Initially, marketers are taught a basic definition: to place the correct product in the appropriate location, with an ideal price and timing. This seems uncomplicated – our goal is to develop a desirable product for a specific target audience, make it available where they often visit, and set a price that reflects its perceived value. Furthermore, we must do all this when they are prepared to buy. If we achieve these objectives, success is assured. This notion carries significant credibility.
Despite the challenges, it is necessary to invest considerable effort in understanding customer preferences and shopping habits. In addition, we must develop a strategy for manufacturing our product at a price that customers perceive as valuable and ensure flawless execution when it matters most. However, even a small mistake can have disastrous consequences. For instance, advertising a highly fuel-efficient vehicle in an area with unusually low fuel prices or releasing a textbook after the start of the school year are risks. Similarly, setting an excessively high or low price for an item that fails to attract our target audience is another potential pitfall.
The marketing mix and the 4 Ps of marketing are commonly used interchangeably, but they have slight differences. The term “marketing mix” pertains to the decisions made by organizations when introducing a product or service to the market. The 4 Ps, initially introduced by E J McCarthy in 1960, serve as a renowned framework for defining the marketing mix. These 4Ps encompass:
- Product (or Service)
- Place
- Price
- Promotion
These are the variables that marketing managers have control over in order to effectively satisfy customers in the target market. The firm aims to create a favorable response in the target market by blending these four variables of the marketing mix in the best possible way. * Product The product refers to the tangible product or service provided to the consumer.
When it comes to physical products, the term “product” refers to any services or conveniences included in the offering. Product decisions involve function, appearance, packaging, service, warranty, and more. Price decisions should consider profit margins and how competitors may respond to pricing. Pricing encompasses the list price, as well as discounts, financing, leasing, and other alternatives. Place decisions relate to channels of distribution that deliver the product to the target customers.
The distribution system fulfills various functions, including transactions, logistics, and facilitation. Decisions regarding distribution involve market coverage, selecting channel members, managing logistics, and determining levels of service. Promotion decisions involve communicating and selling to potential consumers. As these costs can be significant compared to the product price, it is important to conduct a break-even analysis while making promotion decisions. Understanding the worth of a customer is valuable in assessing if acquiring more customers is cost-effective.
