Components of marketing mix

Marketing mix is a very famous marketing term in now days. The term marketing mix become popular after Neil H. Borden published his article “The Concept Of Marketing Mix” in 1964. Borden is a teacher and start using this term in his teaching in late 1940’s after James Culliton had described the marketing manager as a “Mixer Of Ingredients”. The ingredients included in Borden’s marketing mix are product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. Later E. Jerome McCarthy grouped these ingredients into four categories that today are known as 4 P’s of marketing listed below.

Product

Price

Place

Promotion

These four P’s are the parameters for the marketing managers. By using these parameters the marketing managers can make different decisions.

Product

Product term refers to tangible or physical products. If an organization wants to be successful in the market then the organization must come in market with a product, which satisfies the customer’s needs. Followings are some factors, which must be, consider by marketing manager before making any decision.

Brand name

Brand name plays an important role in raising the sales of the product. Organization should come in the market with a different and unique brand name.

Styling

Style of the product also plays an important role in sale of the product. Organization should launch the product with different and attracting style.

Quality

Quality of the product also matters and affects the sale of the product. Quality of the product should be good as compare to the existing products.

Packing

Packing of the product also attracts the customers. To increase the sale of the product, organization should come with improved and attractive packing.

After Sale Support And Service

To attract the customers organizations must provide the after sale support and services.

Price

Price is an important component of marketing mix. This is very sensitive part because it’s very difficult to know at which price we launch our product. To maximize the organization’s profit it’s very important to fix a price, which is suitable for the customers. Marketing managers must consider the following factors.

Pricing strategy

Decision about pricing of the product is very important. For this purpose different pricing strategies are available such as price skimming, price penetration, cost plus pricing etc. organization must launch their product at the price which is acceptable by the target market to maximize the profit of the organization.

Volume discount and wholesale pricing

Organization should offer some volume discount and offer different price to the wholesale customers to increase sale of the product.

Cash and early payment discounts

Organization must offer some cash discount to the customers to maximize its profit. And also offer some early payment discounts to minimize the amount of bad debts.

Place

Under this head the marketing manager decide at which place he launch his product and which market he is going to cover. Following factors must be considered by marketing manager before launching any product.

Different distribution channels

Selection of distribution channel is very important for the organization. In now day’s customers have different option because competition is very high and substitutes are available in the market. Organization has to select the right distribution channel which confirms that the product is available for the customers on time when they need that product.

Area coverage

Selection of area is also very difficult for the organization. Organization must need to select the right area for the launch of the product where customer demand is high for that product.

Transportation

While making decision about the place, organization must check the availability of the transportation that will make the product to get over there as well as customers.

Promotion

Promotion means how to promote the product by using different means of marketing tools. Marketing manager must consider following factors.

Promotional strategy

Organization must make promotion strategy to promote their product among different people belongs to different areas.

Advertising

In now days advertising play an important role in success of any product. Organization must make different polices for advertising. There are many advertising channels available i.e. T.V., newspaper, leaflets, radio, sign boards etc.

Marketing communication budgets

Making realistic budgets is very important. Company must have enough capital to spend on its product’s promotion.

Importance Of SWOT Analysis In A Marketing Plan

SWOT analysis is a marketing audit tool with which we know about the internal and external position of the organization. In now days it’s very important for an organization that the organization must understand his current market position and his competitor’s position as well. To be a market leader it’s necessary to evaluate yourself and your competitors on regular basis.

SWOT stands for Strength, Weakness, Opportunity and Threat. Strength and Weakness are considered to be internal factors; Opportunity and Threat are considered to be external factors.

Strengths are consider that areas where your organization is performing well. For different organizations different factors are considered as Strength i.e. marketing expertise, a new service or product launched, good capital availability, hard working and sincere personals, goodwill, strong brand name etc. strengths are its resources and capabilities that can be used for building a competitive edge.

Weakness is the areas where the organization does not perform well and need more attention on these areas. For different organization different factor are considered as weaknesses i.e. low market share, lack of experience, bad reputation, price of product, poor quality etc.

Opportunity is an external factor where the organization looks at different opportunities available for the organization. Opportunities can be a developing market, new international market, removal of international trade barriers, increase customer’s demand etc.

Threat is also an external factor. Threats can be some changer in external factors or environment that can adversely affect the business. Threats for an organization can be new regulations, increase or decrease exchange rate, alternative products and services, increased trade tariffs, price wars etc.

A marketing plan gives us the key elements of the organization’s marketing strategy, which flow from organization’s long-term plans. If an organization perform SWOT analysis on regular basis then the organization know his market position and his competitor’s market position and they know the customers taste, current fashion, they know at which price customers accept their product and services, what is the product life cycle etc. By using this information the organization take right decision about their products and services.

Marketing Segmentation

Marketing segmentation is the identification of portions of the market that are different from one another. Segmentation allows the organization to better satisfy the needs of its potential customers.

There are two types of markets.

Consumer’s market

Industrial market

Bases For Segmentation In Consumer Market

Following are some characteristics on which the consumer’s market can be segmented.

Geographic

Demographic

Psychographic

Behavioralistic

Geographic Segmentation

In geographic segmentation, market is divided on the bases of geographical locations. Following are some examples of geographic segmentation.

Region: Market is segmented by country, continent, neighborhood, state etc.

Size of metropolitan area: Market is segmented according to size of population.

Population density: Market is segmented by on the bases of urban, suburban, rural etc.

Climate: Market is segmented according to weather patterns common to certain regions.

