Done Masters of Business Administration in Marketing from Australian Graduate School of Management [AGSM].
Introduction about Marketing Mix
To market products, every company needs to devise a successful mix of launching the right product at the right price, at the right place through right promotional strategies. The same is applicable to Coca-Cola as well. Due to its high brand equity in the market, it has emerged as a top-ranked company of the world. Like all other companies, Coca-Cola has also witnessed few vicissitudes and throughout the journey, this multinational beverage corporation has changed its marketing mix several times and added more products to its list of offerings. Today, overall it has 3300 products.
What is Marketing Mix?
Marketing mix refers to one of the most popular frameworks in marketing that is used by companies in order to make its marketing or marketing-related decisions more effective. According to theorist Schramm-Klein (2007), marketing mix is regarded as one of the fundamental concepts in marketing and focuses on four aspects of business practice: Product, Price, Promotion and Place. However, the practical usage of marketing mix by the companies depends on the size of the company, chosen business marketing strategies, the benefit of geographical location, competitive edge and range of other factors. Nowadays, marketing mix considers one more ‘P’ as a vital mix element that is People.
Note: All the Ps are inter-related. A change in the decision in one of the factors affects the rest. For instance, a company if its wants to launch a low-priced product, the promotion cannot use the same channels where premium products are sold. The company has to design a new promotional strategy for the target audience.
Evolution of Marketing Mix
In 1964, Neil H. Borden first coined the term ‘Marketing Mix’ in his published article ‘The Concepts of Marketing Mix’. Borden explained in this published article that how he began using this term in the late 1940s after James Culliton portrayed marketing as the ‘mix of ingredients’. The elements in Borden’s theory included,
- Distribution channels
- Personal selling
- Promotions and advertising
- Packaging and display
- Physical handling
- Fact finding analysis
In 1961, suggestions were made by Frey to categorize these elements into two different groups: offering (which included product, packaging, brand, price and services) and methods and tools (involving distribution channels, personal selling, advertising, sales promotion and publicity).
Later, these ingredients were re-grouped by E. Jerome McCarthy into four vital elements which are now referred to as ‘4Ps of marketing’. Most of the theoretical and practical researches focusing on the various components of marketing mix are based on this specific classification of the marketing mix.
However, the number of ‘P’ increased with another theorist Judd (1987) who introduced the fifth element in ‘4Ps’ of marketing (People). Now 5Ps of marketing is considered while devising the marketing strategies rather than 4Ps of marketing. The addition of another ‘P’ (People) in marketing mix, however, faced a wide range of criticism recently due to the inability of the companies in establishing Customer relationship (assuming that the customers have passive influence).
The 5Ps of Marketing Mix
A product or service is offered to the target group of people in order to fulfill their certain demands – what exactly the company is selling to its consumers? The products are divided into two categories, tangible products (that is physical products like cars, food items computers etc.) and intangible products (that have value but have no physical touch such as digitized content). It is, therefore, a complete bundle of advantages or satisfaction that buyers get after purchasing the products and services. It combines all types of physical, psychological, symbolic and service attributes, not just physical products. The company must ensure that they are selling the right type of product that is in demand in the market.
For example - If a jewelry-maker wants to grow his business, he should give free gift wrapping service to its customers or some special discounts.
It refers to the pricing policies for the consumers. A major consideration in pricing includes the overall cost of the product, including the advertised price, any discounts given on the product, sales, credit terms, consumer buying capacity and other payment agreements.
For example - If you are promoting your car saying, ‘Budget car rental services’, your pricing policies should reflect that.
It is the place where you deliver and distribute your products. If you are targeting the elite class of the society, the products should be available in selected stores exclusively for a certain group of people. Similarly, if the product is a consumer product, it should be available as far as the promotion can reach.
For example - A company setting up a home decor business must target opening its stores in residential areas.
Promotion is communicating about the product to the company’s potential consumers. It refers to the activities and methods the companies use to promote its business. It mainly comprises various elements, sales organization, public relations, advertising and sales promotion. If the product is completely new in the market, it needs ‘brand positioning’ promotion, whereas if the product is already existent, the consumer needs ‘brand recall’ promotion.
For example - If you want to promote your sports management business, you might want to add sponsorship to your marketing mix to promote your business.
It refers to company’s staff and clients who are consuming the goods or services. This comprises customer level services as well effective communication and training of the company staff.
For example - If you are planning to introduce an online portal, you need to consider how your staff uses the internet and whether your consumers would feel comfortable buying products online and paying for shipping charges.
Controllable and Uncontrollable Factors in Marketing
A well-researched marketing plan requires a long time to develop, after taking into account several factors. Many factors that affect marketing plan are completely out of your control; few can be controlled but rest is completely out of control.
The controllable factors are commonly known as the ‘marketing mix’ that includes product, price, place, promotion and people.
- The economy: An organization cannot control the comprehensive economic environment of an entire region
- Legislation: A change in state and federal law can significantly affect the marketing plans
- Natural Disasters: Small to big businesses arrange emergency fund/backup place in case of natural disasters, but a broad-reaching disaster can affect the company’s marketing plans
- Suppliers: If your suppliers raise their prices and run out of material, it can significantly affect your marketing plans.
