The marketing mix is the set of controllable elements or variables that a company uses to influence and meet the needs of its target customers in the most effective and efficient way possible. These variables are often grouped into four key components, often referred to as the "Four Ps of Marketing."
Product: This represents the physical or intangible offering that a company provides to its customers. It includes the design, features, quality, packaging, branding, and any additional services or warranties associated with the product.
Price: Price refers to the amount of money customers are willing to pay for the product or service. Setting the right price is crucial, as it not only affects the company's profitability but also influences consumer perception and purchasing decisions.
Place (Distribution): Place involves the strategies and channels used to make the product or service accessible to the target market. It encompasses decisions related to distribution channels, retail locations, online platforms, and logistics.
Promotion: Promotion encompasses all the activities a company undertakes to communicate the value of its product or service to the target audience. This includes advertising, sales promotions, public relations, social media marketing, and any other methods used to create awareness and generate interest in the offering.[1] 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".[2]
Marketing theory emerged in the early twenty-first century. The contemporary marketing mix which has become the dominant framework for marketing management decisions was first published in 1984.[3] In services marketing, an extended marketing mix is used, typically comprising the 7 Ps (product, price, promotion, place, people, process, physical evidence), made up of the original 4 Ps extended by process, people and physical evidence.[4] Occasionally service marketers will refer to 8 Ps (product, price, place, promotion, people, positioning, packaging, and performance), comprising these 7 Ps plus performance.[5]
In the 1990s, the model of 4 Cs was introduced as a more customer-driven replacement of the 4 Ps.[6] There are two theories based on 4 Cs: Lauterborn[who?]'s 4 Cs (consumer, cost, convenience, and communication), and Shimizu[who?]'s 4 Cs (commodity, cost, channel, and communication).
The correct arrangement of marketing mix by enterprise marketing managers plays an important role in the success of a company's marketing:[7]
Develop strengths and avoid weaknesses
Strengthen the competitiveness and adaptability of enterprises
Ensure the internal departments of the enterprise work closely together
The origins of the 4 Ps can be traced to the late 1940s.[8][9] The first known mention of a mix has been attributed to a Professor of Marketing at Harvard University, James Culliton.[10] In 1948, Culliton published an article entitled, The Management of Marketing Costs[11] in which Culliton describes marketers as "mixers of ingredients". Years later, Culliton's colleague, Professor Neil Borden, published a retrospective article detailing the early history of the marketing mix in which he claims that he was inspired by Culliton's idea of "mixers", and credits himself with popularising the concept of the "marketing mix".[12] According to Borden's account, he used the term, "marketing mix" consistently from the late 1940s. For instance, he is known to have used the term "marketing mix" in his presidential address given to the American Marketing Association (AMA) in 1953.[13]
Marketing mix diagram
Although the idea of marketers as "mixers of ingredients" caught on, marketers could not reach any real consensus about what elements should be included in the mix until the 1960s.[14] Early schemas to define mix include:[15]
1961 Albert Frey defined two groups of the offering (product, brand, and price) and the method (advertising, sales promotion, personal selling, publicity, distribution channels, marketing research, strategy)
1962 Lazer and Kelley defined three groups of the goods mix (product, brand, and price), the distribution mix (channels and physical distribution), and the communication mix (advertising and sales).
