Implementing the Marketing Mix

What is the marketing mix?

When consumers buy a product, they are attempting to satisfy a wide range of desires. The marketing mix refers to the combination of elements within a firm’s marketing strategy which are designed to meet or influence the wants of customers in order to generate sales. It is the role of the marketing department in any organisation to co-ordinate the planning, organisation, and implementation of the marketing mix across the whole organisation.

The marketing mix of any organisation will be made up of four main components: Product, Price, Place, and Promotion.

If a firm is to be successful it must get all four elements right.

A good marketing mix will encourage customers to build up loyalty to a particular product or product range. Additionally, many firms producing items such as hi-fi and video equipment ensure repeat purchases for their products through built-in obsolescence. This means that products either last for a limited time span and then wear out, or have to be frequently updated.

Product

The product is central to the marketing mix. Consumers buy goods and services to satisfy a variety of desires. A firm must be aware of these desires if it is to operate successfully in the market. A firm is not just selling a product, but a whole concept to the consumer.

Consumer wants are always changing because of various factors – fashion, social and cultural change, growing incomes, new legal requirements, and many more. It is important that firms keep pace with changing wants and develop existing or new products that people will continue to buy.

Price

The prices of all goods and services are likely to vary over time as market conditions alter and marketing objectives change from – say – launching a new product to maximising profit from it. Three major factors influence the pricing policies of firms: costs of production, the level and strength of consumer demand, and degree of competition in supply.

Short-term objectives, such as responding to the threat of new competitors, or the need to extend the life of the product, may also affect pricing strategies.

Cost-based pricing strategies involve setting price with reference to the costs of production. Firms will normally calculate the average cost of producing each item before adding a mark-up over cost for profit. However, in the short run, a firm may price below costs, thereby sustaining a loss, in order to promote a new product or fend off competition from rival firms. The aim will be to expand sales and market share. As sales expand, the firm will be able to increase output and reduce the cost per unit. Cost savings associated with an increase in the size of a firm – for example, the ability to buy in bulk and receive discounts – are known as economies of scale.

Instead of basing price on what the product costs to produce, demand-based pricing asks the question: ‘At what price will the product sell?’ To answer this, the firm will need to look carefully at consumers’ perceptions of the worth of a product – i.e. their willingness to pay – and at the pricing policies of competitors. Only then will they be able to produce a good or service with the right design and quality to fit the market, and at the right cost to yield a profit.

Place

For the consumer to want to make a purchase the right product must be transported to the right place at the right time – otherwise the customer will not buy. It will also be necessary for a producer to hold stocks of their product to respond quickly to consumer demand.

Distribution refers to the methods by which consumers obtain products from producers. It is a significant element in a firm’s costs, and so requires careful management. The firm will need to consider physical distribution, the storage and transportation of goods and services, and the various methods and outlets through which the good or service can be sold to the consumer. These methods will include selling direct to the consumer or selling through intermediaries such as wholesalers, retail outlets, or specialist sales agents.

Дата добавления: 2015-12-08