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Wednesday, November 13, 2013


The marketing mix consists of the following four major activities usually referred to as elements of Marketing mix.

1. Product: activities relating to the product, service or idea to be offered.
2. Price: activities relating to the price to be charged for the product, service or idea.
3. Promotion: activities relating to promotion (advertising, personal selling, sales promotion and publicity, called promotional mix) of the product, service or idea.
4. Place: activities relating to distribution of the product, service or idea (physical distribution and channels of distribution).  

Sometimes marketing research-the systematic gathering of information to solve marketing problems, is also included in marketing mix.  

McCarthy proposed this four-factor classification of different marketing activities. Please note that this is not the only way of classifying marketing activities but certainly the one which has caught our imagination most. There are two other classifications which are worth mentioning here. One of them is by Frey (1961). According to him all marketing decision variables (i.e., activities) could be categorised into two factors, viz., the offering consisting of product, packaging, brand, price and service and the methods and tools comprising distribution channels, personal selling, advertising, sales promotion and publicity. The other is by Lazer and Kelly (1962) who proposed a three-factor classification, viz., goods and service mix, distribution mix, and communication mix.  

We will, however, use McCarthy's 4Ps approach in our discussion of the marketing mix.
The subsequent four sub-sections describe each of these four activities or Ps in greater detail.

1.   Product Activities

A product, service or idea, may be defined as something which is given to consumers in exchange for a price. Activities related to a product, service or idea include the following:

-      Quality
-      Features
-      Style
-      brand name
-      packaging
-      sizes
-      services
-      warranties
-      returns  

The following are some examples of product related activities:  

-        Titan, a Tata company, launches Titan Quartz Watches for the Indian Market.

-        Atash Leasing and Industries Ltd's Frooti Plant in Noida, Uttar Pradesh, launches a new era of fruit drinks in Tetra Brik cartons for Delhi, U.P. and Rajasthan.

-        The Bank of Bahrain and Kuwait announces the opening of its new totally computerised branch office in Bombay.

-        Housing Development Finance Corporation introduces the Home Savings Plan which starts as a saving and ends as a low interest housing loan.

-        Dunlop introduces the concepts of Tyre Service Centres

For example - Hero motor cycle features of Splender Bike in an attempt to attract the attention of customers:  

"A phenomenal certified 75 kms per litre fuel efficiency under test conditions" "Fully automatic gears"
"Powerful enough to carry two comfortably"
"Low maintenance"
"Dependable All-India Service network"
"Study, built to last years"
"International Styling"  

2.   Pricing Activities

You can define price as the amount of money that consumers must pay in exchange for the product, service or idea. Generally, marketers consider the following factors in setting prices:
Target customers: how much they will buy at various prices, in other words, price elasticity of demand.
Cost: how much it costs to produce and market the product, i.e., both production and distribution costs.
Competition: severe competition may indicate a lower price than when there is monopoly or little competition.
The law: government authorities place numerous restrictions on pricing activities.
Social responsibility: pricing affects many parties, including employees, shareholders and the public at large. These should be considered in pricing. 

There are other factors as well, besides the ones listed above which a marketer has to consider. For example, a television set manufacturer may have to determine prices for the distributor, the dealer, and the ultimate consumer. Different varieties of the product may have varying prices, e.g., a `deluxe' model may be priced higher than a very basic model. Similarly, there are other factors which a marketer has to consider like the granting of discounts and allowances or location of the customer in determining prices. These are significant questions, and how they are dealt with can make a real difference in the sales volume of the organisation.  

3.   Promotional Activities

Promotional activities consist of various means of communicating persuasively with the target audience. The important promotional methods are:

Advertising - where an identified sponsor pays media (such as Doordarshan's National Network) to transmit messages to target consumers.

Personal selling - where sales representatives employed by the firm engage in interpersonal communications with individual consumers and prospective customers.

Sales promotion - where the marketer utilises displays, demonstrations, premiums, contests or similar devices to supplement advertising and personal selling.

Publicity and public relations - where both publicity and public relations are used to stimulate supportive news items about the firm and its products that have greater credibility with the public than advertising.  