1957 John Howard defined four groups of product, price, channel, and promotion[15][16]
The 4 Ps, in its modern form, was first proposed in 1960 by E. Jerome McCarthy, who presented them within a managerial approach that covered analysis, consumer behavior, market research, market segmentation, and planning.[17]Phillip Kotler popularised this approach and helped spread the 4 Ps model.[18][2] McCarthy's 4 Ps have been widely adopted by both marketing academics and practitioners.[19]
The prospect of extending the marketing mix first took hold at the inaugural AMA conference dedicated to Services Marketing in the early 1980s, and built on earlier theoretical works pointing to many important limitations of the 4 Ps model.[20] Taken collectively, the papers presented at that conference indicate that service marketers were thinking about a revision to the general marketing mix based on an understanding that services were fundamentally different from products, and therefore required different tools and strategies. In 1981, Booms and Bitner proposed a model of 7 Ps, comprising the original 4 Ps extended by process, people and physical evidence, as being more applicable for services marketing.[21]
Since then, there have been a number of different proposals for a service marketing mix (with various numbers of Ps); most notably the 8 Ps, comprising the 7 Ps above, extended by 'performance'.[5]
The original marketing mix, or 4 Ps, as originally proposed by marketers and academic Philip Kotler and E. Jerome McCarthy, provides a framework for marketing decision-making.[6] McCarthy's marketing mix has since become one of the most enduring and widely accepted frameworks in marketing.[22] McCarthy's 4 Ps has remained influential in marketing theory and practice, serving as a cornerstone for analyzing and optimizing marketing strategies in various industries.[23]
Promotional mix - the appropriate balance of advertising, PR, direct marketing, and sales promotion
Message strategy - what is to be communicated
Channel/ media strategy - how to reach the target audience
Message Frequency - how often to communicate
The 4Ps have been the cornerstone of the managerial approach to marketing since the 1960s
Product refers to what the business offers for sale and may include products or services. Product decisions include the "quality, features, benefits, style, design, branding, packaging, services, warranties, guarantees, life cycles, investments and returns".[26]
Price refers to decisions surrounding "list pricing, discount pricing, special offer pricing, credit payment or credit terms". Price refers to the total cost to a customer to acquire the product, and may involve both monetary and psychological costs such as the time and effort spent in acquisition. Distribution channels taken into consideration including retailer, wholesaler, Business to Business or Business to Customer .[26]
Place is defined as the "direct or indirect channels to market, geographical distribution, territorial coverage, retail outlet, market location, catalogues, inventory, logistics, and order fulfillment". Place refers either to the physical location where a business carries out business or the distribution channels used to reach markets. Place may refer to a retail outlet, but increasingly refers to virtual stores such as "a mail order catalogue, a telephone call centre or a website. Example, firms that produce luxury goods like Louis Vuitton employ an intensive placement strategy by making their products available at only a few exclusive retailers. In contrast, lower priced consumer goods like toothpaste and shampoo, typically employ an extensive placement strategy by making their products available to as many different retailers as possible."[26]
Promotion refers to "the marketing communication used to make the offer known to potential customers and persuade them to investigate it further".[26] Promotion elements include "advertising, public relations, direct selling and sales promotions."
By the 1980s, a number of theorists were calling for an expanded and modified framework that would be more useful to service marketers. The prospect of expanding or modifying the marketing mix for services was a core discussion topic at the inaugural AMA Conference dedicated to Services Marketing in the early 1980s, and built on earlier theoretical works pointing to many important problems and limitations of the 4 Ps model.[20] Taken collectively, the papers presented at that conference indicate that service marketers were thinking about a revision to the general marketing mix based on an understanding that services were fundamentally different from products, and therefore required different tools and strategies. In 1981, Booms and Bitner proposed a model of 7 Ps, comprising the original 4 Ps plus people, process, and physical evidence, as being more applicable for services marketing.[21][27]
Table 2: Outline of the Expanded Marketing Mix to the Original
Category
Definition/ Explanation
Typical Marketing Decisions
People
Human factors who participate in service delivery.[28]
Service personnel who represent the company's values to customers.
The procedures, mechanisms and flow of activities by which service is delivered.
Process design
Blueprinting (i.e. flowcharting) service processes[30]
Standardization vs customization decisions
Diagnosing fail-points, critical incidents and system failures
Monitoring and tracking service performance
Analysis of resource requirements and allocation
Creation and measurement of key performance indicators (KPIs)
Alignment with Best Practices
Preparation of operations manuals
Physical evidence
The environment in which service occurs.
The space where customers and service personnel interact.
Tangible commodities (e.g. equipment, furniture) that facilitate service performance.
Artifacts that remind customers of a service performance.[31]
Facilities (e.g. furniture, equipment, access)
Spatial layout (e.g. functionality, efficiency)
Signage (e.g. directional signage, symbols, other signage)
Interior design (e.g. furniture, color schemes)
Ambient conditions (e.g. noise, air, temperature)
Design of livery (e.g. stationery, brochures, menus, etc.)
Artifacts: (e.g. souvenirs, mementos, etc.)
People are essential in the marketing of any product or service. Personnel stand for the service. In the professional, financial, or hospitality service industry, people are not producers, but rather the products themselves.[32] When people are the product, they impact public perception of an organization as much as any tangible consumer goods. From a marketing management perspective, it is important to ensure that employees represent the company in alignment with broader messaging strategies.[33] This is easier to ensure when people feel as though they have been treated fairly and earn wages sufficient to support their daily lives.
