Marketing Mix Issues - Essay Example

A. Marketing Mix Marketing mix refers to a combination of four main components of marketing that provide an integrated approach to marketing. Also known as the 4Ps pf marketing, these four elements are Product, Price, Promotion and Placement (or Distribution) (NetMBA.com, n.d.). These are explained below: Product A product is either a tangible, physical product or a service. It is critical for organisations to understand the product or services that they will sell. Some of the features of the product/ service that the organisation must carefully design and should be knowledgeable about, include market segment, product quality, brand name, support and other factors. Price The ultimate objective of all marketing efforts is to generate revenue, which depends heavily on the price of the product or service. Some of the areas that pricing must look into include cost of development/ manufacturing, profitability, wholesale and retail prices, volume discounts and target market pricing etc. Promotion The promotion deals with the communication about a company's products and/ or services, targeted to improve the product image in customers' minds. It includes personal selling, direct marketing, advertising, publicity and other forms of marketing promotion campaigns. Distribution It refers to supplying the products to customers and deals with various channels available to a company to distribute (place) its products in the target market. Other P's In addition to these 4 Ps of marketing mix, other Ps have been proposed like people, process, packaging etc. These are quickly taking over the new concept of marketing mix as being very important factors for a smooth and efficient system. B. Product Design, Development and Life Cycle New product development has become a significant source of differential advantage for companies nowadays. With the advent of modern technology, especially internet; customers are more informed of their needs and how to satisfy them. Hence, it is important for companies to consistently develop new products and improve existing ones to remain competitive. A business exist to satisfy customers while making profits (Etzel Walker Stanton, 2003, p.217) and hence it is required to identify the exact customers' needs before developing a product or service to satisfy it. The life cycle of a product consists of four stages namely, introduction, growth, maturity and decline. Product strategy varies for each of these stages and accordingly, all other strategies have to be developed to suit the requirements of a particular stage. For instance, during the introduction stage, it is unwise to manufacture a large quantity of product, but it is required during the growth and maturity stages to keep up with the demand of the product. C. Pricing Strategy Pricing decisions are affected by a variety of factors as stated above. In addition, these also depend upon the target customers. Price skimming strategy is used for innovative products by putting a very high price for the product and taking the first mover's advantage. Another strategy is to use the price penetration techniques to keep the price at a minimum in order to attract more customers. Hence, the pricing decisions vary and depend upon the market conditions. A general approach to pricing include selection of pricing objectives, determining demand of the product, estimating own costs and also the costs of competitors who are offering similar products in the market, and then the pricing method is selected (Kotler, 2003, pp. 472-485). A common method of pricing is to use a cost plus approach, where the price of the product is determined by the amount of money required to produce the product plus a margin over it (Etzel Walker Stanton, 2003, p.331). But other pricing strategies can also be used. A general objective of the pricing strategy is to gain maximum benefit while maintaining competition and the right positioning in the customers' minds about the company's products and services. Other pricing strategies include variable pricing, fixed pricing, and others. D. Distribution Management The purpose of the distribution channels is to accelerate the process through which end consumers get the products or services at a faster rate, with reliability and efficiency of operations. There are many ways a distribution network is implemented. These might include channels developed from direct producers to consumers, producers to consumers through wholesalers, retailers, and agents; or any combination. 'A middle man is a person or a company that renders services directly to the sale and purchase of a product as it flows from producers to consumers' (Etzel Walker Stanton, 2003, p.389). The purpose of the physical distribution management is to ensure that 'the product is in the right place at the right time' (Lancaster, n.d.). Many models are available to ensure that optimum quantity of the product is purchased. These include Economic Order Quantity Model (EOQ), Just in Time (JIT) delivery and others. E. Marketing Communication Marketing communication or promotion is the most important area of marketing. Marketing communication can be carried out through one or combination of the following: Personal Selling - where marketers get in contact with the potential customers and use one to one communication techniques to sell products. It is effective since each customer is given due time, yet it can result into too much wasting of time and resources Advertising - refers to print, media, out door and other forms of advertising. It has huge benefits. We are all affected by television and print advertisements in one way or the other. However, it is costly as compared to other modes of communication. Direct Marketing - it refers to internet marketing, telemarketing and all other forms of marketing where sellers can get in contact with buyers through non-public, customised messages (Kotler, 2003, p.580). Publicity - refers to public image of the company obtained through third parties. This adds to the credibility of the message since company is not involved in generating the message directly. However, publicity if results in a negative opinion, is just as effective and hence, might become a problem for the company. The elements of marketing communication include the message, the sender, the medium and the target audience. Each one of these must be analysed for maximum effectiveness. It is very important to choose the right elements of marketing communication depending upon the market conditions, customers and competitors. References Eztel, J. M., Walker, J. B., Stanton, J. W. (2003). "Marketing" (13th Edition). Ohio: McGraw Hill. Kotler, P. (2003). "Marketing Management" (11th Edition). New Jersey: Prentice Hall. Lancester, G. (n.d.). Physical Distribution Management. Retrieved June 14, 2007 from the World Wide Web: http://www.aspects.net/stephenginns/education/physicaldistribution.pdf NetMBA.com (n.d.). The Marketing Mix. Retrieved June 13, 2007 from the World Wide Web: http://www.netmba.com/marketing/mix/ Read More