- The marketing mix has been defined as the “set of marketing tools that the firm uses to pursue its marketing objectives in the target market”. Thus the marketing mix refers to four broad levels of marketing decision, namely: product, price, promotion, and place.
- It is about putting the right product or a combination thereof in the place, at the right time, and at the right price. The difficult part is doing this well, as you need to know every aspect of your business plan.
PRODUCT OR SERVICE
- “Product” refers to the goods and services you offer to your customers. Apart from the physical product itself, there are elements associated with your product that customers may be attracted to, such as the way it is packaged. Other product attributes include quality, features, options, services, warranties, and brand name. Thus, you might think of what you offer as a bundle of goods and services. Your product’s appearance, function, and support make up what the customer is actually buying. Successful entrepreneurs pay close attention to the needs their product bundles address for customers.
- “Price” refers to how much you charge for your product. Your pricing approach should reflect the appropriate positioning of your product in the market and result in a price that covers your cost per item and includes a profit margin,
- As a entrepreneur, you can follow a number of alternative pricing strategies:
- Cost-plus: Adds a standard percentage of profit above the cost of producing a product. Accurately assessing fixed and variable costs is an important part of this pricing method.
- Mark ups/margin: In many industries, such as jewellery, beauty supply, furniture, and clothing , the retailers of the products use a standard mark-up to price goods in their stores. This mark-up is expected to cover overhead cost and some profit.
- Competition: Based on prices charged by competing firms for competing products. This pricing structure is relatively simple to follow because you maintain your price relative to your competitors’ prices. In some cases, you can directly observe your competitors’ prices and respond to any price changes. In a non-differentiable product market the only justification for charging the higher price would be if the entrepreneur could provide additional services to the customer.
- “Place” refers to the distribution channels used to get your product to your customers. What your product is will greatly influence how you distribute it. It should also be consistent with other marketing-mix variables.
- If the market is concentrated than entrepreneur may consider option of direct selling, while if it is dispersed across wide geographical area than use of longer channels with wholesalers and retailers must be necessary.
- Middleman can add important value to the product. They lower the cost for single-product start-ups because they operate with economies of scale. Additionally, you may also reduce the storage space necessary for inventory.
- Channel decision may change over time. As the venture grows entrepreneur may find its own work force to be more efficient and no longer cost prohibitive.
- “Promotion” refers to the advertising and selling part of marketing. It is how you let people know what you’ve got for sale. The purpose of promotion is to get people to understand what your product is, what they can use it for, and why they should want it. To be effective, your promotional efforts should contain a clear message targeted to a specific audience reached via an appropriate channel.
- Promotion may involve advertising, public relations, personal selling, and sales promotions.
- Entrepreneur can consider advertising media such as print, radio or television.
- Larger market could be reached through internet, direct mail, trade magazines, or newspapers.