Process refers to a "set of activities that results in delivery of the product benefits". A process could be a sequential order of tasks that an employee undertakes as a part of their job. It can represent sequential steps taken by a number of various employees while attempting to complete a task. Some people are responsible for managing multiple processes at once. For example, a restaurant manager should monitor the performance of employees, ensuring that processes are followed. They are also expected to supervise while customers are promptly greeted, seated, fed, and led out so that the next customer can begin this process.[33]
Physical evidence refers to the non-human elements of the service encounter, including equipment, furniture and facilities. It may also refer to the more abstract components of the environment in which the service encounter occurs including interior design, colour schemes and layout. Some aspects of physical evidence provide lasting proof that the service has occurred, such as souvenirs, mementos, invoices and other livery of artifacts.[32] According to Booms and Bitner's framework, the physical evidence is "the service delivered and any tangible goods that facilitate the performance and communication of the service".[33] Physical evidence is important to customers because the tangible goods are evidence that the seller has (or has not) provided what the customer was expecting.
Lauterborn's 4 Cs (1990)
Robert F. Lauterborn proposed a 4 Cs classification in 1990.[34] His classification is a more consumer-orientated version of the 4 Ps[35] that attempts to better fit the movement from mass marketing to niche marketing:[34]
A company will only sell what the consumer specifically wants to buy. So, marketers should study consumer wants and needs in order to attract them one by one with something they want to purchase.[34][36]
Price is only a part of the total cost to satisfy a want or a need. The total cost will consider for example the cost of time in acquiring a good or a service, a cost of conscience by consuming that or even a cost of guilt "for not treating the kids".[34] It reflects the total cost of ownership. Many factors affect cost, including but not limited to the customer's cost to change or implement the new product or service and the customer's cost for not selecting a competitor's product or service.[37]
In the era of Internet,[36] catalogues, credit cards and phones, consumers neither need to go anywhere to satisfy a want or a need nor are they limited to a few places to satisfy them. Marketers should know how the target market prefers to buy, how to be there and be ubiquitous, in order to guarantee convenience to buy.[34][38] With the rise of Internet and hybrid models of purchasing, Place is becoming less relevant. Convenience takes into account the ease of buying the product, finding the product, finding information about the product, and several other factors.[citation needed]
While promotion is "manipulative" and from the seller, communication is "cooperative" and from the buyer[34] with the aim to create a dialogue with the potential customers based on their needs and lifestyles.[38] It represents a broader focus. Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the organization and the consumer[citation needed].
Shimizu's 4 Cs: in the 7Cs Compass Model
Koichi Shimizu, a professor at Josai University proposed a 4 Cs classification of marketing mix in 1973. Then in 1979, it was expanded to the 7Cs Compass Model.[39] The 7Cs Compass Model is a framework of co-marketing, which is a marketing strategy where business entities collaborate closely in their marketing efforts. Also the co-creation marketing of a company and consumers are contained in the co-marketing. Co-marketing (or collaborative marketing) is a marketing practice where two companies cooperate with separate distribution channels, sometimes including profit sharing. It is frequently confused with co-promotion. Also commensal (symbiotic) marketing is a marketing on which both corporation and a corporation, a corporation and a consumer, country and a country, human and nature coexist.[40][41][42][43][44][45][46]
The core of 4Cs is the corporation itself (company and non profit organization) Other elements include competitors, organizations, and stakeholders within the corporation. The company has to think of compliance and accountability as important. The competition in the areas in which the company competes with other firms in its industry.
(Latin derivation: commodus=both convenient and happy): Co-creation goods and services. The goods and services created by corporations and consumers together. Commodity here is different from commoditization. Product out is useless. It is no good to buy it because we made it.
(Latin derivation: constare= It makes sacrifices together): Producing cost, selling cost, purchasing cost and Costs for society and the global environment.
The factors related to consumers can be explained by the first character of four directions marked on the compass model. These can be remembered by the cardinal directions, hence the name compass model:
(C7) Circumstances – (Needle of compass to circumstances )
In addition to the consumer, there are various uncontrollable external environmental factors encircling the companies. Here it can also be explained by the first character of the four directions marked on the compass model:
W = Weather: The keywords not found in other models. Consideration of extreme weather, climate change and natural disasters is necessary to make the earth sustainable.
These can also be remembered by the cardinal directions marked on a compass. The 7 Cs Compass Model is a framework in co-marketing (symbiotic marketing). It has been criticized for being little more than the 4 Ps with different points of emphasis. In particular, the 7 Cs inclusion of consumers in the marketing mix is criticized, since they are a target of marketing, while the other elements of the marketing mix are tactics. The 7 Cs also include numerous strategies for product development, distribution, and pricing, while assuming that consumers want two-way communications with companies.
