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.

RELATED TERMS
  1. Four Ps

    The categories that can be controlled in the marketing of a good ...
  2. Marketing

    The activities of a company associated with buying and selling ...
  3. Promotion

    1.In terms of a career, a promotion refers to the advancement ...
  4. Product Life Cycle Management

    The observation of an item as it moves through the typical stages ...
  5. Product Differentiation

    A marketing process that showcases the differences between products. ...
  6. Product Life Cycle

    The period of time over which an item is developed, brought to ...
Related Articles
  1. Small Business

    What are the Four Ps?

    The four Ps of the marketing mix are product, price, place and promotion.
  2. Small Business

    Understanding Marketing

    Marketing includes all of the activities of a company associated with buying and selling a product or service.
  3. Financial Advisor

    How to Create a New Financial Product in 10 Steps

    The 10 steps outlined here are essential to the creation of a new financial product.
  4. Investing

    Understanding Marginal Cost of Production

    Marginal cost of production is an economics term that refers to the change in production costs resulting from producing one more unit.
  5. Small Business

    Understanding the Product Life Cycle

    Product life cycle is the period of time during which a product is conceived and developed, brought to market and eventually removed from the market.
  6. Investing

    Lead The Charge With Product Development

    If you like to keep your finger on the pulse of the market, this could be the career for you.
  7. Investing

    How To Use Price-To-Sales Ratios To Value Stocks

    Take a look at how this effective ratio can be influenced by certain critical factors.
  8. Investing

    These Financial Products Are Too Complex For The Average Joe

    Structured financial products are so elaborate that investors are unable to assess costs and risk.
  9. Small Business

    Understanding Product Differentiation

    Product differentiation is a marketing tool companies use to distinguish their products or services from the competition’s.
  10. Investing

    How To Use Price-To-Sales Ratios To Value Stocks

    The price-to-sales ratio reveals how much Wall Street values every dollar of a company’s sales.
RELATED FAQS
  1. What are the similarities between product differentiation and product positioning?

    Learn how two marketing strategies, product differentiation and product positioning, are similar and work together to effectively ... Read Answer >>
  2. Do production costs include the marginal cost of production?

    Learn more about marginal costs of production and production costs. Find out how businesses can use marginal cost calculations ... Read Answer >>
  3. What are some ways a company can expand its product line?

    Understand what a product line is and why it's important. Learn about specific ways in which a company can expand its product ... Read Answer >>
  4. What are the key differences between marketing and advertising?

    Understanding the role advertising plays in the marketing mix will help business owners define their promotional strategies ... Read Answer >>
  5. Is there any way to reverse the law of diminishing marginal returns?

    Learn more about how consumer spending, supply and demand impact production decisions. Find out more about the law of diminishing ... Read Answer >>
  6. What is the difference between research and development and product development?

    Understand the difference between research and development and product development. Learn why a company would want to invest ... Read Answer >>
Hot Definitions
  1. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  2. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  3. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  4. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  5. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  6. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
Trading Center