An Organization and Its Environment

Read this chapter to learn the basics of the marketing mix. Examples are provided for each "P" of the marketing mix – product, price, promotion, and place. A marketer must define each P while determining the best combination of all 4 Ps to effectively reach a target market and ultimately create value for the customer and the company. Apply the 4 Ps to the Apple iPhone.

  1. Product – How does the product address the needs and wants of a customer? What is unique about the product?
  2. Price – How would you characterize the price? Are discounts available?
  3. Place – Where can the customer buy the product? Would most customers be able to readily buy the iPhone when needed?
  4. Promotion – How does the company communicate with customers about the product and its features and benefits? Does the customer communicate with the company and others about the product?

Components of the Marketing Mix

Product

Purple hexagon with the following text in the center: Product: What solution does the customer want and need? Outside the hex

In the marketing mix, the term "product" means the solution that the customer wants and needs. In this context, we focus on the solution. Products include either physical things (goods) and/or intangible things (services).  Some products include both goods and services.  In combination, or individually, goods and services are a solution and referred to as the product in the marketing mix. Examples of the product include:

  • The Tesla Model S, a premium electric car
  • A stay at a Holiday Inn Express, a low-price national hotel chain
  • Nacho Cheese Doritos, a snack food
  • Tangerine, an online banking service
Each of these products has a unique set of features, design, name, and brand that are focused on a target customer. The characteristics of the products are different from competitors' products.

Screenshot of Tangerine.com. On the main page the question "what can we help you with today" is above the four options: savin


Screenshot of Tangerine.com

Promotion

Green hexagon with the following text in the center, "Promotion: What is the dialogue between customer and company?" Outside

In the marketing mix, the term "promotion" refers to the communications that occur between the company and the customer. Promotion includes both the messages sent by the company and messages that customers send to the public about their experience. Examples of promotion include:

  • An advertisement in Cooking Light magazine
  • A customer's review of the product on Twitter
  • A newspaper article in the local paper quoting a company employee as an expert
  • A text message sent to a list of customers or prospects

Marketing professionals have an increasingly difficult job influencing promotions that cannot be controlled by the company. The company's formal messages and advertising are only one part of promotions.

facebook logo plus their slogan: "Like us on facebook".
Marketers often run social media campaigns, rewarding customers who "Like" the company on Facebook.

Place

Orange hexagon with the following text "Place: how does the customer act or buy?" Outside the hexagon and to the right, is a

In the marketing mix, the term "place" refers to the distribution of the product. Where does the customer buy the product? "Place" might be a traditional brick-and-mortar store, or it could be online. Examples include:

  • Distribution through an online retailer such as Amazon.com
  • Use of a direct sales force that sells directly to buyers
  • Sales through the company's website, such as the shoe purchases at Nike.com
  • Sales by a distributor or partner, such as the purchase of a Samsung phone from Best Buy or from a Verizon store

In today's world, the concept of "place" in the marketing mix rarely refers to a specific physical address. It takes into account the broad range of distribution channels that make it easy for the target customer to buy.


Starbucks Online Ordering

How did a company like Starbucks that sells hot drinks from a storefront use mobile technology to improve distribution? Watch the video, below, to find out:



Price


Turquoise hexagon with the following text in the middle "Price: what is the cost to the consumer?" Outside the hexagon and to
In the marketing mix, the term "price" refers to the cost to the customer. This requires the company to analyze the product's value for the target customer. Examples of price include:

  • The price of a used college textbook in the campus bookstore
  • Promotional pricing such as free McNuggets offer for downloading the McDonald's app
  • Discounts to trade customers, such as furniture discounts for interior designers
Marketing professionals must analyze what buyers are willing to pay, what competitors are charging, and what the price means to the target customer when calculating the product's value. Determining price is almost always a complicated analysis that brings together many variables.
McDonald's "Download the App" sreenshot for free Chicken McNuggets


Free Chicken McNuggets with McDonald's App Download

Source: Marketing Faculty at the Walton College of Business, University of Arkansas, https://uark.pressbooks.pub/intromarketinguark/chapter/reading-components-of-the-marketing-mix/
Creative Commons License This work is licensed under a Creative Commons Attribution 4.0 License.

Last modified: Monday, October 10, 2022, 2:21 PM