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The Marketing Mix: Main Concepts
Read about the roles and importance of the Four P's of the Marketing Mix.
The product is the service or goods offered by a business. A successful product will meet the needs of the customers- it should offer the right combination of features, design and function to appeal to the customers that the business is aiming for (target market). A business may use market research to find out more precisely what the customers are looking for in the product. Customers are essentially looking for the benefits to them of purchasing a particular product. These benefits may be tangible- like a car that gets them from A to B, or intangible- something that enhances their status and feeling of self esteem. Many businesses will have a range of products to meet more than one need of their target market or meet the needs of several target markets.
Price is the amount that a business receives for the product. In economics, price is determined by the interaction of supply and demand, but to a business it is more complicated than that. Price must cover the cost of producing the goods, including direct (e.g. the raw materials and production costs) and indirect (all the other costs associated with running the business e.g. Head Office, managers salaries etc) costs. It must also be low enough to attract sufficient customers which may mean that it must be comparable with competitors.
Promotion is any activity aimed to raising consumer’s awareness of the product that is likely to encourage sales. A common mistake is to see it as just advertising- the ‘promotional mix’ includes many other activities such as money off coupons, sponsorship and direct selling. Essentially, it is about providing information about the product to consumers. An important aim of promotion can be to differentiate the product from others that are similar. The more that a business can persuade consumers that their product is unique, the more likely they are to pay a higher price for it, and remain loyal to it. A successfully differentiated product can be regarded as a ‘brand’.
Place is about how the product gets to the customer. This includes the place that a consumer actually buys the product- retailer, internet, mail order, and the distribution channel, i.e. how the product gets to there. It is a vital part of the mix, without the product being available to customers in the right quantity and place, the product will fail. Remember that many businesses sell to other businesses, and this will require a different distribution system to a business selling directly to the end customer.