Marekting Mix

Marketing Mix

The marketing mix is “the controllable variables the company puts together to satisfy the target market” (Perreault and McCarthy, 2004). The target market is the group of customers the company wants to attract or appeal to with the service or product. The marketing mix includes four elements called the four P's of marketing: product, place, price and promotion. These four elements work together to produce a profit. Changing any one of the four will affect the results of the other three. The marketer uses the marketing mix to develop the marketing strategy; thus, determining the marketing mix is an important first step in the process. “It takes proper coordination, planning and use of each of these elements to reach the consumers in one's target market”. (Lake, 2006).

Product

The first element in the four P's is product. Product is the “good or service for the target's needs” (Perreault, 2004). In marketing, product is not simply the physical item or service. Product refers to the features, benefits, quality, accessories, installation, instructions, warranty, packaging and branding as well as the physical good service or product lines. These variables can affect the end product and be a means to create differentiation if necessary. If a customer has the choice between two similar products, the marketer can offer qualities such as a better warranty, return policy or maintenance service to persuade the customer to purchase the product or service.

Place

In determining placement, the market will need to analyze not on location of the customer but also how to get the product or service to the customer. Globalization and technology have changed the face of marketing. One major shift has been the use of the internet for advertising and shopping. Consumers from around the world now have access to products that were formerly not available. When referring to place, issues such as middlemen, shipping and storage will also be addressed where before primarily the issue was transportation of the product.

Price

Price is the amount of money charged for an item or service. For this element in the marketing mix, the marketer must develop a pricing strategy. Some examples of issues to consider are cost for production, competition and how much the customer is willing to pay. The business offering the product or service can not afford to sell the item for less than it is produced for. The competition may be able to provide the same product to the customer at a lower price. At the same time, the consumer is not going to pay more than he or she feels the product is worth. Sometimes the roles of each issue are reversed. In the case of a new product or technology, customers are willing to pay a higher price to acquire the item if the item increases their worth or the worth of their own product. Three pricing strategies can be used once the customer base has been identified. Competitive pricing will be selling the product at the lowest price when compared to the competitors. Cost plus profit pricing is determining price based on a calculation of how much the company needs to show in profits in addition to the cost of production. Value pricing is basing the cost on how much value the company, as the producer, delivers to the customer.

Promotion

The final element in the marketing mix is promotion. “Telling the target market or others in the channel of distribution about the right product” (Perreault and McCarthy, 2002). This element deals with attracting new customers and retaining current customers. The primary purpose is to affect customer behavior in order to make the sale. Three forms of promotion include advertisement, public relations and sales. Advertisement can be achieved in through many forms such as television and radio commercials, internet pop-ups, billboards or newspaper advertisements. Determining where the target audience and frequency is a key part of advertisement. According to the AMA, an individual must be exposed to a message seven times before the individual becomes aware of the message. These two aspects can be determined through the use of the Reach percentage which, in turn, gives gross rating point (GRP). Reach is “the number of different persons or households exposed to a particular advertising media vehicle or a media schedule during a specified period of time. It is also called cumulative audience, cumulative reach, net audience, net reach, net unduplicated audience, or unduplicated audience. Reach is often presented as a percentage of the total number of persons in a specified audience or target market” (AMA, 2007). The GRP is “A measure of the total amount of the advertising exposures produced