Till now we have learnt that marketing identifies consumers’ needs and supplies various goods and services to satisfy those needs most effectively. So the businessman needs to: (i) produce or manufacture the product according to consumers’ need; (ii) make available it at a price that the consumers’ find reasonable; (iii) supply the product to the consumers at different shops they can conveniently purchase it from; and (iv) inform the consumers about the product and its characteristics through the media (advertising and promotions) they have access to. So the marketing manager concentrates on four major decision areas while planning the marketing activities, namely, (i) products, (ii) price, (iii) place (distribution) and (iv) promotion. These 4 ‘P’s are called as elements of marketing and together they constitute the marketing mix. All these are inter-related because a decision in one area affects decisions in other areas. In this lesson you will learn about the basic aspects relating to these 4‘P’s viz., product, price, place and promotion.
Marketing involves a number of activities that revolve around the product. To start with, an organisation may decide on its target group of customers to be served. Once the target group is decided, the product is to be placed in the market by providing the appropriate product, price, distribution and promotional efforts. These are to be combined or mixed in an appropriate proportion so as to achieve the marketing goal. Such mix of product, price, distribution and promotional efforts is known as ‘Marketing Mix’.
Product : Product refers to the goods and services offered by the organisation. A pair of shoes, a plate of burger, a jeans, all are products. All these are purchased by the customers because they satisfy one or more of our needs. We are paying not for the tangible product but for the benefit it will provide. So, in simple words, product can be described as a bundle of benefits which a marketer offers to the consumer for a price. While buying a pair of shoes, we are actually buying comfort for our feet, local shoe will give you less satisfaction and costly shoe will give you more satisfaction. Product can also take the form of a service like an internet connection, telecommunication, etc. Thus, the term product refers to goods and services offered by the organisation for sale.
Price: Price is the amount charged for a product or service. It is the most important element in the marketing mix. Fixing the price of the product is a difficult job. Many factors like demand for a product, cost involved, consumer’s ability to pay, prices charged by competitors for similar products, government restrictions etc. have to be kept in mind while fixing the price. In fact, pricing is a very crucial decision area as it has its effect on demand for the product and also on the profitability of the firm.
Place: Goods are produced to be sold to the consumers. They must be made available to the consumers at a place where they want and can conveniently make purchase and easily available to the customer. Electronics are manufactured on a large scale in japan or china and you purchase them at a store from the nearby market in your town. So, it is necessary that the product is available at shops in your town. This involves a chain of individuals and institutions like distributors, wholesalers and retailers who constitute firm’s distribution network (also called a channel of distribution). The organisation has to decide whether to sell directly to the retailer or through the distributors/wholesaler etc. It can even plan to sell it directly to consumers.
Promotion: If the product is manufactured keeping the consumer needs in mind, is rightly priced and made available at outlets convenient to them but the consumer is not made aware about its price, features, availability etc, its marketing effort may not be successful. Therefore promotion is an important ingredient of marketing mix as it refers to a process of informing, persuading and influencing a consumer to make choice of the product to be bought. Promotion is done through means of personal selling, advertising, publicity and sales promotion. It is done mainly with a view to provide information to prospective consumers about the availability, characteristics and uses of a product. It arouses potential consumer’s interest in the product, compare it with competitors’ product and make his choice. The proliferation of print and electronic media has immensely helped the process of promotion.
So, The marketers delivers value to the customer basically through his market offer. He takes care to see that the offer fulfils the needs of the customer. He also ensures that the customer perceives the terms and conditions of the offer as more attractive vis-à-vis other competing offers. Marketing Mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. It is the sole vehicle for creating and delivering customer value.
Marketing mix or 4 Ps of marketing is the combination of a product, its price, distribution and promotion. It must be designed by marketers in such a manner that these four elements together must satisfy the needs of the organisation’s target market, and at the same time, achieve its marketing objectives.