Digital Marketing Mix
Digital marketing mix is fundamentally the same as Marketing Mix, which is an adaptation of Product, Price, Place and Promotion into digital marketing aspect.[48] Digital marketing can be commonly explained as 'Achieving marketing objectives through applying digital technologies'.[49]
Product
Thanks to the interaction and connection of the Internet, product has been redefined as "virtual product" in the digital marketing aspect, which is regarded as the combination of tangibility and intangibility. Through the form of digital, a product can be directly sent from manufacturers to customers.[50] For example, customers could buy music in the form of an MP3 rather than buy it in the form of a physical CD. As a result, when a company is making strategy for Internet marketing, it is necessary to understand how to vary their products in the online environment. Here are some indications of adapt the product element on the Internet.[49]
Modifying the core product: In this case, it particularly refers to the products that can be remodeled into digital forms including movies, music, books and other publishing etc. Take Netflix as an example. The wide use of Internet has changed its form of products from selling and renting DVDs through retail stores into selling and renting video online.
Providing digital products: In order to gain market shares in the Internet, companies need to widen its product range. For example, a psychological counseling could offer online consultation via video calls.
Building the whole product: Apart from selling products online, Amazon.com also provides a paid subscription service called Amazon Prime, with which customers could enjoy free delivery and videos on Amazon.
Conducting online research: The Internet offers a low-cost and convenient way of making marketing researches, which is helpful for companies to find out what products or services do customers prefer.
Price concerns about the pricing policies or pricing models from a company. Due to the wide use of the Internet, many applications could be found in both consumer's and producer's perspective. From consumers' side, the Internet enables people to make a comparison to real-time prices before they make a consumption decision, which is time-saving and effort-saving for the consumers.[51] As for the suppliers, they can adjust prices in the real-time and provide higher degree of price transparency with customers. Besides, the Internet is more likely to ease the pressure on price because online-producers do not have to put budget on renting a physical store.[49] Hence, making new or adjusting pricing strategies is essential for the company that wants to enter the Internet market.
Place
With the application of the Internet, place is playing an increasingly important role in promoting consumption since the Internet and the physical channels become virtual.[48] The major contribution from the Internet to the business is not only making it possible to selling products online, but also enabling companies to build relationships with customers.[51] Furthermore, since the convenience of navigating from one site to another, place from the digital marketing perspective is always linked with promotion, which means retailers often use third-party websites such as Google search engine to guide customers to visit their websites.[49]
Promotion
Promotion refers to selecting the target markets, locating and integrating various communication tools in the marketing mix. Unlike the traditional marketing communication tools, tools in digital marketing aim at engaging audiences by putting advertisements and content on the social media, including display ads, pay-per-click (PPC), search engine optimisation (SEO), influencers etc.[49] When creating online marketing campaigns, Chaffey and Smith suggested that they can be separated into six groups:[52]
Social media marketing, starting and participating in customer to customer, customer to company interaction through social media.
The Internet Mix
The Internet Mix, was first proposed by Sidney (Sid) Peimer in a 2004 article in Bizcommunity, where he identified the Internet Mix as consisting of three elements:[53]
Marketing is the act of satisfying and retaining customers. It is one of the primary components of business management and commerce.
Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. Distribution can be done directly by the producer or service provider or by using indirect channels with distributors or intermediaries. Distribution is one of the four elements of the marketing mix: the other three elements being product, pricing, and promotion.
Marketing management is the strategic organizational discipline that focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of marketing resources and activities. Compare marketology, which Aghazadeh defines in terms of "recognizing, generating and disseminating market insight to ensure better market-related decisions".
Personalized marketing, also known as one-to-one marketing or individual marketing, is a marketing strategy by which companies use data analysis and digital technology to show adverts to individuals based on their perceived characteristics and interests. Marketers use methods from data collection, analytics, digital electronics, and digital economics then use technology to analyze it and show personalized ads based on algorithms that attempt to deduce people’s interests.
Services marketing is a specialized branch of marketing which emerged as a separate field of study in the early 1980s, following the recognition that the unique characteristics of services required different strategies compared with the marketing of physical goods.
Marketing communications refers to the use of different marketing channels and tools in combination. Marketing communication channels focus on how businesses communicate a message to their desired market, or the market in general. It is also in charge of the internal communications of the organization. Marketing communication tools include advertising, personal selling, direct marketing, sponsorship, communication, public relations, social media, customer journey and promotion.