A marketing plan comprises the marketing strategies that a business intends to bring into practice. The primary function of the marketing plan is to make everyone aware of what your business plan is and how you propose to make it happen. Creating a marketing plan is significant for success as business always thrives on human relationships. The marketing plan is used to drop a sales line to the customers. The plan defines the activities involved in achieving specific marketing objectives within the specified time limit. It starts with the identification of the customers’ requirements, followed by the firm’s intention to fulfill the goals while ensuring an acceptable level of return. Large companies have a hundred-page marketing plan, while small organizations remain satisfied with a half-a-dozen sheet.
The marketing plan mainly covers one functioning year of the business. The business further segregates itself into three parts or more to refer to the plan at least quarterly. It is, however, recommended to follow the plan monthly and keep track of the performance as the business grows. Any marketing plan in any set-up requires people’s involvement and feedback, and that’s how a company takes all aspects of the business and makes the marketing plan work.
Marketing analysis refers to the method used for determining whether the current market is expedient for making an investment. In simple words, it is mainly a study of the market dynamics that provides information regarding the business that you are operating. It carries simple information like market size (current and future) which may assist you in deciding whether the market is worth investing in. The analysis is done to understand the evolving opportunities and threats in the market in relation to the strengths and weakness of certain firm or organization. A popular form of this is SWOT Analysis which tests the Strengths, Weaknesses, Opportunities and Threats of a company.
The business or organization (big or small) further by assessing the numerical data and the movement of prices in the specific industry formulates strategies and determines probable future movement based on the data. While creating a marketing analysis, an organization takes few dimensions into account which are: market size, market trends, growth rate of the market, market profitability, key success factors, distribution channels and industry cost structure. These dimensions assist any organization to scrutinize the market in a better manner.
4Ps of Marketing
The term marketing mix, popularly known as 4Ps of Marketing, was first coined by Neil Borden in 1953, and is still used today as a significant business tool by the marketers. This research method is mainly employed to ensure that the right product is in the right place at the right price at the right time. It is a crucial tool to help the marketers understand what products and services can satisfy the customers’ requirements and how they should plan for a successful product offering.
The model of the marketing mix is employed through 4Ps of marketing: Price, Product, Promotion and Place. However, it requires a lot of research work to get into the details of what the customer require and the places they prefer to shop, etc. After collecting all the details, the researcher needs to shift focus on producing the item at a price that adds value to the profits. The researcher needs to handle each variable with care; otherwise, the whole research can be nullified. Mostly, marketing students use this marketing tool while conducting case studies on various companies.
7Ps of Marketing
Marketing is a continually evolving discipline that gives exposure to researchers to add changes to the existing study. The 7Ps of Marketing is one of the significant examples of this evolution in marketing discipline. After the first use of the term marketing mix (which defines 4Ps of Marketing) by Neil Borden, this marketing theory evolved over time with the increased use of technology. In the late 70s, a group of marketers felt the need for changes in marketing mix theory that led them to the creation of an extended version of marketing mix (7Ps of Marketing).
Bernard H. Booms and Mary J. Bitner added three new elements: People, Process and Physical Evidence to Jerome McCarthy’s traditional marketing mix (4Ps of marketing: Product, Place, Price and Promotion). While McCarthy defined only four variables of marketing, the extended version of marketing mix (7Ps of marketing) describes the extended marketing services that can be delivered in knowledge intensive environments. To be successful in business, the marketer should take every aspect of marketing into account and develop further marketing planning.
7Cs of Marketing
In the 90s, Robert Lauterborn revamped the model of 4Ps in order to make it more consumer-oriented and introduced 4Cs of marketing — Consumer, Cost, Convenience and Communication — as a new marketing theory. It proved to fit into the movement from mass marketing to niche marketing. In the consumer-oriented market, Product is referred to as Consumer, Price becomes Cost, Place becomes Convenience and Promotion is described as Communication.
With further research, the 4Cs of marketing expanded to 7Cs of Marketing, adding three new elements: Caring, Coordination and Confirmation. The 7Cs Compass Model is used for co-marketing. But this model faced a lot of criticism for being identical to 4Ps of marketing. This model is further criticized as being in the interest of the target-audience rather than deciding the tactics for marketing. Despite the criticism, this model is, however, used extensively while including numerous strategies for product development, distribution and pricing.
Marketing Mix Assignment:
The marketing mix comprises four elements that need to be taken into account while launching any new product or services. These variables are also known as 4Ps of marketing. If anyone wants to conduct extensive research on the certain market section, he/she can use 7Ps of marketing instead of 4Ps of marketing. If the marketer is targeting consumer-oriented market, one has to take 7Cs of marketing into consideration and devise plans based on the collected data. Marketing students, who are pursuing MBA degrees or any business degrees, are often asked to write a critical academic piece while employing marketing mix model. These are known as marketing mix assignment.
The writer is responsible for formulating effective marketing plans on behalf of certain organization while putting their own recommendations. Assignments written on complex marketing theories like marketing mix carry a great amount of significance on their course module. Students have to be diligent while composing critical tasks like marketing mix assignment or they can easily ruin their chances of getting the expected grades.