Businesses have technically always used marketing tools to promote and sell their work, but the term "marketing mix" was coined in the mid-20th century. One of its first uses was in a 1953 address to the American Marketing Association, in which Harvard professor and marketing expert Neil Bordon outlined how marketers develop and execute a successful marketing plan.
Identifying and arranging the elements of its marketing mix allows a business to make profitable marketing decisions at every level. These decisions help a business:
- 1. Develop its strengths and limit its weaknesses
- 2. Become more competitive and adaptable in its market
- 3.`Improve profitable collaboration between departments and partners
Since the 1950s, the elements of the marketing mix have undergone various transformations in response to new technologies and other changes in marketing best practices.
What is 4 P of Marketing?
A product is a commodity, produced or built to satisfy the need of an individual or a group. The product can be intangible or tangible as it can be in the form of services or goods. It is important to do extensive research before developing a product as it has a fluctuating life cycle, from the growth phase to the maturity phase to the sales decline phase.
Also, the Unique Selling Proposition of the product must be determined as well as the potential buyers of the product.
There are questions you need to ask when you want to determine the kind of product you should have. They include:
- Benefits of Products to my customers.
- Why my customers will buy my product
- Will my customers buy my product again.
- Is my product satisfying the need,want or desire.
- Whats the USP of my product
D-Mart is a one-stop outlet that offers a wide range of choice in home and personal products to its customers. It believes in mass commodities and therefore its products are available in different sizes and colours. Apparels are displayed in a systematic manner in accordance with their size options.
Retail price, actual discount and offer price are displayed on the tags for the convenience of customers. Area of the outlet is divided in accord with products as every product has a separate section from which a customer can easily make a choice. Each D-Mart outlet has following products in its portfolio-
- Food items including vegetables, fruits, dairy products, frozen eatables
- Grocery items like flour, rice, dal, sugar, salt
- Apparels for kids, male and females
- Beauty products and personal care including soap, shampoo, cleanser, toner
- Kitchenware including crockery, utensils, plastic containers
- Toys and games for children
- Home appliances like iron, mixer grinder, grill toaster
- Bed and bath linen
- Luggage like trolley bags
- Footwear for everyone including children, men and women
- Daily essentials like biscuits
Price in Marketing Mix:
Price is a very important component of the marketing mix definition. The price of the product is basically the amount that a customer pays for to enjoy it. Price is the most critical element of a marketing plan because it dictates a company’s survival and profit. Adjusting the price of the product even a little bit has a big impact on the entire marketing strategy as well as greatly affecting the sales and demand of the product in the market. Things to keep on mind while determining the cost of the product are, the competitor’s price, list price, customer location, discount, terms of sale, etc. Consumers use price as an indicator of product quality or benefits. High-priced brands are often perceived to be of higher quality and become less exposed to price cuts of competitors.
Example of Dmart's Marketing Mix (Price)
Dmart offers a 7% of minimum discount on MRP at any given time on all items except fruits, grocery, vegetables and medicines. D-Mart has also adopted a discount pricing policy and it periodically offers its customers various incentives and lucrative discounts, especially during festival seasons. Customers at such times buy in bulk quantities resulting in a huge volume of sales. This is the reason why such stores are able to earn greater revenues.
Place in Marketing Mix:
Place refers to distribution or the methods and location you use for your products or services to be easily accessible to the target customers.
Your product or service dictates how it should be distributed.
If you own a retail shop, for example, the distribution chain ends with you and you supply to your customers directly.
If you own a factory, your options will be to either sell your products directly or sell them to retailers or vendors as your distribution strategy.
Selling Directly
Direct selling can be a good starting point, especially if the product supply is limited or you only sell seasonal products.
One advantage of selling your products directly is you get a more personal feel of the market because you interact directly with the customers so you can easily adapt to the changes.
Another is that you control your product’s pricing and the methods on which it should be sold.
Distribution methods may include, but are not limited to, door-to-door, retail, e-commerce, mail order, or on-site.
You need to have a retail interface with the target customers if you want to sell directly.
You can sell either electronically or in person.
If this requirement will not work for you, you might need to consider selling through a reseller or an intermediary.
Selling Through a Reseller
If you want to have wider distribution for your product, you can sell it through a third party, either a retailer or wholesaler, who will then resell the product to their customers.
This distribution strategy also reduces the pressure of running a distribution system.
Reseller sales also reduce the storage space required for product stocks.
However, you will lose personal contact, and even company identity in some cases, with the customers since they will be talking now to your resellers.
Some resellers may request that your product be sold under their own brand.
Intermediaries can also be specific about supply flow before they can handle your products for reselling.
They would want the product available for distribution all year round.
This can put a lot of stress on the production line, especially if you only produce seasonally.
But if you can agree to that, you might consider selling through intermediaries as your distribution strategy.
Market Coverage
Market coverage refers to how wide or varied you want your products to be distributed.
This applies to either direct sales or through intermediaries. There are three types of market coverage that you may want to adopt.
Intensive distribution
This ensures the widest distribution possible for your product or service.
You sell your products in as many locations or markets as possible. And often at times, you need to lower your prices.
This is the method most commonly used by large businesses or manufacturers to reach customers nationwide or even globally.
