The term 'marketing mix' was first used in 1953
when Neil Borden, in his
American Marketing Association presidential address,
took the recipe idea one step further and coined the
term "marketing-mix". A prominent marketer,
E. Jerome McCarthy, proposed a 4 P’s classification in
1960, which has seen wide use.
Marketing Mix is a combination of marketing
tools that a company uses to satisfy their target
customers, and achieving organizational goals.
McCarthy classified all these marketing tools
under four broad categories:
These four elements are the basic components
of a marketing plan and are collectively called
4 P’s of marketing.
All marketing decision-making can be classified into
four strategy elements, sometimes referred to as the
marketing mix or the four P’s.
Product: What are the benefits of this product and
service to its customers?
Price: Should a price be charged to cover costs only?
Should the price allow for a profit?
Place: What can be done to make this product and
service more accessible and available?
Promotion: What can be done to increase the
visibility of this product and service? What can be done
to increase its usage or exposure?
Value perceivedValue perceived
in the mind ofin the mind of
the consumerthe consumer
Cover location,Cover location,
distribution, channelsdistribution, channels
and logisticsand logistics
Collection of featuresCollection of features
and benefits thatand benefits that
provide customerprovide customer
Product is the actually offering by the company to its
targeted customers which also includes value added stuff.
Product may be tangible (goods) or intangible (services).
For many a product is simply the tangible, physical entity that
they may be buying or selling.
While formulating the marketing strategy, product decisions
What to offer?
After sale services
Price includes the pricing strategy of the company for its
products. How much customer should pay for a product? Pricing
strategy is not only related to the profit margins but also helps in
finding target customers. Pricing decision also influence the
choice of marketing channels.
Price decisions include:
Pricing Strategy (Penetration, Skim, etc)
Using price as a weapon for rivals is as old as mankind, but it’s
risky too. Consumers are often sensitive for price, discounts and
additional offers. Another aspect of pricing is that expensive
products are considered of good quality.
It not only includes the place where the product is placed, all
those activities performed by the company to ensure the
availability of the product tot he targeted customers. Availability
of the product at the right place, at the right time and in the right
quantity is crucial in placement decisions.
Placement decisions include:
selection of channel members
There are many types of intermediaries such as wholesalers,
agents, retailers, the Internet, overseas distributors, direct
marketing (from manufacturer to user without an intermediary),
and many others.
Promotion includes all communication and selling activities to
pursuade future prospects to buy the product. Promotion decisions
The elements of the promotions mix are integrated to form a coherent
campaign. As with all forms of communication.
As these costs are huge as compared to product price, So it’s good to
perform a break-even analysis before allocating the budget. It helps
in determining whether the new customers are worth of promotion
cost or not.
Marketing mix (4 P’s) was more useful in early 19’s
when production concept was in and physical products
were in larger proportion. Today, with latest
marketing concepts, marketing environment has
become more integrated.
So, in order to extend the usefulness of marketing
mix, some authors introduced a fifth P’s and then
seven P’s (People, Packaging, Process).
But the foundation of Marketing Mix still stands on
the basic 4P’s.