The general role of publicity is similar to advertising, but public relations (PR) usually addresses itself to a wider public than the firm's customers. In PR there is recognition that all actions taken by the firm communicate something to someone.  

The press release, news conference and the offer of some exclusive feature are typical ways of seeking publicity. The weakness of both PR and publicity is that the firm does not pay the piper and so does not call the tune.  

Of particular importance is the composition of the promotion mix. The promotion mix is the particular combination of advertising, personal selling and sales promotion that is used in communicating with consumers. Generally, advertising is employed to reach large groups of consumers at a low price per contact. It-is widely used by firms selling consumer durables as well as by selling consumption items like toiletries to serve a mass market. Personal selling has a higher cost per contact, but is an intense form of communication - consumers usually find it more difficult to ignore or refute the arguments of a sales person than the persuasive appeals of an advertisement.  

Firms selling items like computers, home products, etc. utilize personal selling extensively. For example, Eureka Forbes utilizes its salesmen for door to door selling of its home-products, viz., Euroclean (the all-purpose cleaning system) and Aquaguard (on-line electronic water-purifier). Finally, sales promotion aids advertising and personal selling in achieving the communications mission, it tends to accomplish tasks the other two are not capable of attaining, but is generally supplementary to them. Sales persons demonstrating the use of particular items in stores can considerably enhance the effect of advertising upon consumers.  

Like other elements of the marketing mix, promotion should be aimed at the target audience rather than at consumers at large. If target consumers are in upper-income groups, promotional messages for, say, colour television sets might highlight motives such as status and prestige associated with owing a colour television, whereas if they are in lower-income groups, the price of a model might be emphasised. If target consumers tend to be highly educated, promotion messages should be more sophisticated than when target consumers have low levels of education. Failure to consider the unique characteristics of the target consumer can result in ineffective promotional efforts.  

4.   Place or Distribution related Activities  

Basically, place or distribution activities are used to transfer ownership to consumers and to place products, services and ideas at the right time and place.

Distribution is made up of two components: (1) Physical distribution, and (2) Channels of distribution.
Physical distribution consists of the activities involved in moving products or services from producer to consumer. Examples include:  

1. Transportation
2. Warehousing and Storage
3. Order Processing
4. Inventory Control
5. Locations

Often, the objective of physical distribution is to move goods to consumers at minimum cost. This can frequently be accomplished through cost trade-offs, as and when an organisation shifts from railways to air transportation, thereby increasing transportation costs but possibly decreasing total costs because of substantial decline in the cost of inventory. Sometimes, management considers the cost of lost sales in its cost trade-off analysis. The cost of lost sales is that cost which results when goods are not available at the time, place, and in the condition desired by consumers. Thus, if air freight moves goods to consumers faster than trucks, the cost of lost sales can be reduced.  

The physical distribution network should be oriented towards the needs and desires of target consumers. Thus, the target consumers for cut flowers may require very rapid, fresh and damage-free transportation, thereby necessitating air freighting. (e.g., sending roses from Bangalore or Nasik to Bombay by air). On the other hand, target consumers of an item like steel or cement may look for reliability in delivery schedules but relatively' unconcerned with speed of delivery suggesting the use of rail transportation.  

The channels of distribution are those routes through which the ownership of goods, services and ideas flows on the way from producer to consumer. Thus, a rather typical channel for consumer goods such as grocery items is from producer to wholesaler to retailer to ultimate consumer.  

In establishing channels of distribution, the marketer decides which marketing functions are needed in order to satisfy target consumers, then determines which institutions (such as wholesalers and retailers or the manufacturer himself) can best perform these functions. Some manufacturers such as Kinetic Honda may find that independent dealers are better equipped to serve target consumers, and as a result decide to distribute their product (scooter) through dealers. Another producer such as the Hindustan, Lever may decide to move its products through a suitable permutation of clearing and forwarding agents, stockists and wholesalers depending upon the region, accessibility, time of the year, and so on. The overall objectives of such decisions is to maximise service to the consumer at a profit to the marketer.


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