The Marketing Mix

(The 4 P's of Marketing)

Marketing decisions generally fall into the following four controllable categories:

 Product
 Price
 Place (distribution)
 Promotion

The term "marketing mix" became popularized after Neil H. Borden published his
1964 article, The Concept of the Marketing Mix. Borden began using the term in his
teaching in the late 1940's after James Culliton had described the marketing
manager as a "mixer of ingredients". The ingredients in Borden's marketing mix
included product planning, pricing, branding, distribution channels, personal selling,
advertising, promotions, packaging, display, servicing, physical handling, and fact
finding and analysis. E. Jerome McCarthy later grouped these ingredients into the
four categories that today are known as the 4 P's of marketing, depicted below:

The Marketing Mix

These four P's are the parameters that the marketing manager can control, subject
to the internal and external constraints of the marketing environment. The goal is
to make decisions that center the four P's on the customers in the target market in
order to create perceived value and generate a positive response.

Product Decisions

The term "product" refers to tangible, physical products as well as services. Here
are some examples of the product decisions to be made:

 Brand name
 Functionality
 Styling
 Quality
 Safety
 Packaging
 Repairs and Support
 Warranty
 Accessories and services

Price Decisions

Some examples of pricing decisions to be made include:

 Pricing strategy (skim, penetration, etc.)

 Suggested retail price
 Volume discounts and wholesale pricing
 Cash and early payment discounts
 Seasonal pricing
 Bundling
 Price flexibility
 Price discrimination

Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some examples of

distribution decisions include:

 Distribution channels
 Market coverage (inclusive, selective, or exclusive distribution)
 Specific channel members
 Inventory management
 Warehousing
 Distribution centers
 Order processing
 Transportation
 Reverse logistics
Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of
marketing communication, that is, the communication of information about the
product with the goal of generating a positive customer response. Marketing
communication decisions include:

 Promotional strategy (push, pull, etc.)

 Advertising
 Personal selling & sales force
 Sales promotions
 Public relations & publicity
 Marketing communications budget

Limitations of the Marketing Mix Framework

The marketing mix framework was particularly useful in the early days of
themarketing concept when physical products represented a larger portion of the
economy. Today, with marketing more integrated into organizations and with a
wider variety of products and markets, some authors have attempted to extend its
usefulness by proposing a fifth P, such as packaging, people, process, etc. Today
however, the marketing mix most commonly remains based on the 4 P's. Despite
its limitations and perhaps because of its simplicity, the use of this framework
remains strong and many marketing textbooks have been organized around it.
 The Marketing Mix
(The 4 P's of Marketing)

The major marketing management decisions can be classified in one of the following
four categories:

 Product
 Price
 Place (distribution)
 Promotion

These variables are known as the marketing mix or the 4 P's of marketing. They are
the variables that marketing managers can control in order to best satisfy customers in
the target market. The marketing mix is portrayed in the following diagram:

The Marketing Mix 

Product   Place

     

Target
       
Market

     

Price   Promotion

The firm attempts to generate a positive response in the target market by blending
these four marketing mix variables in an optimal manner.
Product

The product is the physical product or service offered to the consumer. In the case of
physical products, it also refers to any services or conveniences that are part of the
offering.

Product decisions include aspects such as function, appearance, packaging, service,

warranty, etc.

Price

Pricing decisions should take into account profit margins and the probable pricing
response of competitors. Pricing includes not only the list price, but also discounts,
financing, and other options such as leasing.

Place

Place (or placement) decisions are those associated with channels of distribution that
serve as the means for getting the product to the target customers. The distribution
system performs transactional, logistical, and facilitating functions.

Distribution decisions include market coverage, channel member selection, logistics,

and levels of service.

Promotion

Promotion decisions are those related to communicating and selling to potential

consumers. Since these costs can be large in proportion to the product price, a break-
even analysis should be performed when making promotion decisions. It is useful to
know the value of a customer in order to determine whether additional customers are
worth the cost of acquiring them.

Promotion decisions involve advertising, public relations, media types, etc.

A Summary Table of the Marketing Mix

The following table summarizes the marketing mix decisions, including a list of some of
the aspects of each of the 4Ps.
 Summary of Marketing Mix Decisions

Product Price Place Promotion

Functionality List price Channel members Advertising

Appearance Discounts Channel motivation Personal selling

Quality Allowances Market coverage Public relations

Packaging Financing Locations Message

Brand Leasing options Logistics Media

Warranty Service levels Budget

Service/Support

Price Powe Product Pric Engine Gear Power Torque Segm

Gea Torque
Product (in Engine r Segment e (bhp) (Nm) ent
r (Nm)
lakhs) (bhp) in
lakh
Maruti-
Maruti- 3cyl 4cyl
2.1 4M 37 59 C Esteem- 4.3 5M 85 110 B
800-AC 796cc 1298cc
LX
Maruti-
Maruti- 3cyl 4cyl
1.9 4M 37 59 C Esteem- 4.6 5M 85 110 B
800-Std 796cc 1298cc
LXi
Maruti-
Maruti- 3cyl 4cyl
2.7 5M 47 62 C Esteem- 4.5 5M 85 110 B
Alto-LX 796cc 1298cc
VXi
Maruti-
Maruti- 3cyl V6
2.9 5M 47 62 C Grand- 23 5M 166 236 SUV
Alto-LXi 796cc 2736cc
Vitara
Maruti- 3cyl Maruti- 4cyl
2.3 5M 47 62 C 5.2 5M 81 104 Jeep
Alto-Std 796cc Gypsy 1298cc
Maruti- 4cyl - Maruti- 3cyl
3.6 5M 67 90 C 2.5 4M 35 60 Van
Astar 998 CC Omni 796cc
Maruti- 4 Cyl
4cyl Maruti-
Baleno- 5.8 5M 94 131 B 4.6 1197 CC 5M 85 113 C
1590cc Ritz
LXi K12M
Maruti- 4 cyl
4cyl Maruti-
Baleno- 6.6 5M 94 131 B 5.1 1248 CC 5M 75 190 C
1590cc Ritz-D
VXi DDiS
Maruti- 4 cyl
Maruti- 4cyl
Dzire- 5.6 1248 5M 75 190 B 4 5M 87.5 113 B
Swift-LXi 1298cc
Diesel Mjet-CR
Maruti- 4 cyl Maruti- 4cyl
4.6 5M 87 113 B 4.3 5M 87.5 113 B
Dzirel 1298 CC Swift-VXi 1298cc
Maruti- 4cyl Maruti- 4cyl
3 5M 73 101 C 5.1 5M 87.5 113 B
Eeco 1196cc Swift-ZXi 1298cc
Maruti-
4cyl Maruti- 4cyl
Versa- 4.3 5M 82 102 Van 7 5M 102 154 B
1298cc SX4 1586cc
Std
Maruti-
4cyl Maruti- 4cyl
WagonR- 4.6 5M 64 84 Van 4.3 5M 82 102 Van
1061cc Versa-DX 1298cc
AX
Maruti- Maruti-
4cyl 4cyl
WagonR- 3.3 5M 64 84 Van Versa- 4.7 5M 82 102 Van
1061cc 1298cc
LX DX2
Maruti- Maruti-
4cyl 4cyl
WagonR- 3.5 5M 64 84 Van WagonR- 3.7 5M 64 84 Van
1061cc 1061cc
LXi VXi
Maruti- 4cyl Maruti- 4cyl
4 5M 60 78 C 3.76 5M 60 78 C
Zen-LXi 993cc Zen-LX 993cc