As a business, you can either learn the basics of marketing by self or can always take a consultation from the marketing expert. The choice is yours!
The Biggest Problem With Marketing Mix And How You Can Fix It
Out of many models of marketing, if you ask me personally, I have always loved Marketing Mix. This model is highly unrated and ignored by many startups and small-mid scale businesses.
Even if any business is using this model in strategy building, the biggest problem with the marketing mix is in its execution. If used smartly, this can surely solve many marketing problems of the company.
What is Marketing Mix?
Its a combination of factors that can be controlled by a company to influence consumers to purchase its products according to the Oxford dictionary.
The marketing mix is the combination of certain elements considering your target market. If you have no idea about your target market then you can not define your Marketing mix well. There are basic 4 elements that have extended to 7 and now in modern marketing to 21. Many call it 4 Ps of Marketing or 7 Ps of Marketing. Even if you are not focusing on all the 7 Ps of marketing, you must consider 4 Ps.
What are the Marketing Mix issues that most of the businesses face?
Businesses ignore considering Marketing Mix to grow. Mainly, the Marketing Mix problem arises because of negligence. Jumping directly on media selection to advertise is never a good idea.
It is a good idea to go through 2 things before doing media planning. First, understand the product’s current market position, and second, define the product’s position in its life cycle.
What is the Product Life Cycle (PLC)?
Product Life Cycle or PLC is the journey from start to the end of any product in the market. Just like humans, the product takes birth and die after a few years. Just like Marketing Mix, businesses should consider the PLC for their every individual product.
Product Life Cycle Bell Curve Graph. Sales v/s Time
Any product passes from the 4 phases of sales as time goes. The phases are introduction, growth, maturity, and decline. After the decline phase, if the product is taken off from the market by the company then it is known as End of Life (EOL).
There is a seriously strong connection between Marketing Mix and PLC. To keep it simple, a marketer must understand that as the phases of PLC changes, the decision regarding the 4 Ps also changes. To get the connection right, let us see 4 Ps in detail:
What are the 4 Ps of Marketing Mix?
The word marketing mix was first coined by E. Jerome McCarthy in the 1960s. Since then the concept is taught in all the business schools worldwide. The 4 Ps stand for Product, Price, Place, and Promotion.
1.Product: Product is an item that is created in an organization to fulfill the demand of the consumers. It can be intangible or tangible – i.e. service or goods.
The decision of product depends on many things like brand name, functionality, product styling, quality, safety, repair, support, after-sales service, packaging, etc.
The decision of the product also depends on what your customer wants from you. Different parameters of product change according to the phase of the PLC.
E.g. at the introduction phase, a company mostly launch limited versions of the product just to check the adaptability in the market. At the introduction stage only, the number of service centers for after-sales service can be very high or very limited.
2. Price: Price of the product is the amount customer is paying to buy it. Just like a product, price is also very important to understand the Marketing Mix definition.
Major elements of price are pricing strategy (model), retail price, wholesale price, discounts offered, seasonal pricing, bundling pricing, price flexibility, price discrimination, etc.
The decision of price depends on PLC too. A product during its journey goes through various prices. E.g. at the introduction stage most companies launch their product at penetration price or skimming price.
Penetration price is to launch the product at a lesser price compared to the competitor’s product. Skimming price is to launch the product at a higher price and after some time the company reduces the price. Skimming price works well for electronic gadgets like smartphones.
It gives an advantage to the company as the early adopters buy the product at the very initial stage even at a higher price.
3. Place: This P is all about placement and distribution of the product in the market. The place also suggests the Point of Sale of the product. A business has to make sure that the availability of the product should be easy for the customers.
Major elements of place are distribution channels, market coverage, inventory, warehousing, order processing, transportation, etc.
Market coverage can be intensive, selective or exclusive. E.g. cigarettes have intensive coverage, Smartphones selling have selective coverage in a city and luxurious cars like Mercedez Benz has exclusive coverage.
In connection with the PLC, a company may start selling the product (POS) from selected places at the introduction stage and then increase the places of the sale in the growth stage.
4. Promotion: If a business doesn’t do promotion, it can never generate profit! Marketing is what we call this particular P of 4 Ps. And now, we have added another platform of marketing to grow the business that is Digital Marketing!
Promotion is comprised of elements like advertising, sales promotion, personal selling, public relation, publicity, etc.
The various phases of PLC give the different meaning of promotion. The advertising activity is extensive at the introduction stage and comes to selective channels in the maturity stage.
Sales promotion also varies at different stages. The budget of the overall advertising also gets affected. At the decline stage, a business dedicates almost nil budget for advertising. It becomes very crucial to work with the advertising or marketing agency that understands the connection of stages of PLC and Promotion.
This is how Marketing Mix works in tandem with PLC. Most of the businesses make the mistake by not considering PLC with Marketing Mix.
This mistake costs the business with poor overall result. Watch this video to summarize the 4 Ps and PLC:
Marketing is fun if understood well! Spending money without clear fundamentals of marketing can affect the final outcome.