The marketing mix is a crucial part of all marketing decision-making. However, with the advent of new communications channels over the past few decades, it has fallen out of favour with CMOs looking to create a strategy.
Also known as the Four Ps, the marketing mix refers to four critical areas of marketing that should be addressed in every marketing strategy. Over the years, many models have arisen which have sought to add to or replace the marketing mix (most notably the Four Cs model proposed in the 1990s by Robert Lauterborn), but the basics of the original ideas are still recognised as the best means of approaching the task.
Neil Borden was the first to write about the marketing mix, doing so in an article back in the 1940s. The article highlighted the work of his colleague James Culliton and expanded on his ideas to create a broader concept. Culliton is often credited with the first mention of the marketing mix, but he merely spoke of marketers as “mixers” rather than describing a more concrete process.
Even though Borden’s ideas were received fairly well, marketers remained at odds when it came to determining the exact parts of the marketing mix. Ultimately, the Four Ps model was popularised by Phillip Kotler after it was developed by Jerome McCarthy.
The Four Ps of the marketing mix are:
Despite the aforementioned attempts to add to or change this model, it has been quintessentially unchanged for almost 40 years. While certain brands may base their sales model on one particular element of the model more than others, all need to be considered for a proper marketing strategy to work.
The product is the item or service which satisfies the needs or desires of a consumer. Products can be abstract in their nature, for example, a service that is marketed as a wholesome experience rather than a simple exchange of work. Branding – one of the more widely recognised marketing concepts – falls into the product category.
Before any branding can begin, the product needs to be developed. In some cases, marketing departments will be presented with a product and asked to sell it to the masses, but according to the marketing mix model, marketers should be involved in this part of the process as they should have a better understanding of the challenges of translating a concept into a viable product. History is littered with plenty of products that work well but simply aren’t needed (Google Glass anyone?), so bringing them into this process can help shape future planning rather than necessitating a retro-fit.
Branding is a crucial part of the product phase. Fundamentally, many products are alike, but their branding is what sets them apart from one another. More than just creating a logo, packaging or tone of voice, branding needs to consider the overall goals of the company. For example, if the company would prefer to sell fewer products as it has an immature supply chain, it would make sense to forge a high-end brand image that will allow for a higher price.
Part of the branding process also involves considering where the product fits in the overall range. For example, if a company introduces a diet version of its staple product, it will need to consider the possible cannibalisation of the first brand’s profits, and furthermore, it has to determine the brand architecture.
The last of these points is key to the way in which the product forges its identity. There are a few means of branding a product:
There are many examples of umbrella brands, with one of the most recognisable in the UK being Sky. Despite the vast array of products, including TV channels, internet, and betting services to name a few, the Sky name and logo stays the same and is used for all of these products. The umbrella brand enables newer products to get a leg-up when starting out by riding on the coattails of the brand equity forged by the pre-existing brand.
For these brands, the parent company’s name is featured as a part of the identity but doesn’t necessarily feature in its name. A popular example is Kellogg’s, which features its own logo on that of its product but has individual brands with distinctive assets (e.g. Coco Pops and Corn Flakes). The main advantage of using sub-brands is that products are afforded greater scope to be marketed to different consumers while retaining the authority of the parent brand.
Some products are marketed without reference to the company which owns the brand. One example is AB InBev, a holding company which owns brands such as Budweiser, Corona and Stella Artois. Each of these brands makes no reference to its owner and is presented as an independent, which affords them even greater scope than sub-brands to carve a specific niche in the target market.
The price is the amount the product is sold for at the point of sale. Additionally, price can refer to additional criteria that consumers may need to meet or fulfil to obtain a product. For example, the price of a car considers how long a consumer may be willing to save to make a purchase. Similarly, price also considers the perceived value in the opinion of the consumer rather than solely the literal price of the product.
The competition needs to be considered very carefully when deciding on price, and ultimately much of the pricing strategy should be considered in tandem with the branding of the product. For example, undercutting a competitor price-wise may help boost sales in the short term, but it could equally lead to a perception of poorer quality even if no such difference exists.
Sales are a tricky concept to deal with in the price category, and this is because if a company offers too many, it will undercut the perceived value and brand of the product. In turn, this can mean that companies end up in a cycle of continually offering “sale” prices (think DFS’s neverending “sale”) because a return to the norm would put off the consumer base.
A more viable alternative can be to offer products at a discounted rate when purchased alongside others. For retailers, this can be a good way of selling more units without losing out on extra revenue (e.g. meal deals), and for brands, it can help encourage consumers to make multiple purchases.
Placement refers to where the product is sold and how easy it is for consumers to make a purchase. The process of deciding how consumers purchase the product does not consider brand availability in the mind of the consumer, but rather the physical presence or location of the product.
One of the most important aspects of placement is deciding how the product will be distributed. The distribution of a product is essential when it comes to determining its placement. Typically, distribution can follow a few different approaches, including:
Intensive distribution works on the principle of mass marketing as the company looks to place the product at all possible points of purchase. This method gives your product the best chance of success as it casts the widest net; however, a closer analysis will usually reveal certain areas where the product is performing differently, meaning that efforts to refocus the distribution into areas of higher profitability could help increase revenue.
Selective distribution involves choosing a smaller group of retailers and selling your products through these channels alone. Selective distribution can be the natural step for new brands who have used intensive distribution to penetrate the market and have thereafter determined where it is performing well.
Exclusive distribution is more commonly used by high-end brands that do not want to saturate their market, as this would damage the brand equity (i.e. make it seem readily available rather than premium). Using this method affords the brand more control and can help with simplifying the supply chain.
Understanding the market share of a product is also an important part of the placement process. In the long term, it can help you see how it is performing compared to competitor brands, but it can also help inform other areas of the marketing mix. For example, if your product has a relatively low market share (e.g. 10%), it will need to put out more communications in comparison to larger brands in the sector if it wants to grow. This concept is known as share of voice.
Promotion is the marketing communications branch of the marketing mix. Considering how much time is typically dedicated to comms when referencing changes to marketing as a discipline, the fact that it only takes up a quarter of the model highlights how much the other areas have become neglected.
Deciding on the nature of marketing communications is key to any strategy too, as in many instances, the tactics are agreed before establishing the objectives of the communications. For example, a company may want to promote a new range of exercise equipment, but prior to looking at the target demographic, it decides to use social to promote the products. In this case, the company has lost its strategic edge, as even if social turns out to be the right choice for the promotion, it will not understand the reasons why.
Having a simple message that can be easily communicated to the consumer is the first part of promotion, and only once this task is finished can marketers move on to deciding on the channel. After the channels have been identified, the balance between the chosen channels should be considered. Lastly, the frequency of any messaging across each channel will conclude the strategy phase of the promotion planning.
Marketing is much more than writing snappy copy or producing eye-catching ads, and only by understanding the marketing mix can we hope to achieve long-term, sustained success for our clients and brands.
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