1.

The Four P Components of the Marketing Mix

In marketing planning we use marketing information to assess the situation. We have to

select specific marketing targets in the form of market segments. For each segment of
subdivision of the market, we formulate a combination of a number of devices or types of
marketing activities that are coordinated into a single marketing programme to reach a
particular target or market segment. The combination of these marketing method or
devices is known as the marketing mix.

A successful marketing strategy must have a marketing mix as well as a target market for
which the marketing mix is prepared. The elements or variables that make up a marketing
mix are only four: (1) Decisions on product or service, (2) Decision on price, (3) Decision
on Promotion, and (4) Decision on place. These four ingredients are closely interrelated.
Under the systems approach, the decision in one area affects action in the others.
Marketing mix decisions constitute a large part of marketing management.

Marketing manager is a combination of all marketing ingredients and he creates a mix

(blending or combination) of all the marketing elements and resources. Marketing mix
offers an optimum (least cost) combination of all marketing ingredients so that we can
have realisation of company goals such as profit, return on investment, sales volume, and
market share and so on. It is profitable formula of our marketing operations. The marketing
mix will naturally be changing according to changing marketing conditions and also with
changing environmental factors (technical, social, economical and political) affecting each
market. It is, of course, based on marketing research and marketing information. It must
be fully related to customer demand, competition as well as other aforesaid environmental
forces. In the simplest manner, the basic marketing mix is the blending of four inputs or
sub mixes which form the core of the marketing system- (1) Product mix, (2) Price mix, (3)
Promotion mix, (4) Place mix. The outputs are optimum productivity and satisfaction.

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1. PRODUCT MIX: Product is the thing possessing utility. It has four components (1)
Product range (2) Service after sale, (3) Brand and (4) Package. The product
management involves product mix in consultation with marketing manager.

2. PRICE MIX: Price is the valuation placed upon the product by the offerer. It has to
cover pricing, discounts, allowances, terms of credit. It deals with price competition.

3. PROMOTION MIX: Promotion is the persuasive communication about the product

by the offerer to the prospect. It covers advertising, personal, selling, sales
promotion, publicity, public relations, exhibiting and demonstrations used in
promotion. Largely it deals with non-price competition.

4. PLACE MIX: Place includes distribution. Distribution is the delivery of the product
and right to consume it. It includes channels of distribution, transportation,
warehousing and inventory control.

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1. PRODUCT:

It is the thing possessing utility. It is the bundle of value the marketer offers to
potential customers. Today manufacturers are realizing that customer expects
more than just the basic product. Therefore the product must satisfy the
consumers needs. The manufacturer first understands the consumer needs and
then decides the type, shape, design ,brand, package etc. of the goods to be
produced. The product is a marketer‘s primary vehicle for delivering customer
satisfaction.

2. PRICE:

It is the amount of money asked in exchange for product. It must be reasonable so

as to enable the consumer to pay for the product. While fixing the price of a
product, the management considers certain factors such as cost, ability of the
consumers, competition, discount, allowances, margin of profit etc.

3. PLACE (PHYSICAL DISTRIBUTION):

It is the delivery of products at the right time and at the right place. It is the
combination of decision regarding channel of distribution (wholesalers, retailers
etc.), transportation, warehousing and inventory control.

4. PROMOTION:

It consist of all activities aimed at inducing and motivating customers to buy the
product. The selection of alternatives determine the success of marketing
efforts. Some firms use advertising, some others personal selling or sales
promotion. Thus promotion includes advertising public relations, personal selling
and sales promotion.

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Marketing-Mix Strategy

PRODUCT PRICE PROMOTION PLACE

Product variety List price Sales promotion Channels
Quality Discounts Advertising Coverage
Design Allowances Sales force Assortments
Features Payment period Public relations Locations
Brand name Credit terms Direct marketing Inventory
Packaging Transport
Sizes
Services
Warranties
Returns

Four Ps Four Cs

Product Customer Solution

Price Customer Cost

Place Convenience

Promotion Communication

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 2.Market Segmentation
Market consists of buyers, and buyers differ in one or more respects. Buyer‘s behavior is a
complex phenomenon. An understanding of the economic, psychological & socio-cultural
characteristics of the consumers and their motivations. Attitudes, cognitions. personalities
and perceptions can help to discover new market opportunities, clear and specific market
segmentation. All markets are made up of segments and these segments are made up of
sub-segments.

The products sold in the market are purchased by customers, who have various types of
characteristics. No two persons are alike but there are homogeneous groups which possess
similar needs, interests, ideas and other attributes. Each such group is termed as a
segment. For instance people purchase textile goods of various varieties. Some may like to
have cotton goods, some polyester and some may prefer khadi. This diversity may be due
to their income, habit, likes and dislikes, fashion, etc. All these constitute various segments.
In such a situation the seller may divide the market into various groups of consumers on
the basis of significant difference in buyer characteristics. This grouping of buyers into
different categories or segmenting the market is terms as “Market Segmentation.”

W.J. Stanton says, “Market segmentation consists of taking the total

heterogeneous market for product and dividing it into several sub-markets or
segments each of which tends to be homogeneous in all significant aspects.”

According to Philip Kotler, “Market segmentation is the sub-dividing of a market

into homogeneous sub-sets of customers where any sub-set may conceivably be
selected as a market target to be reached within a distinct marketing mix. The
power of this concept is that individual sellers may prosper through creatively
serving specific market segments whose needs are imperfectly satisfied by the
mass-market offerings.”

