Meaning Of Marketing Mix
Marketing mix is a blending of decisions in four major areas of marketing: product, price, physical distribution, and promotion.
Marketing mix is a set of marketing tools that the firm uses to pursue it's marketing objectives in the target market.
Elements Of Marketing Mix
1. Product
Product includes goods and services valuable to customers which are offered in the market. Valuable in terms of satisfying there needs or set of similar needs.
A product is anything that can be offered to a market for attention, acquisition, use or consumption; it includes physical objects, services, personalities, places, organisation and ideas.
The product is now further divided into three sections. They are:
(A). Branding
Branding is the process of giving a product distinct individuality by affixing a brand. Based on branding, you will find two products in market: branded products and generic products (without brands).
Functions of branding
1. Product identification
Branding identifies a product clearly as customers purchase products on the basis of their brand names.
2. Product differentiation
Branding differentiates a particular product of the same line and explain why the product is different than other products in market.
3. Assuring product quality
Branding assures product quality because each brand has specified product quality.
4. Sense of satisfaction to customers
Branding offers a sense of satisfaction to customers as they tend to feel assured about the product quality at the time of buying the product.
5. Basis for product promotion
Branding is the basis of product promotion as the product brand is emphasized in all promotional efforts.
(B) Packaging
Packaging is designing and producing the container or wrapper of a product.
At present packaging has become quite significant. As a result, you will now find many products being sold in packages, such as sugar, milk, salt, flour, etc.
Functions of packaging
1. Product protection
The basic function of packaging is to provide protection to products. Therefore, products remain safe for a much longer time.
2. Product identification
Packaging helps in identification of products. In most cases even products features are mentioned on the packages.
3. Preventing adulteration
Packaging protects adulteration of products, thereby keeping their initial features intact. This is the reason why people prefer to buy packaged goods more.
4. Convenient handling
Packaging results in convenient handling of products. If certain handling precautions are required the are mentioned on the package.
5. Product promotion
Packaging is a good tool of product promotion. This function of packaging is being increasingly emphasised. Many companies are using their packaging as self advertisement and self salesmanship by making it attractive.
(C) Labelling
Labelling involves putting identification marks on the package.
A label may be a part of the package or it may be a tag attached to the product.
Functions of labelling
1. Describing products features
Labelling helps in describing salient features of a product. These features are quite helpful to customers.
2. Identification of product and it's brand
Labelling helps in identification of the product and its brand name. This helps a customer to make buying decision quickly and saves time and efforts.
3. Grading of products
Many products require grading in terms of quantity, weight, size, price, etc. However the grading of products becomes easier as such details are given on the label of products.
4. Hepls in promotion
Labelling helps in product promotion by providing salient features of the product on the label. Because of these features customers are attracted to the product.
5. Providing statutory information
For many products it is mandatory to provide specific information on the label, for example, manufacturing and expire date for medicines, statutory warning on health hazardous products, etc. Thus , customer take precautions while buying and using these products.
2. Pricing
Price is the amount of money that customers have to pay for buying the product.Pricing involves determination of price of a product.
Factors determining price
1. Cost of product
Cost of product is one of the most important factors affecting its price. In long run no organisation can survive if it charges a lower price than its product cost. Thus, it is charged on cost plus basis.
2. Product utility and demand
Price of a product depends to a great extent on its utility and demand. A buyer buys a product only when of the product at least equal to its price. Similarly, product demand also affect the price, if demand is high higher price is likely to be changed. In case of low demand, price tends to be lower.
3. Government regulations
Government has the power to to regulate price fixation mechanism for essential product. In certain cases, prices are directly fixed by the government, known as administered price mechanism.
4. Marketing methods used
Price fixation is also affected by marketing methods used, such as distribution system, quality of salesmen employed, degree of advertising, sales promotion efforts, additional benefits offered, etc.
3. Physical distribution
It involves activities that are necessary to transfer ownership of products to ultimate customers and making products available at the right time and right place.
Channels of distribution and its types
A channel of distribution consists of a set of people and organisations involved in the transfer of ownership of a product from its producer to its ultimate customer.
Types of distribution channels
(a) Direct channel of distribution
It is known as zero-level channel because no middleman is involved in the distribution process; the entire transaction is limited to manufacturer and customer (ultimate).
Methods used in direct distribution are as follows:
(I) Manufacturer's own retail outlets
(II) Selling through own sales force
(III) Mail order selling
(IV) Internet selling
(b) Indirect channels
An indirect channel involves intermediaries in between a manufacturer and a customer. Depending on the number of intermediaries involved, there are different types of indirect channels listed below:
(I) Manufacturers-Retailers-Customer
(II) Manufacturer-Wholesaler-Retailer-Customer
(III) Manufacturer-Agent-Wholesaler-Retailer-Customer
4. Promotion
Promotion consists of activities through which an organisation communicates to its potential customers about its product and persuade them to buy the product.
Though there are different methods of promotion, all of these aim at informing and motivating potential customers to buy. For promotion, advertising, personal selling, sales promotion, and public relations are used.