Marketing Mix

In marketing there is a simple theory that we use called the 4 P’s or The Marketing Mix. This basically stands for the 4 basic items that we are looking at and manipulating to make a company’s product offering viable and vendible. These 4 P’s stand for; product, pricing, placement, and promotion.

Product
The product is the most obvious one. Is the product something that the public wants, or more importantly, with the number of competing companies, wants more of. Some companies have products that they sell that would be considered commodities, or products that are nearly identical as their competitors, these could be milk, or bread. However most companies have a lot of movement they can do to produce a product that can be totally different in some ways than their competitor.

For instance look at personal computers. There are such a vast splay of products available from the very cheap, at around a few hundred dollars, to the very expensive at several thousand dollars. Yet, even with a splay as vast as this mostly all of these companies continue to survive and grow. The ones that typically don’t are usually forced out of the line not because their product was wrong but because they didn’t take the other 3 p’s into account… So what about the pricing…?

Pricing

As we said yesterday there is a definite separation between goods that can be easily differentiated and products that are more commodities in nature. One of the vast separations that we often see is the amount of price differentiation that can be utilized. As a product gets more separated in the market it is not uncommon for it to tend to go higher on the pricing scale. Many times these are products that are designed for the specific needs of a certain niche group of individuals.

Take for instance the new Venue sound system that is built by DigiDesign. This system is built directly for the needs of the application that it’s being put into. Sure it’s base cost is higher than that of many of the other sound boards out there but people are willing to pay the premium for a product that is designed to perform perfectly for the applications they are going for.

To throw another simple example at you look at Rolex. Many people find it to be a brand that is basically just an overpriced name, but take a look sometime at the way they build their watches. With laser engraved ceramic dials, hand made movements, and impeccable design Rolex has carved itself out a niche market of people that want the very best in a watch. These people wouldn’t be happy with a Timex or Casio. They want perfection, even if it means spending nearly $5000 or more on a watch. Timex on the other hand has a gigantic market and sells I’m sure thousands of times the number of watches Rolex sells every year. For every price there is a buyer for a product, but how is your product different, and does it justify it’s price?

Placement

As we take a look at the product itself and the pricing strategy that is being utilized we must also take into account the placement of the product itself. How will it be made available? Is it a service that is going to be spread through a geographic area, or a product with national or global distribution? Will it be sold in Walmart, or shipped from your website? Is it a product that needs it’s own store, or is it something that can fit in an existing retail chain? These are some of the questions that need to be asked and taken into account when deciding the placement of whatever it is your company is selling.

Something else that must be taken into account is if there is any kind of legal controls or anything of the sort. These legal regulations can control the geographic area that a service or product can be sold. Take for example insurance, as many know, I spent a year as a benefits consultant with AFLAC. During this time I was only licensed to sell in the states of Virginia and Maryland. These controls mean that I couldn’t necessarily take on clients in other states, which controlled my placement through no fault of my own.

Promotion

Finally, promotion is what many people believe marketing is and don’t realize it’s just a small part of what is currently considered the “marketing mix”. This part of the mix is pretty easy to understand. It’s the actual promotion of the product. From the branding to the methods which are used when getting the product out in front of people this is the section of the mix that is usually done by advertising, viral marketing, and P.R. work. Every product has a different marketing mix, and for every mix the promotion will many times be totally different.

Take for instance Red Bull. This is a company that took a very different look at their promotional side of their mix. They began by putting a number of trucks on the road with a giant can of Red Bull on top and they gave away free Red Bull’s to people to get the buzz going. By doing this they were able to, for less cost than most national advertising campaigns, create a much larger buzz marketing strategy, which in turn was able to gain a lot of attention from their target market. The easiest most efficient way to utilize promotions is by studying very closely your target market and from there figuring out what media sources, or viable marketing sources will target that particular market most efficiently and most effectively.