The Marketing Mix

Marketing mix is the set of choices you make to develop a marketing plan. When planning marketing activities, you will have to determine which product features to offer, how to set the product’s price, how to deliver the product to the customer, and what kind of product promotion to do. The choices you make in these four areas define your marketing mix.

Traditionally, marketing mix is described as involving choices from four categories. These categories are not absolute; the original descriptions of marketing mix had twelve categories, which over the years have been combined and simplified down to these four:

Product. The product is what the customer gets in exchange for paying the price. The product is obviously the thing or service you are selling, but it also includes everything else the customer expects to get after a purchase, including customer service, returns, product care instructions, and possibly many other things.
Price. The price of a product is what the customer gives up to get the product. Most often we think of price in terms of money, but in addition to the dollar price, the customer will consider things like the time to travel to a store, how hard it is to care for the product, and how much mental effort it takes to select the product.
Placement. Placement refers to a product’s distribution channel"where the customer pays for the product and where the customer receives the product. For retail stores, placement us typically the store location, but may also involve a website or the mail.
Promotion. Promotion is the set of all of the ways that customers learn about the product, price, and placement. Advertising, sales promotions, brand, and sales strategy are all included in the category of promotion.

By thinking about your marketing plan in terms of these “4 Ps,” you can be sure that you are developing a solid plan without having to invent or learn about a lot of new marketing ideas. Knowing the 4 Ps will give you a mental structure to understand what you should be doing to attract customers or what you should change if something is not working, so it is worth spending some time on these ideas.

Once you understand the 4 Ps, you will use them as a guide for many other marketing processes, such as defining your market position, crafting a unique selling proposition, or analyzing your competitive advantage.

Product

Clearly, the product is the thing you are selling in your store"the thing that the customers leave with after giving you money. But it also includes many other intangible services, benefits, and satisfied desires.

Imagine you’ve had a rough day and want to relax by shopping. You have not splurged in a while and want to buy something nice and enjoy buying it. If you have two choices of where to shop, and one store has more attentive, friendly, and helpful service, but at a higher price, where are you likely to shop?

If you think the better service and more pleasant environment will be enjoyable, you may be willing to pay a higher price to get that service. By going to the higher-priced store, you will have an attentive salesperson who will make you feel important and a pleasant, relaxing environment. After you’ve purchased the product, you are likely to feel more upbeat and recharged than if you had bought a similar product from a discount store.

Recall that we defined a product as: “what the customer gets in exchange for the price.” Since, in the example, you exchanged a higher price for better service and a pleasant environment, the service and environment is part of the expanded concept of product. To dig a bit deeper, you didn’t really want the service and environment, you wanted to feel good, and you paid more for the product to feel better after the purchase. That good feeling is part of the product.

Similarly, the product could include other non-tangible aspects such as easy return policies, a comfortable buying atmosphere, or pride of ownership. Anything the customer receives after paying the price is part of the product.

Price

Price seems like a very simple thing: the dollar cost of the product. But just as we expanded the idea of product, we will also expand the idea of price. We will define price to be “what you have to give up to get something.” This definition lets us include other things in price that are not money, the most important of which is time.

When a customer buys a product, she has to dedicate some time to the purchase. Time is scarce"she always has other things to do"so your customer would usually prefer not to spend a lot of time making a purchase. If there are two stores that are otherwise identical, customers will usually prefer to shop at the store where the purchases take less time, all other things being equal. Because the customer has to give up time in addition to money, that time is part of the price.

Expanding the idea of price to include things besides money gives you a more complete understanding of what the consumer is really giving up to get your products.

Placement

The Placement category describes where the product is delivered to the customer and where the customer pays for the product. These two places are often the same place, as in a retail store, but it is also common to pay in one place, like online, and then receive the product in another place, like the mail.

In some businesses, Placement refers to the entire distribution channel, including warehouses, transportation, and distributors. (And many discussions of the marketing mix use the word “Distribution” instead of “Placement,” but that ruins the “4 P” name.) For this guide, we will consider only the places that you sell products to customers or receive payment:

A store.
An e-commerce website.
Other non-store locations like private homes, fairs, or festivals.
Other stores, if you cross-promote with nearby retailers.

Promotion

Promotion is the category for all of the ways that customers become aware of your product, price, or placement. Some of the most common methods of promotion include:

Advertising
Personal contact or sales
Sales promotions
Public Relations
Direct marketing
Sponsorships

Our notion of what “promotion” means is, like price and product, broader than what the word means in common usage. Promotion is happening anytime a consumer learns about the product, price, or placement. So advertising is obviously promotion, but so is one friend telling another friend about the product. Promotion is also happening when a salesperson explains a product’s features and benefits to a customer in a store.

Because our definition of promotion is “how people become aware,” a company doesn’t control all of the promotion for its products. For instance, companies do not control word-of-mouth marketing. Marketers like to think they can entirely control a product’s brand and image, but in reality, companies can only manage their brands. And, with modern technology and social media, many companies are using techniques like viral marketing and social marketing to explicitly give up control of some of their promotion to the customers. The company still manages the promotion, but they don’t completely control it.

Promotion is also known as Marketing Communications, or MarCom, and a mixture of the different types of promotion in a business is known as the Promotional Mix.