Explains the definition of marketing mix and outlines the 5 Ps of marketing: Product, Price, Place, Promotion and People, which make up the components of the marketing mix.
Definition of marketing mix
The coordination of the individual marketing instruments is coordinated in what is known as the marketing mix. In particular, the market situation and the product life cycle of the advertised product are taken into account. A well-structured marketing mix covers all marketing areas and bundles the possible marketing activities. The formulation of clear goals and the use of a well-put together marketing mix transform planned actions and tactics into concrete actions and targeted measures.
The marketing mix is a popular and widely used marketing tool that was introduced by Jerome McCarthy in the 1960s. Basically, individual marketing tools are combined to achieve specific goals. By bundling various marketing activities, the providers want to address the needs of the target group in a targeted manner and increase customer satisfaction.
As a company, you will always wonder how you can sell your products or services. The definition of marketing mix will help you with this. This describes the coordination of various marketing activities in order to implement a company’s marketing strategies and to target customers in a targeted manner.
Definition of marketing mix: The 5 Ps of marketing
The classic theory distinguishes between five different instruments (the 5Ps ): Product, Price, Place, Promotion and People. In summary, the 5 Ps of marketing are:
- Product Policy – Product policy includes aspects such as product design, style, quality, packaging, size, brand name, product line planning, service and warranties
- Price policy – pricing , discounts, bonuses, payment, delivery and credit terms
- Place (Distribution) policy – locations, exterior and interior design, warehousing, transport options, sales channels and intermediaries
- Promotion (Communication Policy) – Advertising, personal sales, sales promotion, trade shows, sponsorship, events and PR are part of the communication policy
- People (Personnel policy) – personnel capacity, qualification of personnel, training needs, employee motivation
Product (product policy)
The product polic , the most important of the four pillars of the marketing mix . Under this category fall all the necessary decisions that the goods and services directly affect them. The product itself is the essential core for a company and should be designed to meet the needs of the customer. It is not only the technical features such as the shape or size of the product that are important. Branding decisions are also an important aspect.
- Which product or range do I offer my target group? Do I make use of product variation or product differentiation ?
- Which product can I remove from my range?
- What properties should my product have (design, quality, packaging)?
- What services and services relating to the product do I offer the customer?
Price (price policy)
When it comes to pricing policy , providers consider what price they will charge for their goods or services . In the design of the price with different aspects as incurred must cost , demand of target groups and competitors are considered. The selling price must by customers accepted be, but still competitive remain.
The goal, of course, the profits to maximize . If a company wants to enter an overloaded sales market, it has to offer its goods at a low price (= low price strategy ) . However, if customers are willing to pay a lot, the product can be sold at a higher price (= high price strategy ) . But that doesn’t just cover the price aspect. Decisions and pricing policy measures regarding discounts (e.g. price bundling ), payment terms and financing options must also be made in a pricing strategy.
- What price do I ask for my product?
- Do I offer discounts ?
- Which payment terms do I choose?
Place (distribution policy)
The distribution policy , the question arises how the product or service is best for end users reached. All decisions and activities that affect the route or logistics fall under this point of the marketing mix .
- Which distribution channel (direct or indirect) do I choose?
- Which sales channels (e.g. own business, internet, franchising ) do I use?
- Do I cooperate with a sales partner (e.g. wholesaler) and hand over the sales to him?
Promotion (communication policy)
The point Promotion consists more specifically at how property or services best presents are such as through traditional advertising or social media marketing . A company must make the target group aware of the fact that its products exist through sales promotions .
This pillar of the marketing mix aims to formulate a particularly attractive offer that the customer cannot resist. If the right information is conveyed, your own product distinguishes itself from the competition and stands out, it is more likely to be remembered by the end user. The aim of the communication policy is that the customer chooses the product and is satisfied . You want to gain the customer’s trust through the right communication channels and bind them to the company in the long term .
- Which communication channel do I choose?
- Do I do traditional advertising via TV spots, radio or print media?
- Do I want to be present on social media channels ?
- Do I make use of direct marketing (e.g. writing to specific customers)?
- Do I address my customers through sponsorship ?
- Do I present my product at a trade fair ?
People (personnel policy)
The 5th P “People” has taken on a key role in the increasing competition for the differentiation and unique position of products and services. Until a few years ago, consumer goods marketing was at the heart of all marketing activities. But now the focus is on long-term service marketing. The fifth “P” is the key to success, especially in the service sector.
Employees are of central importance to companies. In the world of SMBs especially, people are often the only thing that sets companies apart from the competition.
Social and economic processes are basically inseparable. If employees are satisfied , there is no question that this has an impact on the company:
- increased productivity and higher performance
- more creative results in development and research
- decreasing operating costs
This makes it possible to react faster and more efficiently to changes in the market . A high level of employee satisfaction is also reflected in the low number of absenteeism and sick days.
In addition, satisfied employees will happily remain with their company. This avoids employee fluctuation and you are able to retain highly qualified employees in your company in the long term.
Have I employed people who have the necessary skills and training for their roles?
Do they believe in the business’s goals?
Are the employees engaged with the company?
How do I continue to foster that engagement?
Why is a marketing mix important?
A well-structured marketing mix bundles the planned activities and measures appropriately. It covers all areas of marketing in order to effectively address a specific group of customers and to bind them to the company as long as possible. The more clearly the intended goals are defined in advance, the better the associated marketing activities can take hold. It is therefore of great importance to invest a lot of thought and tactics in the run-up to the coordination of the measures in order to optimally coordinate product placement, marketing and sales with a broad and far-reaching marketing mix and to use them successfully. By addressing customers, the marketing mix thus directly influences the company’s sales and earnings.
How does a marketing mix work?
Detailed advance planning is essential for an optimal marketing mix. At the beginning there is the collection of notes for each of the P areas listed above. Through consultation and discussion, the planned measures of the individual segments can be merged in the planning in an optimizing manner and effectively implemented. For this purpose, communication should take place in both small and large circles in order to achieve and bundle the broadest possible stream of ideas.