As said by Karen Beamish (2005) the term Marketing Mix is one of the most important marketing tools. The components of the marketing mix are the most useful and tactical part of a marketing plan. These provide a very good level of assistance for a marketing person in following up their objectives. The quantity of each element may vary according to the requirements of the marketing plan. Initially the marketing mix consisted of 4Ps (Product, Price, Place, and Promotion) but these elements were sufficient only for a limited period and when the transformation of business and customer were realized then 3 new service elements (People, Process and Physical Evidence) were added to the mix. (Marketing Mix)
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From Three Levels of Product In general the term product refers to a physical service or product provided to the customer. This element of marketing mix needs research on the requirements of the potential market to provide a product that fulfils their needs and makes their life easy. (Curtis, 2007) Every product and service offers 3 levels of product to the customer. The CORE (functionality and safety) product is the intangible product. It is the benefit of the ACTUAL product that makes it worth. The AUGMENTED (warranty, accessories and services) product is the other abstract part of the product which may consist of some value added services.
As discussed in pricing Strategies pricing is of utter importance in the mixture of marketing mix. It is the only element that generates revenue for the business. The pricing strategies may vary at times based on many factors like the nature of the product, condition of market, current position of the organization in the market. (Curtis, 2007) These strategies are implemented in the pricing gap i.e. the difference between the cost of the product or service and the customer’s value. The cost of its product must be generated in the sales by any organization otherwise it would not be able to survive the market. A product can’t be sold if it is priced more than its value for the consumer. (Pricing Strategies)
According to Kotler (2003) the third P in the marketing mix is the place where the product of an organization is going to be sold. More specifically place means the channel, how the product or service of a company can be taken from the manufacturer’s end to the consumer’s end. The cannels can be of many kinds like agents, retailers, internet, overseas distributers, and direct marketing. (Place, distribution, channel, or intermediary)
Kotler (2003) considers that promotion means all the tactics and ways used by marketers to tell about the product or service of the company. Promotion refers to the marketing communication used for spreading information about the company and its product and service. (Curtis, 2007) Promotion doesn’t mean to communicate only about the product but to spread word about the benefits of the product and services of the company. The promotion element of the marketing mix also includes the cost of the media and advertising. Promotion and advertising need to be innovative as sooner or later each plan stops working. Promotion activities of a product should change after a specific interval of time in order to keep them working. (Promotion)
The element people of the extended marketing mix include each and every stakeholder of the organization. Customer, employee, manager, and everyone involved with the product or service. If a company wants an edge over its competitors then the staff recruited by the organization must be well trained in interpersonal skills, aptitude, and the knowledge of the service or the product they are going to provide to the customer. Companies interact with consumers through their employees and the attitude of the employees is the root of building perceptions about the company in customers mind. (Service Marketing Mix/Extended Marketing Mix)
Process refers to the system and process of methods that are helpful in providing the service or product to the customer. This element includes the reconstructing of all the other elements of the marketing mix. All the other ingredients of the marketing mix need new processes to be introduced. (Marketing Mix)
(Three Levels of Product)This element of marketing mix describes the tangible part of a product or service of a company. Based on these physical evidences a consumer makes judgments about the company and its product or service. Many industries like tourism and parcels mix this element majorly in the marketing mix. (Marketing Mix)
Development of Products to Sustain Competitive Advantage
Graeme Drummond, (2005) consider that In modern marketing it is a fact that, if the company wishes to maintain a worthy level of presence and appreciation against its competitors and their offered services and products, a product must enjoy one or more major sustainable competitive advantages .According to Curtis (2007)Sustainable competitive advantage is a key point of corporate strategies. It means being in harmony with not only the consumer’s needs but also with the competitive market, new tools and technologies etc. A product must be developed as a response to the customers needs and requirements and research and developments in the field are also required. As competitors are always likely to imitate a successful competitor so a company must always strive for the betterment of the service and product it offers to the consumer. (Curtis, 2007) (Three Levels of Product)
