its large portfolio of Insurance options.
 Wealth Management
 Private Banking

2. Price
Due to the intangible nature of the service–price becomes an important quality indicator in
conditions where other information is unavailable. It is essential that the service firm provide
competitive pricing, thereby get an edge over competitors. In the case of services, like medical or
legal services, price is the deciding factor because the customer makes a final choice among
several competing service organizations on the basis of price at which the service is offered.

The pricing objective at Big Bazaar is to get “Maximum Market Share”. Pricing at Big Bazaar is
based on the following techniques:
 Value Pricing (EDLP – Every Day Low Pricing): Big Bazaar promises consumers the
lowest available price without coupon clipping, waiting for discount promotions, or
comparison shopping.
 Promotional Pricing: The concept of psychological discounting (Rs.99, Rs.49, etc.) is
used to attract customers. Big Bazaar also caters on Special Event Pricing (Close to
Diwali, GudiPadva and DurgaPooja).
 Differentiated pricing i.e. difference in rate based on peak and non-peak hours or days of
shopping is also a pricing technique used in Indian retail, which is aggressively used by
Big Bazaar. Eg. Wednesday Bazaar.
 Bundling: it refers to selling combo-packs and offering discount to customers. The
combo-packs add value to customer and lead to increased sales. Big Bazaar lays a lot of
importance on bundling. E.g. 3 Good Day family pack at Rs.60 (Price of 1 pack = Rs.22)
5kg oil + 5kg rice + kg sugar for Rs.599

3. Place
Services are performances which cannot be stored; hence businesses offering services
find it difficult to balance between the supply and demand. A service firm must make
simultaneous adjustments in demand and capacity to achieve a closer match between
the two. The firm could choose to use multisite locations to make the service
more reachable to the users as a service regardless of the numerous advantages might not
be selected if it is focused in far off places.

Domino’s pizza has always maintained a direct channel with its customer base. The
customers either call or send a message by telephone for the pizza delivery. Consumers
can also place their order online through the official website of Dominos. In both the
cases, the packaged food product is delivered and subsequently received by the buyer at
the mentioned address. If the order does not reach the buyer in allotted thirty minutes,
then the buyer does not have to pay for it. The order is delivered free of charge.
Dominos also has many dine out outlets in very good locations.

4. Promotion
The service marketer should constantly work towards developing word-of-mouth
communications apart from using the regular advertising. In case the company’s image in
existing markets does not match with reality, traditional marketing techniques may be
used to communicate affectively the real image. Communication involves informing the
customers in a language they can best understand, especially in the case of services, post-
purchase communication is very important, because retaining existing customers is as
important, or even more important than attracting new customers.

Vodafone one of the world’s greatest telecommunication brands frequently uses local
recognition to reach and maintain trust of its local customers. To help promote its global
appeal and to communicate its brand value, the telecommunication giant often uses
popular sports stars like Mary Kom, David Beckham, Michael Schumacher and others.It
also advertises its brand value and offers through billboards, TV commercials and other
social media outlets in order to reach a large number of people. The most famous move
by Vodafone worldwide was the use of Vodafone zoo zoos in India during the Indian
premier league(IPL). Vodafone zoo zoos are the most famous brand ambassadors for
them and are recognized by one and all over the world. In addition, the company sends
frequent press releases to keep their customers informed of new products and offers.

5. Physical Evidence
Physical evidence, like the environmental surroundings greatly affect the
customer’s expectations of the service. As services cannot be readily displayed, a
conducive environment should be created so as to help the customers develop a positive
opinion of the service. People would not like to wait if the surroundings of the place they
are made to wait are unpleasant. Customers can be turned off by small changes in the
design of the service facility or even the absence of clear signboards.

The leading coffee chain across the world, Café coffee day has several products which
appeal to the Indian audience, the organization uses various elements of evidence:
Logo, images, brand: Café Coffee Day uses bright red in its logo. RED stands for
leadership, vitality, passion for coffee. The current logo has a dialogue box and
concentrates on coffee and conversations. Their current tag line “A lot can happen over
coffee” supporting the same.
Architecture and Décor: Largely wood and granite based interior with young colours of
today, like limegreen, yellow, orange, and purple predominate.
Literature: The literature provided by Café Coffee Day is indicative of its youthful image.
Themenus, posters, pamphlets are all designed to attract young and young at heart.

6. People
Most of the services are labour intensive; the behaviour of the staff providing the service
and the customers involved in production (due to the inseparable nature of services), have
an effect on providing efficient customer service. In order to focus on customer-oriented
approach, the organization needs to hire the right people and train them to enhance their
skills and reward them with adequate pay. There is a mutual dependence between the
customers and employees. Dissatisfied customers affect employees and similarly
untrained staff reduce customer satisfaction. This mutual dependence influences the
customer’s perception of the service.
The people in Madhya Pradesh tourism consists of Tour operators, Tourist transport
operators, Hotel staff, Tourist guides as well as the main operations staff. Madhya
Pradesh tourism board also has amazing ways of rewarding employees through awards
such as
Tourism friendly forester (Whoever maintains forests)
Tourism friendly archeologist (Taking care of heritage)
Most frequent tourist visiting MP (Encouraging government to take part)
Thus employing its people flawlessly.

7. Process
The quality, or the ‘how’ of service delivery is more important in the case of service
industries, as it is difficult to separate the technical quality, or the ‘what’ of service
delivery. The past experience with a service also affects the expectations of the customer
as in case a customer has a bad experience with the service on any previous occasion, it
will influence his or her future perception of the service. Therefore, it is essential to train
the front line employees, whose actions and behaviour influence the customer’s opinions
of the organisation and the actual service provided.

The process at Apollo Hospitals, one of the premium hospital chains in India involves
very established procedures and documentation. It has been a major player in scripting
the medical landscape of the nation. This is primarily because the group has
 continuously been at the helm of several game changing innovations in Indian healthcare.
Apollo hospitals in NABH, NABL accrediated and also has ISO 9002 award.

The service which a customer actually gets and how he sees it may not always match,
hence the customers evaluation of a service is an important factor on the delivery of the
service. Controlling the service marketing mix variables will enable the marketers shape
the perceptions of customer. Hence, organizations concentrating on employees and
customers might increase both employee motivation and customer satisfaction.

KNOWLEDGE ASSESSMENT 3
1 The marketing mix consists of; -
(a) Product, physical evidence, place, process
(b) Process, price, place, packaging
(c) People, process, place, promotion
(d) Product, place, promotion, place

2 Increasing the features and quality you offer is a decision made by which marketing mix?
(a) Product
(b) Price
(c) Promotion
(d) Place

3 Design is a _____ decision

(a) Product
(b) Price
(c) Promotion
(d) Place

4 Giving retailer an incentive to sell your product/service is the responsibility of which

marketing mix?
(a) Product
(b) Price
(c) Promotion
(d) Place