The marketing mix is a business tool used in marketing and by marketers. The marketing mix is often crucial when determining a product or brand's offer, and is often associated with the four P's: price, product, promotion, and place.
Product
A product is seen as an item that satisfies what a consumer in the target market needs or wants. It is a tangible good or an intangible service. Intangible products are service-based like products in the tourism industry, the hotel industry and the financial industry. Tangible products are those that have an independent, physical existence. Typical examples of mass-produced, tangible objects are the car and the disposable razor.
Every product is subject to a life-cycle including a growth phase, followed by a maturity phase, and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life-cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage.
The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line's depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources, and how to configure the product mix so that each product complements others. The marketer must also consider product development strategies.
Price
The price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, as it will often affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix. When setting a price, the marketer must be aware of the customer's perceived value for the product.
There are various strategies that can be applied when pricing a product like skimming and penetration pricing. Skimming means to price the product highly to increase profits. For example if you invent a new software which no one else has, you can skim the market because the customers are forced to buy from you until there is more competition. Penetration pricing can be applied when you want to enter a market and price your product lower than the perceived market price so that more people will buy it and this will increase your market share.
Promotion
Promotion represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as advertising, public relations, personal selling and sales promotion.
Advertising covers any communication that is paid for. This can be in the form of television commercials, radio and Internet advertisements or through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word-of-mouth momentum. Sales staff often play an important role in word-of-mouth and public relations.
Fedex Billboard
Billboards are a common method of promotion for advertisers.
Place
Place refers to providing the product at a place or places which is convenient for consumers to access it. Place is synonymous with distribution. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.