Demographic Segmentation

Some markets are segmented on the bases of demography. Following are some demographic segmentation variables.

Age

Gender

Family size

Income

Occupation

Nationality

Religion

Clothing industry is the best example of demographic segmentation; women cloths are different from men cloths and also available for people belong to different age groups and different religions.

Psychographic Segmentation

Sometimes market is segmented on the bases of customer’s lifestyle, activities, interests etc. this kind of segmentation is called psychographic segmentation. Following are some psychographic segmentation variables.

Interests

Attitude

Activities

Values

Opinion

Behavioral Segmentation

Sometimes markets are segmented on the bases of customer behavior towards products. In now days customers wants the best product which gives maximum benefits at low cost. Some behavioral segmentation variables are listed below.

Usage rate

Ready to buy

Brand loyalty

Benefits

Bases For Segmentation In Industrial Market

Following are some characteristics on which the industrial market can be segmented.

Industry type

Location

Behavioral characteristics

Industry Type

Some industries are segmented on the bases of industry type. Following are some variables according to which the industrial markets are segmented.

Industry

Purchasing criteria

Industry size

Decision making units

Location

Sometimes in industrial market customer location is important. In some industries firms tend to group together geographically, due to this their needs may be similar within region.

Behavioral Characteristics

Sometimes in industrial markets purchasing patterns can be a base of segmentation. Following are some characteristics of behavioral segmentation.

Buying status

Using rate

Purchasing procedures

Why Does Market Segmentation Matter

For success of any business, an important role is played by market segmentation. Following are some points which shows the “Why does market segmentation matter”

Maximize Profit

Every customer has different income level. Therefore they have different spending power. By market segmentation business can average price and increase profit.

More Opportunities

By marketing segmentation business can increase his sale. Due to increase in sales, organization has more resources to expand business.

Customer Retention

By marketing segmentation organization know about the needs of the customers. They can come with product which fulfills the needs of the customers need. By satisfying the customers need the organization can retain their customers.

Increase Market Share

Organization can increase market share because organization knows that which product is popular in current market and also knows the current fashion and taste of the customers. To increase his market share the organization launch the product according to needs of the customers.

Know Customers Need

Customers belongs to different segments have different needs. Due to market segmentation organization make different offers to different group of customers according to their needs.

Marketing Research

Marketing research is a system and its main objective is to recognize, group, study and use of that information to enhance the sales of product and services of the organization. Normally two main types of marketing researches are used.

Research for identification of problems: In this kind of research the organization tries to find out the problems which are hurdles in sales of the products and services.

Research for solving the problems: In this kind of research the organization tries to solve those problems.

How Market Research Help In Selling A Product Or Service

Important role is played by market research in sales of any product or services. Through market research an organization knows about the problems and opportunities for product or service. By conducting market research the organization know that what is the requirement of the customers and then the organization tries to fulfill the needs of the customers. Through market research the organization is also enable to identify the strategies of their competitors, then the organization is in a better position to make a better strategy. Following are some points which can be identify with the help of market research.

Better Marketing Strategy

The organization is enable to collect information from customers by conducting market research and also knows the requirements of the customers which help to make better marketing strategies for its product or services.

Current Issues

By using research information the organization is enable to identify the current market issues facing by the similar products and services. By using research information the organization can overcome these issues and can launch their product according to these issues.

Opportunities available

By conducting market research organization is in the position to know what are the opportunities available in the market for their product and service?

Decision making

Market research plays an important role in improving decision making process. Market research helps the organization to develop marketing plan and make decisions according to new marketing plan.

Economic Condition

This is very important to know about the economic condition of the country. By using marketing research organization knows the current economic condition of the country.

Primary Research

In primary research the organization collect original data directly about the product and market. It is designed to answer specific questions of interest to the business. It’s compulsory for the organization to carry out field research to collect primary research. Following are main methods of field research.

Face To Face Interviews

Telephone Interviews

Online Surveys

Questionnaires

Focus Groups And Consumer Panels

Advantages Of Primary Research

Following are some advantages of primary research.

Specific

The main advantage of the primary research is that the user gets answer according to their requirements.

Up To Date

Information collected by using primary research is up to the date and latest.

Reliability

Information collected by primary research is reliable because it is collected directly by the main user of the information.

Time saving

The information is collected very quickly in case of telephone interviews. The organization saves its time and makes decision more quickly.

Disadvantages Of Primary Research

Following are some disadvantages of primary research.

Expensive

Primary research is very expensive method because in primary research we need to go to meet many people to collect the information.

Time Taking

In primary research the user needs to meet too many people to collect the information that’s why its very time taking process.

Mis-leading Results

Primary research may provide mis-leading results if the sample size is not large enough or the questions of the questionnaire are not right.

Secondary Research

In secondary research the user of the information cannot collect data directly. It is already collected for any different purpose by another person. In secondary research information is collected different sources which are listed below.

Commercial Market Research Organization

The Government

Competitors

Trade Publications

The General Media

Articles

Organizational Records

Advantages Of Secondary Research

Followings are some advantages of secondary research.

Time Saving

Secondary research is time saving method of collecting information because the information is already collected by someone else.

Economical

The information is already collected by another person that’s why its very economical method of collecting information.

Disadvantages Of Secondary Research

Following are some disadvantages of secondary research.

Out dated

Information collected by using secondary research method may be out dated because it is collected some time before.

Difficult To Find

It is very difficult to find required information by using secondary research method because there is large amount of information is available.