The Marketing Mix
In order to market a product or service efficiently, marketers pursue very concrete strategies. All decisions and actions that contribute to marketing are summarized in the so-called marketing mix. The instruments and measures defined therein help the company to create a structured marketing concept (e.g. in so-called 4P marketing).
What is the marketing mix?
The term marketing mix encompasses all actions and decisions that are important for the successful placement of a company and its products and/or services on the market. In the classic model of the marketing mix (the so-called 4P marketing), a distinction is made between four central areas. These four marketing mix instruments are: Product policy, pricing policy, distribution policy and communication policy. The successful implementation of these 4 Ps is an essential prerequisite for running a successful company.
Classic 4P marketing: The four pillars of marketing
Product (product policy)
Price (pricing policy)
Place (distribution policy)
Doctorate (communication policy)
Together result in a uniform marketing concept, which has proven itself especially for the marketing of products. However, the 4P marketing model has some weaknesses with regard to the marketing of services – yet it is a basic scheme that every marketer should be familiar with. What you as an entrepreneur should pay attention to in the 4 Ps is explained below.
Product: What distinguishes my product?
Product policy is the heart of the marketing mix and influences all further marketing processes. It covers all areas around the design of the product, e.g. the material, the design, the brand name and also the services offered around the product.
A good product policy requires detailed planning. First of all, you should carefully consider which target group you want to address and what their special requirements are for the product. It is important to answer the following questions: How old is the target group and what are its characteristics and needs (e.g. purchasing power, preferences, lifestyle)? Is it a women’s or men’s product or are both sexes addressed? Is it possible to offer product variants (e.g. different versions in different price ranges or gender-specific versions)?
Design and packaging
Both the design and the packaging play a central role. They contribute significantly to the product image and distinguish it from competing products.
The product design includes functional as well as aesthetic aspects. In a coffee machine, for example, all buttons and containers should be self-explanatory and easy to operate. Regardless of this, the appearance of the machine can be classic or extravagant. In addition to the design, the name of the product or brand should also be carefully considered.
Another important part of the product policy is the service you offer your customers before and after purchasing a product. Services can include good and always available customer service, a long warranty period, or free delivery of products. Also a favorable assembly and/or installation of furnishings, supply engineering and the like belong to this range.
Price: How much should my product cost?
Price policy is also an essential part of the marketing mix. The pricing strategy is about setting product prices. The pricing policy also deals with price adjustments and short-term discount campaigns.
Ideally, you should coordinate the basic price of a product in such a way that you achieve the highest possible profit with the sale and still remain competitive. In order to determine the ideal price, you must calculate the manufacturing and distribution costs correctly and also consider the purchasing power and habits of your target group.
Pricing based on target group and competition
When determining the final price, you must also take into account the previous target group analyses and the market situation: How much do your potential customers spend on similar products? And what is the average purchasing power of your target group?
In terms of pricing policy, you should also keep an eye on your competitors. Find out how expensive comparable competing products are. If your potential customers find a similar product at lower prices, they will often choose the cheaper one. Prices far above the market average can usually only be justified with a special added value of the product compared to competing products.
Place (distribution policy): How does the product reach my customers?
Distribution policy is the marketing mix instrument that determines how your product reaches your customers. It includes all activities around the distribution channel of the product. The following questions are particularly important: Does my product reach the customer via intermediaries or via direct sales? Or should the company offer both variants? The selection of sales service providers also falls into this area.
When choosing the sales type, you can choose between direct sales, indirect sales, or a mixture of both (franchising). In direct sales, you sell your product to your end customers yourself and are in direct contact with them. However, you first have to set up your own sales organization, which entails costs. And especially in the case of mass products that are in demand nationwide, only a few companies have the resources and infrastructure to guarantee their distribution on a permanent basis. On the other hand, the profit margin per product is usually higher with direct sales, since you work without intermediaries.
Promotion (communication policy): Making customers aware of the product
In order for as many people as possible to know about your product, you should invest in the promotion. The communication policy describes all measures to boost the sale of a product and to build up a positive brand or company image. This is typically achieved through advertising, PR and marketing campaigns that draw attention to your products and encourage your target group to buy them. Since you will hardly achieve sales without promoting your products, communication policy is one of the indispensable marketing mix instruments.
For many of the platforms and channels mentioned above, the environment in which you draw attention to your product is particularly important. If you advertise a TV commercial, it should be shown during the commercial break of a programme that is mainly watched by your target group. If you are represented at a trade fair, it should also have a strong connection to your company or product.
Communication policy also includes sales promotion. This refers to temporary campaigns with which you promote your product specifically (e.g. through short-term discounts, sweepstakes, trial stands, etc.).