Advertising management is how a company carefully plans and controls its advertising to reach its ideal customers and convince them to buy.
In marketing, promotion refers to any type of marketing communication used to inform target audiences of the relative merits of a product, service, brand or issue, persuasively. It helps marketers to create a distinctive place in customers' mind, it can be either a cognitive or emotional route. The aim of promotion is to increase brand awareness, create interest, generate sales or create brand loyalty. It is one of the basic elements of the market mix, which includes the four Ps, i.e., product, price, place, and promotion.
An advertising campaign or marketing campaign is a series of advertisement messages that share a single idea and theme which make up an integrated marketing communication (IMC). An IMC is a platform in which a group of people can group their ideas, beliefs, and concepts into one large media base. Advertising campaigns utilize diverse media channels over a particular time frame and target identified audiences.
Business marketing is a marketing practice of individuals or organizations. It allows them to sell products or services to other companies or organizations, who either resell them, use them in their products or services, or use them to support their work.
The target audience is the intended audience or readership of a publication, advertisement, or other message catered specifically to the previously intended audience. In marketing and advertising, the target audience is a particular group of consumer within the predetermined target market, identified as the targets or recipients for a particular advertisement or message.
Once the strategic plan is in place, retail managers turn to the more managerial aspects of planning. A retail mix is devised for the purpose of coordinating day-to-day tactical decisions. The retail marketing mix typically consists of six broad decision layers including product decisions, place decisions, promotion, price, personnel and presentation. The retail mix is loosely based on the marketing mix, but has been expanded and modified in line with the unique needs of the retail context. A number of scholars have argued for an expanded marketing, mix with the inclusion of two new Ps, namely, Personnel and Presentation since these contribute to the customer's unique retail experience and are the principal basis for retail differentiation. Yet other scholars argue that the Retail Format should be included. The modified retail marketing mix that is most commonly cited in textbooks is often called the 6 Ps of retailing.
Co-marketing is a form of marketing co-operation, in which two or more businesses work together.
Edmund Jerome McCarthy was an American marketing professor and author. He proposed the concept of the 4 Ps marketing mix in his 1960 book Basic Marketing: A Managerial Approach, which has been one of the top textbooks in university marketing courses since its publication. According to the Oxford Dictionary of Marketing, McCarthy was a "pivotal figure in the development of marketing thinking". He was also a founder, advisory board member, and consultant for Planned Innovation Institute, which was established to bolster Michigan industry. In 1987, McCarthy received the American Marketing Association's Trailblazer Award, and was voted one of the "top five" leaders in marketing thought by the field's educators.
Marketing effectiveness is the measure of how effective a given marketer's go to market strategy is toward meeting the goal of maximizing their spending to achieve positive results in both the short- and long-term. It is also related to marketing ROI and return on marketing investment (ROMI). In today's competitive business environment, effective marketing strategies play a pivotal role in promoting products or services to target audiences. The advent of digital platforms has further intensified competition among businesses, making it imperative for companies to employ innovative and impactful marketing techniques. This essay examines how various types of advertising methods can be utilized effectively to reach out to potential consumers
The following outline is provided as an overview of and topical guide to marketing:
Digital marketing is the component of marketing that uses the Internet and online-based digital technologies such as desktop computers, mobile phones, and other digital media and platforms to promote products and services. It has significantly transformed the way brands and businesses utilize technology for marketing since the 1990s and 2000s. As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly used digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of search engine optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing, display advertising, e-books, and optical disks and games have become commonplace. Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones, callbacks, and on-hold mobile ringtones. The extension to non-Internet channels differentiates digital marketing from online marketing.
Marketing Mix Modeling (MMM) is a forecasting methodology used to estimate the impact of various marketing tactic scenarios on product sales. MMMs use statistical models, such as multivariate regressions, and use sales and marketing time-series data. They are often used to optimize advertising mix and promotional tactics with respect to sales, revenue, or profit to maximize their return on investment.
A target market, also known as serviceable obtainable market (SOM), is a group of customers within a business's serviceable available market at which a business aims its marketing efforts and resources. A target market is a subset of the total market for a product or service.
Word-of-mouth marketing is the communication between consumers about a product, service, or company in which the sources are considered independent of direct commercial influence that has been actively influenced or encouraged as a marketing effort. While it is difficult to truly control word of mouth communication, there are three generic avenues to 'manage' word of mouth communication for the purpose of word-of-mouth marketing, including:
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