The Marketing Mix is a term used to describe the combination of tactics used by businesses to achieve its objectives by marketing its services or products effectively to a specific target audience.
For many years, in marketing jargon, this was referred to as ‘the 4 Ps’ – namely; product, price, promotion and place.
The logic behind the ‘4 Ps’ is to apply a tactic that focuses on marketing the ‘right product’ to the ‘right person’ at the ‘right price’ in the ‘right place’ and at the ‘right time’.
Once you’ve identified your target audience – then the ‘4 Ps’ provide you with a simple process to follow to ensure that you’ve got your marketing proposition right. For example, let’s say we want to market umbrellas – and have decided to target schoolchildren. Given our audience it would therefore be appropriate to market:
- Coloured, cartoon character covered, small size umbrellas (product)
- At a low price (price)
- Selling them through school uniform outlets (place)
- Promoting them through point of sale / school book bags (promotion)
Let’s now say that our target audience is gentleman’s smart umbrellas
- Black, high quality, business like, oversized umbrellas (product)
- Premium price reflecting the quality (price)
- Selling them through gentleman’s clothes outlets, tailors (place)
- Promoting them through point of sale, possibly relevant trade press (promotion)
The above examples clearly show that identifying your target audience, determines how you apply the ‘4 Ps’ tactic.
So let’s look at the ‘4 Ps’ a little more closely – and then I’ll introduce some more ‘Ps’ for you to consider.
Marketing is about many things – but in its simplest explanation, it’s about identifying, anticipating and satisfying customer needs. Therefore, you need to be sure that your products and services continue to meet your customers’ needs – and perhaps even ‘delight’ them!
To keep on top of how your products and services are performing, it’s good practice to periodically carry out customer research asking your customers:
- What they think of your product/service
- How satisfied they are with the quality
- What they think of your support services (if appropriate)
- Are you meeting their needs
- What else could you be doing
Be sure to ask these questions for each service or product you provide – and have a system for collecting and analysing feedback.
I have worked with a number of businesses that do extensive customer research, find out some great product and service enhancements – but then don’t actually ‘implement’ anything in line with what the customers are saying they want.
If you are going to go to the trouble of undertaking research – be sure it has a purpose. And be sure that you are going to use the information to further enhance your products and services. It’s also really good practice to provide your customers with an update of ‘why’ you are updating, enhancing your products or services.
“Thank you to all customers that kindly participated in telling us what they thought of our A Product”. We received excellent ideas and really constructive feedback. In light of which we have developed Product A so that it now includes XYZ.”
A statement such as the above provides your customers with the open knowledge that you are ‘listening’ to their needs and ‘responding’ respectively – the mark of a truly marketing focused organisation.
Place relates to your means of distribution. Depending on whether you provide products directly to the consumer (B2C) or directly to other businesses (B2B) is likely to impact your pricing and promotion decisions.
You may be selling through wholesalers, direct to retail outlets, or direct to the consumer. If selling to wholesalers, then there are likely to be ‘mark up’ costs to cover their overheads, similarly with retail outlets. And from a promotional perspective, wholesalers and retailers will have to be persuaded to stock your products and services. It may be that you have an online presence, and may be selling directly to consumers ‘online’ – so you may be advertising with search engines and on related websites.
Price determines your profit and is therefore, a very important element of the mix. And probably the most influenced by the other elements of the mix. Place impacts price, promotion impacts price as does product.
When determining ‘price’ you need to consider:
a) Your target audience. What will they be prepared to pay for your product or service. Going back to the umbrella example above, children’s umbrellas say, £4.99 Gent’s umbrellas £9.99. There’s a clear difference between the ‘price positioning’ of these two offerings.
b) Costs. What does it cost you to produce this product or service? This is key – you don’t want to be selling a product and making a loss. Consider the margins you want to make – how many you have to sell to break-even. Map out all the costs associated with production. There are a number of hidden costs that come out of the woodwork – and if you don’t calculate what it costs you to produce your product correctly, the more you sell, the more you will lose!
c) Competitors. Look at what your competitors are charging. Go online and run a quick ‘Google’ search on the type of product or service you provide – and see the costs. Even call competitors for a price if costs are not readily displayed.
Traditionally, the promotional mix was made up as follows:
- Sales promotion
- Public relations
- Direct marketing
- Personal selling
And how you used these elements depends on your message, your reach (target audience) and of course, your budget.
Of course, there are a whole new tranche of ‘promotional’ elements to consider now too. I refer to these as ‘Social Media’ – and whilst one could argue that these fall into the ‘Advertising’ or ‘PR’ categories, I prefer to outline some of the popular ‘online’ angles for you to consider:
- Blogs / forums
- Email marketing
- Social Networks
- Search Advertising
3 More Ps
The ‘4 Ps’ have provided a tried and tested tactic for marketers over the years. However, in the late 70s – came the rise of the ‘service’ organisation. Marketers then developed the ‘4 Ps’ further to create ‘7 Ps’ – including, People, Process and Physical Evidence.
You can clearly understand that in a service organisation – people determine the quality of service your customers receive. Where people are the front line communicators, it’s important that they are happy, skilled and motivated. A happy team makes for happy customers.
Indeed, in a saturated and competitive market place, service is usually the only means for an organisation to differentiate itself. Think of Apple. Their service level is amazing. Ok, they have good products too – but so indeed do Dell. However, from my experience of being both a MAC user and a PC user – from my perspective, Dell doesn’t come close to Apple’s service levels.
And of course, the level of service you provide can often mean that you can charge a more premium price. Customers are likely to pay more for excellent service levels.
So here are some tips for creating a happy, skilled and motivated team:
- Recruit wisely. Be transparent with the level of service you expect from your team at the interview process. Recruit those that are enthusiastic, motivated and that you can see have a clear understanding of how important their role in keeping customers happy is.
- Train your team. Provide a good induction to your products and services – ensure that your team member understands what it is you do, what you offer and who does what within the organisation.
- Look after your team. Nurture them, get them involved. In fact, get them to set some service standards; key measurements that they want to be assessed against. These Key Performance Indicators – are then something that you can measure and monitor and discuss with your team on a regular basis.
The processes involved in delivering your products and services to the customer have an impact on the way in which your customers perceive you.
Be sure that you map out these processes to ensure they are logical and not causing unnecessary delay or inconvenience for the customer.
Consider how you communicate with your customers and how easy it is for them to communicate with you. I recently worked with a business (and they are not alone in this practice) that sent post transaction confirmation emails from the customer support team from a ‘no reply’ email address. The email was asking the customer to contact them if they had any challenges etc – yet had no contact details within it – and the customer couldn’t just simply reply to the email.
My question to them was ‘how does that look to the customer’? You’re communicating with them, yet giving them no means to respond. Getting your customers to communicate with you should be simple and easy.
My advice is to review your business processes on a regular basis. Review how things are working and look at ways to ‘tighten up’ any gaps.
Re-engineer your processes to keep a pace with the business environment. Be sure to check that the way you deliver your products and services is the most efficient, cost effective and customer centric way possible.
Physical evidence is the term used to describe the image that your business portrays to the external environment in a physical way. Namely; premises, team appearance, car park, vehicles, reception area etc, effectively, how you position your business.
When customers do not have anything that they can touch, see or try before they buy, they are more likely to assess you by the image and associations you portray.
I personally explain ‘physical evidence’ as part of an organisations ‘brand values’. What is communicated physically, says everything about the brand – and therefore, your business. Customers are building a mental picture which they will retain from the moment they are introduced to your business. So it’s important that your physical evidence is consistent with the type of product or service you provide.