The marketing mix is a method marketers use to identify those company-controlled variables that influence clients to make purchases. Arranging these variables into a configuration that provides the company with the best competitive advantage is a challenge faced by many marketing professionals.
Marketing mix strategy entails a strategic, or a deliberative and well-studied approach, to marketing mix configurations. This involves using internal sales data to analyze the impact of previous marketing mixes to inform decisions about future formations of marketing mix variables.
What Are the Marketing Mix Components?
The goal of the marketing mix strategy is to successfully combine the right product, sold at the optimal price and at the optimal place with the best promotional efforts. Marketing mix is often used interchangeably with what marketers term “the 4 P’s,” which include:
- Product. When considering the product, take into account its functionality and design, the brand name, the packaging, repairs and support, and any possible accessories. The product is what offers the buyer the most value. It must satisfy the buyer’s need by fulfilling the expectations established by the other market mix variables.
- Price. Decisions about pricing can involve the pricing strategy, the method of payment, seasonal pricing, price flexibility and bundling. B2B companies tend to purchase products in much larger quantities than B2C company customers, which should factor into pricing decisions.
- Place. This is also called distribution, but it involves both location and timing. Distribution channels should be evaluated using ideal client profiles to identify those channels your target audience prefers. Launch times should be determined as well as inventory management decisions, order processing, transportation and warehousing.
- Promotion. This is the communication surrounding the product intended to garner a positive buyer reaction. Marketing channels should be determined, again based off your target audience profile. Promotions and public relations should be part of this equation, all in the context of the marketing budget.
The four P’s are among the most well-known breakdown of the marketing mix concept, but some argue that this conception of marketing is dated and have sought to provide a modernized variation of the four P’s, usually by broadening the four P’s to the seven P’s (includes the original four as well as physical evidence, people and process), or the four C’s:
- Consumer. This replaces Product in the marketing mix and refers to a tight focus on satisfying consumer wants and needs with a particular product rather than a strict focus on the product and then fitting it to a client need.
- Cost. Cost replaces Price in marketing mix models, but also takes into account all the costs to the client to satisfy a need, which should reflect the total cost of ownership, including costs in time and implementation.
- Communication. Promotion is replaced by communication in order to emphasize the need to open up a dialogue with potential buyers rather than simply promoting a product.
- Convenience. The Place variable is quickly becoming less of a factor as the Internet modernizes our purchasing habits. Buyers these days are significantly further along in the purchase decision process before they contact a salesperson. Convenience refers to the ease with which a product can be located, researched and bought.
How to Create a Marketing Mix
In determining your company’s optimal marketing mix, you should draw from sales data and marketing analysis research. Finding the right balance for your marketing mix variables requires that you:
- Profile your target audience. Defining the kind of client you want to reach with your promotional efforts (or marketing communications) allows you to concentrate your activities on targets with the most potential to convert to a sale. Perhaps the most important aspect of profiling your ideal client is to be specific. Nail down demographic information and key characteristics, such as the type of business you want to reach out to, their geographic location, and which company officer usually makes purchasing decisions.
- Determine goals and budget. With the target in sight, begin outlining the steps that will enable you to reach those clients. What results are needed to declare your marketing a success? What measurements can you use to indicate success? Once you have set down realistic and quantifiable goals, you can then start to discuss your budget and how to allocate it.
- Choose tactics. At this point you begin deciding which tactics to employ in order to achieve your goals. Identify the ways your target clients search for products and solutions and use that to narrow your set of tactics to those that effectively reach your audience without exceeding your budget.
Marketing Mix Modeling
Marketing mix modeling is the term for the statistical analysis to estimate the impact of a company’s marketing mix. This usually involves regressions on marketing and sales data to identify the value of different marketing mix models. A marketing mix analysis treats product, price, place and promotion as a series of ingredients that must be adjusted to improve the overall recipe. This analysis can be performed either in-house or by an outsourced firm that specializes in marketing mix modeling.
A marketing mix analysis creates opportunities to:
- Measure the ROI of marketing mediums
- Estimate the sales volume contributed by each marketing mix component
- Identify future sales opportunities
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