According to (Three Levels of Product) any product or service developed by a company, it must offer 3 levels of product or service to the customer i.e. Core product, Actual product, and augmented product. Core product is the service, facility, functionality and the safety provided by the product. Actual product is the physical and tangible part of the product for which the consumer actually pays for. Augmented product is the additional services provided with the actual product like the warranty with the product and other customer support services. (Graeme Drummond, 2005)
From (Three Levels of Product) every product has its own life cycle that is similar to the biological life cycle. Generally a product goes through 4 phases in its life cycle i.e. introduction, growth, maturity and decline. After being developed a product is introduced in the market and the company does not expect any quick profit from the product. Then the market of the product grows and after a certain period of time it comes to hold. Then the market of the product starts declining and that is the time when the research in the development of products shows its roll and gives a new start to the product. (Graeme Drummond, 2005)
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Arranging Distribution to Provide Customer Convenience
Graeme Drummond, (2005) believes that distribution of a product is an essential ingredient of the marketing mix. It is a system which is being implemented to supply the product where and when the customer wants it. Distribution of a product needs various decisions to be taken like distribution channels, inventory management, warehousing, distribution centers and transportation. (Curtis, 2007). Distribution of a product is facilitated by a well equipped system called supply chain management. Distribution is arranged to offer consumer a good level of convenience in getting the product. The channels of distribution are decided by answering questions like, direct or indirect channels, type and number of intermediates, etc. The distributer of the product must be well aware of the product, its benefits, and the target potential market of the product. The intermediates between the manufacturer and the consumer can be of many types. Wholesalers cut down the selling cost of the product between the manufacturer and the customer. (Place, distribution, channel, or intermediary) They fragment the bulk order into small packages and supply further to retailers. Retailers have a more personal contact with the customers. They promote the product and service by their own and have their own brand name like Wall-Mart. (Place, distribution, channel, or intermediary)
Set Prices to Reflect Organization’s Objectives & Market Condition
Discussed in Pricing Strategies price of a product or service is the amount collected by the manufacturer after calculating all the cost invested from the development of the product to the distribution of the product to the consumer. Pricing of a product or service may vary according to market conditions and organization’s goals. There are many pricing strategies which can be adopted by an organization at times. (Curtis, 2007)
Premium Pricing: This strategy works in case of a unique product. High prices are applied when the quality of the product or service is very good.
Penetration Pricing: In this pricing formulae initially price of the product or service are intentionally kept low to gain the market share and when the market is captured then the prices are increased gradually.
Economy Pricing: Prices are lowered by minimizing the cost of the production and marketing the quality of the product or service is also not too good.
Price Skimming: If a company has a substantial competitive advantage then this pricing strategy is used. The prices are kept high due to the advantage. (Pricing Strategies)
Integrate Promotional Activity to Achieve Marketing Objectives
(Curtis, 2007)The fourth P of the marketing mix is promotion. Promotional activities refer to marketing communication like Advertising, Sales Promotion, Public Relations, Sponsorships, Trade fairs and direct marketing. All these activities are important to meet the marketing objectives of an organization. Advertising can penetrate the market of different geographic regions and because of the rules and regulations of advertising media the advertised product is assumed to be more reliable. Offering various short term incentives like gift vouchers, coupons and contests attract customers to the product. All the promotional activities are used to target different consumer group in their own ways. (Promotion)
Additional Elements of Extended Marketing Mix
Kotler (2003) considers that other than above 4 Ps the extended marketing mix includes three more P elements which are People, Process and Physical Evidence. All the People involved in the development to the marketing of the product are known as stakeholders of the company. These stakeholders are most valued for the marketing of a product. A well trained employee and aware customer is required to fulfill the objectives of marketing. Process is the complete process of supply chain management to deliver a product or service to the customer. Green Supply chain is most helpful in the marketing of a product because environmental issues are the most effective if they are taken care of. A company thinking for the environment and using a process that does not bring any harm to it gets attraction of the consumers. Physical evidences are an important and intangible ingredient of the marketing mix. It is the environment in which the product or service is delivered. (Service Marketing Mix/Extended Marketing Mix)
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