In the business world, there are many tools that are utilized to accomplish specific tasks, and this holds true when it comes to marketing a product or service. Sometimes these tools can be complex and involved, and other times they cut right to the heart of matters, and one of the most famous of these marketing tools, called the marketing mix, can be considered one of the more direct business tools. The marketing mix is a combination of seven factors, or kinds of choices, that a company deals with in order to properly and efficiently market their products and services. What began as four Ps has evolved into seven, but more on that later.
We’ll be talking today about the extended marketing mix, how it evolved, and what each of the Ps is all about. The process of successfully marketing a product or service to consumers is tricky, with a lot of luck being necessary. But this being the business world, it would be foolish to leave anything up to luck or chance, so there’s also a healthy dose of thorough, well-planned strategy that has a good track record. For some time-tested ideas on how to market online, this article on online marketing tools, and this course on mastering email marketing will help generate consistent results.
How the Marketing Mix Evolved
The term “marketing mix” was coined in the 1940s, but didn’t truly take hold until 1960, when marketer E. Jerome McCarthy put forth four strategies, all beginning with the letter P, that describe the four avenues, or strategies, that a company must take in order to successfully market a product. These four Ps are product, price, promotion, and place (distribution).
Because the original, four-pronged approach to marketing only catered to just the marketing of a product, a need developed for the marketing mix to include how a service would be marketed. The need for a change came about because services are different from products in that they are intangible, perishable, inseparable, and heterogeneous, and as a result, different strategies need to be considered. These three new Ps, invented by Booms and Bitner in the early 80s, were people, physical evidence, and process, thus completing the extended marketing mix. To learn more about the ins and outs of business, check out this course on business 101, which will pull the curtain back just a bit, so you can peek inside.
The 7 Ps of the Marketing Mix
Now that we’ve covered a little bit of the history and evolution of the extended marketing mix, let’s discuss the actual components, all of which, you know by now, begin with the letter P.
- Product: The first P deals with the actual thing being sold to the consumer, whether it’s a physical product, or an intangible service. In the case of products, this strategy also encompasses any services or perks that might accompany it. The company must take into account what the customer is expecting and needing from the product, then look to meeting those needs and expectations. Also included in this P are such important concepts as the product’s look, name, packaging, and so on.
- Price: The second P covers any pricing issues related to the product. First and foremost, profit margin, as well as the pricing of the competition, dictate what the price of the product will be. Also under consideration are any associated pricing issues, such as leasing, financing, and related discounts. The pricing strategy will dictate what type of store the product will be sold in, as well as determine how price sensitive the customer may be.
- Promotion: Here, the cost can skyrocket in comparison to the actual production costs, so great care must be taken when deciding how to communicate and sell the product to customers. In this step, a break even analysis should be performed to make promotional decisions. Decisions regarding promotion include what medium to use (TV, print, etc.), as well as when and where to promote. The break even point falls within the realm of accounting – to learn more about this math-based industry, check out this introductory course on financial accounting to learn some of the basic concepts.
- Place: The final P of the original marketing mix, place deals with questions of channels of distribution, and getting the product to the consumer. Transactional, functional, and logistical issues are scrutinized here, and decisions made at this point include what stores to find the product in, and whether or not a sales force necessary, among other things.
- People: The first P of the extended marketing mix is concerned with the people that are working for the company. It’s important to recruit and train the right people, because this is who the customers will be dealing with. These include customer service representatives, sales people, and anyone else a consumer may deal with that represents a company.
- Physical Evidence/Layout: How a product is presented to the customer, including its surroundings, is very important. Especially crucial to brick and mortar stores that sell a product, they must be welcoming, easy to navigate, and if the product being sold is on the pricy side, fancier than other places.
- Process: The final P, process deals with customer service, and a company’s ability to offer a service, handle complaints, and foresee any issues before they actually happen. These clearly defined and efficient processes should garner customer confidence in the company’s ability to handle any issues.
The seven Ps of the extended marketing mix deal with pretty much any issue that could pop up when offering a good or service to consumers. Next time you go to Target or Bed, Bath and Beyond, stop to think for a second about all of the time, effort, and money that went into each of those thousands of products, from invention to sitting on the shelf with a price tag. If you’d like to learn more about other aspects of this complex process, this course on how to develop a marketing strategy will show you how it’s done in the real world.