What is a 'Marketing Mix'
A marketing mix usually refers to E. Jerome McCarthy's four P classification for developing an effective marketing strategy: product, price, placement, or distribution, and promotion. When it is a consumer-centric marketing mix, it is extended to include three more Ps: people, process and physical evidence, and three Cs: cost, consumer and competitor. Depending on the industry and the target of the marketing plan, marketing managers may take various approaches to each of the four Ps.
BREAKING DOWN 'Marketing Mix'The term "marketing mix," was first coined by Neil Borden, the president of the American Marketing Association in 1953. It is still used in 2016 to make important decisions that lead to the execution of a marketing plan. A marketing mix helps an organization make strategic decisions when launching a new or existing product. The various approaches have evolved over time, especially with the increased use of technology.
Expanding the Four Ps of the Marketing Mix
Although the four Ps can be examined independently, in practice they are often dependent on each other.
Product refers to the item to be sold. What product is going to be sold? What features differentiate the product from competitor products? Are there associated products that can be marketed with the initial product?
Price refers to the sale price of the product. Consider factors such as the cost price of the product, marketing expenses and distribution costs. Determine if these costs are likely to be fixed or variable when calculating an appropriate price. Price can also be used to position the product in respect to perceived quality.
Place or distribution refers to where the product is going to be sold. Consideration needs to be given to the type of product being sold when determining where it is to be distributed, as it impacts the positioning of the product. Basic consumer products are often made readily available. Premium consumer products are typically only made available in select stores. Is the product better suited to be sold at a brick-and-mortar store or online?
Promotion refers to the collective marketing communications campaign used to sell the product, often called the promotional mix. Promotional activity includes advertising, sales promotion, personal selling and public relations. Promotions are typically reliant on product and price and place. Key consideration needs to be given to the budget assigned to the marketing mix, the stage of the product's life cycle and how the promotion can be utilized to position the product.