Thus market segmentation is the method of sub-division of the market to determine the
differences between the potential buyers. It is based on the assumption that the needs of
the consumers are different and the marketing system can be successful by catering to the
specific needs of smaller groups. The market segmentation constitutes an idea, that in the
existing social system different segments are formed on the basis of industrial, trading,
professional, geographical consumers and each segment necessitates a different marketing
approach to the consumers. It is the method of maximising marketing response with
minimum cost.
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 3.Major segmentation variables for consumer markets

Variable Typical Break down

Geographic
Pacific Mountain, West North Central, West South Central, East
Region North Central, East South Central, South Atlantic, Middle Atlantic,
New England
Under 5, 000-20,000; 20, 000-50, 000; 50, 000-100, 000; 100,
City of metro size 000-250, 000; 250, 000-500, 000; 500, 000-1, 000, 000; 1, 000,
000-4, 000, 000; 4, 000, 000 or over
Density Urban, suburban, rural
Climate Northern, Southern
Demographic
Age Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 65 or over
Gender Male, Female
Family Size 1-2, 3-4, 5 or more
Young single; Young, married, no children; young, married,
youngest child under 6; young married, youngest child 6 or over;
Family life of cycle
older, married, with children; older, married, no children under
18; older, single; other.
Under $ 10, 000; $ 10, 000-$ 15, 000; $ 15, 000-$ 20, 000; $
Income 20, 000-$ 30, 000; $ 30, 000-$ 50, 000; $ 50, 000- $ 100, 000;
$ 100, 000 and over
Professional and technical; managers, officials, and proprietor;
Occupation clerical, sales; craftspeople, foremen; operative; farmers;
retired; students; housewives; unemployed
Grade school or less; some high school; high school graduate;
Education
some college; college graduate

Religion Catholic, Protestant, Jewish, Muslim, Hindu, other

Race White, Black, Asian, Other

Nationality American, British, French, German, Italian, Japanese

Psychographic
Lower – lower class, upper – lower class, working class, middle
Social class class, upper – middle class, lower – upper class, upper – upper
class

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Lifestyle Straight, swinger, longhairs

Personality Compulsive, gregarious, authoritarian, ambitious

Behavioral
Occasions Regular occasion, special occasion

Benefits Quality, service, economy, speed

User status No user, ex-user, potential user, first-time user, regular user

Usage rate Light user, medium user, heavy user

Loyalty status None, medium, strong, absolute

Unaware, aware, informed, interested, desirous, intending to

Readiness stage
buy
Attitude toward
Enthusiastic, positive, indifferent, negative, hostile
product

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Requirement for effective segmentation:

Although there many ways to segment a market, all are not equally effective. For example,
buyers of restaurant meals could be divided into blond and brunette customers. But hair
color does not affect the purchase of restaurant meals. Furthermore, if all restaurant
customers buy the same number of meals each month, believe all restaurant meals are of
equal quality, and are willing to pay the same price, the company would not benefit form
segmenting this market.

To be useful, market segments must have the following characteristics:

 Measurability: The degree to which the segment’s size and

purchasing power can be measured. Certain segmentation variables are difficult to
measure, such as the size of the segment of teenagers who drink primarily to rebel
against their parents.

 Accessibility: The degree to which segment can be accessed and

served. One of the authors found that 20 percent of a college restaurant’s customers
were frequent patrons. However, frequent patrons lacked any common characteristic.
They included faculty, staff, and students. There was no usage difference among part-
time, full-time, or class year of the students. Although the market segment had been
identified, there was no way to access the heavy-user segment.

 Substantiality: - The degree to which segments are large or

profitable enough to serve as market. A segment should be the largest possible
homogenous group economically feasible to support a tailored marketing program. For
example, large metropolitan areas can support many different ethnic restaurants, but in
a smaller town, Thai, Vietnamese, and Moroccan food restaurants would not survive.

 Actionability: - The degree to which effective programs can be

designed for attracting and serving segments. A small airline, for example, identified
seven market segments, but its staff and budget were too small to develop separate
marketing programs for each segment.

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 MARKETING VS SELLING

Marketing
Definition Marketing is the systematic planning,
implementation and control of
business activities to bring together
buyers and sellers.
Sales
A sale a transaction between two
parties where the buyer receives goods
(tangible or intangible), services and/or
assets in exchange for money. 2) An
agreement between a buyer and seller
on the price of a security.

Approach Broader range of activities to sell Make customer demand match the
product/service, client relationship products the company currently offers.
etc.; determine future needs and has
a strategy in place to meet those
needs for the long term relationship.

Focus Overall picture to promote, distribute, Fulfill sales volume objectives

price products/services; fulfill
customer's wants and needs through
products and/or services the company
can offer.

Process Analysis of market, distribution Usually one to one

channels, competitive products and
services; Pricing strategies; Sales
tracking and market share analysis;
Budget

Scope Market research; Advertising; Sales; Once a product has been created for a
Public relations; Customer service and customer need, persuade the customer
satisfaction . to purchase the product to fulfill her
needs

Horizon Longer term Short term

Strategy Pull Push

Priority Marketing shows how to reach to the Selling is the ultimate result of
Customers and build long lasting marketing.
relationship

Identity Marketing targets the construction of Sales is the strategy of meeting needs
a brand identity so that it becomes in an opportunistic, individual method,
easily associated with need fulfillment. driven by human interaction. There's no
premise of brand identity, longevity or
continuity. It's simply the ability to
meet a need at the right time.

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