Examples of products effectively distributed using this distribution strategy are convenience products or things we buy regularly, like candy or chewing gum.
Selective distribution
You may also want to sell only to a few select businesses or customers.
This is called selective distribution and is the strategy commonly used for selling upscale products and is sold by resellers who deal only with high-quality products.
It’s easier to establish consumer relationships using this distribution strategy as compared to intensive distribution.
Exclusive distribution
This strategy restricts your product distribution to only one reseller.
The reseller will have exclusive rights to sell your product or service, and in return, you may also be the sole supplier.
This works more effectively with specialty products that you can promote as prestigious because you are the sole supplier and the intermediary is the sole reseller.
Other Factors to Consider
The product sales volume and its characteristics will influence what inventories you should maintain and also how the products should be transported.
You may opt to ship in large volumes across countries or do it via retail to single individuals.
If you’re into manufacturing, you need to carefully monitor the total costs by considering every factor required in production like the acquisition of the materials and the distribution strategy you choose to use.
Each of the distribution strategies has its own characteristics, advantages, and disadvantages.
Choose one that best applies to your product and business.
Example of Dmart's Marketing Mix (Place)
D-Mart has a reach in most of the important cities in India including Ahmedabad, Surat, Rajkot, and Bhuj in Gujarat, Tirupathi in Andhra Pradesh, Hyderabad in Telangana, and Bangalore in Karnataka, Mumbai and Kolhapur in Maharashtra. It is able to provide its products through a network of one hundred and ten stores and has its headquarters base in Mumbai, India. D-Mart has set up its stores at very strategic points to gain maximum advantage from its locations because easy accessibility and proper transportation facilities are very important for the survival of any outlet.
Exceptional service is not the vital factor for such outlets. They have reliable and trained employees to help customers in hours of need but the consumers are generally self-sufficient and are likely to pick up items from various shelves themselves in a walking trolley basket and take it to billing counter for payment.
Dmart Ready Stores:
Also to add convenience for customers recently Dmart has introduced a new concept of Dmart Ready stores. To increase its customer base and to reach out to people who cannot visit its stores it has launched an app Dmart ready where customers order online and pick their products from their closest Dmart ready store. This is a fantastic positioning of Place in Marketing Mix strategy as it reduces the cost of Huge Place requirements as well as increases its brand reach and visibility.
Promotion in Marketing Mix:
It is a marketing communication process that helps the company to publicize the product and its features to the public. It is the most expensive and essential components of the marketing mix, that helps to grab the attention of the customers and influence them to buy the product. Most of the marketers use promotion tactics to promote their product and reach out to the public or the target audience. The promotion might include direct marketing, advertising, personal branding, sales promotion, etc.
Example of Dmart's Marketing Mix (Promotion)
D-Mart is one of the largest multi-brands in India and to maintain its position as one of the best, company has adopted several promotional activities. It offers gift coupons to reward its employees and during certain periods to boost its sales, coupons are also allotted to customers when they meet certain standards of bulk purchase. Discounts are offered during festive seasons, for example, there was a 10% off on prices of Cadbury products during Raksha Bandhan. D-Mart also creates brand awareness and visibility through hoardings. Latest offers and schemes can be easily known through its promotional activities that are published in newspapers.
D-MART MEHNAT HAMARI BACHAT AAP KI...! MISSION “ TO BE THE LOWEST PRICED RETAILER IN THE AREA OF OPERATION / CITY / REGION.” VISION IT IS OUR CONTINOUS ENDEAVOR TO INVESTIGATE, IDENTIFY & MAKE AVAILABLE NEW PRODUCT CATEGORIES FOR CUSTOMER’S EVERYDAY USE & AT THE BEST VALUES THAN ANYBODY ELSE
A shift from product-focused marketing to people-focused marketing
With the explosion of social media and digital marketing in the 2000s, the way brands communicate with customers has drastically changed. The number of services available to consumers have increased rapidly, and there has been a shift from mass marketing to niche marketing.
The 4Ps is a mass-marketed technique and a product-oriented approach. Businesses must nurture relationships with niche markets and supply solutions to clients. This is a market or a customer-orientated approach.
Another customer-focused marketing mix model is the 4C’s (Lauterbur, 1990), that uses the dimensions of communication, consumer needs, cost, and convenience. Marketing decisions are based on giving customers the service they need and want. The purpose to communicate with customers and identify their needs what they specifically want to buy (consumer needs), minimize the total buying cost to satisfy what a consumer wants (cost), and provide the consumers with the ease of getting the products/services (convenience).
4C’s: Marketing decisions are based on giving customers the service they need and want.
Extended Marketing Mix (7P's)
In recent years it has become more common to add three new elements to the traditional marketing mix, making a combined 7p’s. This is the so-called extended marketing mix.
The 7p's extended marketing mix, therefore, comprises the following elements:
Product: the good or service that the customer buys
Price: how much the customer pays for the product
Place: how the product is distributed to the customer
Promotion: how the customer is found & persuaded to buy
People: the people who make contact with customers in delivering the product
Process: the systems and processes that deliver a product to a customer
Physical: the elements of the physical environment the customer experiences
We will be discussing the Extended Marketing Mix in details in the coming days
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